If we are all in this together, what cuts have the rich suffered?

[Grennie]

I know mumsnetters seem to be better off than average. So just want to point out that in 2012 the mean national average wage is £29,900. The median was £20,000. And only 10% of people earned £50,500 or above.

So what cuts have this 10% of people suffered?

and I mean the lower part of the bracket not upper 100 thousand! :)

I think that we need to be really careful about how papers and politicians like to "pit" sections of the population against each other.

Higher rate taxpayers contribute significant sums to our tax bill and, as a lot of previous posters have pointed out, don't tend to benefit from any government support in return, as they don't need to.

There's a section of hmrc website (I think that's what it is) where you can work out are you a net contributor or a net benefitor in the UK. From memory the £50k plus people are all net contributors to society.

There's been a lot of chat on mn recently about it not being a race to the bottom - I think this rich versus poor debate that's often peddled at the moment is exactly that. Instead of saying oi they get too much we need to focus on ways of improving the future of those who currently get too little in life.

I also completely disagree with inherence tax, double taxation at its best and punishing those who save. Same with payments in residential care, punishes savers, rewards spenders.

creative accounting

what do posters think this really means?

Inheritance tax does not punish those who save. Those who saved are dead. It taxes a windfall from other people's savings. The people who benefit have never paid tax on that money. It's no more unfair on the idea that your plumber pays tax on his/her income even though other people have already paid tax on the money they used to pay him/her.

Income tax is far more dubious because it is a tax on what people earn (rather than what they are lucky enough to have land in their lap).

Also, double taxation is pretty normal. Much of what we spend our (taxed) income on is taxed again through things like VAT, 'road tax', etc.

Yes Bodicea, if you are on PAYE you are pretty much a cash cow. But at least half of the higher earners I know are self employed, albeit slightly dodgily under IR35. And it's not just tax, I know many high earners with kids getting a full grant and bursaries at university.
It does make you question whether you are being a mug, playing it straight.

creative accounting
Maybe I'm using the wrong term. I mean doing stuff that's legal but not strictly honest. For instance, reducing the amount of money you take out of your business as income in the year before your kid starts at Uni so that you have a lower income and they can claim extra grants and bursaries.

But at least half of the higher earners I know are self employed

but how much do you think this actually saves?

I'm self employed myself You. Or rather technically I am a director of the company that employs me. The more money I take from my company as dividends rather than salary, the less tax I pay.

Arbitary. People should have the right to leave their tax paid money to who ever they want to.

The other thing about IHT, it takes money out of the economy and in to the hands of the government who then waste the money on stupid projects
the money does not benefit the poor.

The whole idea of IHT is a load of political nonsense. It does not even get people with estates of £10 million plus because those people have been able to make proper tax provisions.

The people who are going to be affected are the sons/daughters of people who have benefited probably though the house price explosion.

I know it will never ever be got rid off but it has to be one of the most appalling taxes and self defeating ideas.

Just like the stupid Mansion tax rubbish. This will not benefit the poor

Both these policies do not affect me,but i do believe that both taxes are just based on envy and just fooling poor people in to believing
it will.

The more money I take from my company as dividends rather than salary, the less tax I pay.

after paying corporation tax.

Well me and dh definitely fit into the mugs category moomin oh well such is life.

I have a friend who lost his middle-management job with a household-name company over a year ago. His role was outsourced to India and his entire department made redundant.

He had been with the company for 6 years and had a postgraduate qualification. It had been his first and only job, so when it came round to finding another one in a recession he really struggled, as people saw him as a product of his company's cookie-cutter training process.

After three months of living off his savings and redundancy money, my friend realised he was going to have to claim benefits. He started getting his rent paid by housing benefit, his council tax was cut, and he got JSA.

In terms of disposable income, he's only £20pw less well off than he was before, and he has 70 free hours which he didn't have when he was working. In real terms, he's actually better off because he doesn't have the travel, lunch and drycleaning costs that he had when he was working.

Unsurprisingly, he is really loving being unemployed, and is now becoming increasingly choosy about the kinds of jobs he could consider as they have to deliver a significantly better lifestyle than the one he can enjoy without working.

arbitrary sorry, I disagree. If I have saved all my life, having paid tax at source on that income so that I can have money to give to my children, I feel it's incredibly wrong for a large chunk of my savings to go to the government. And it is double taxation, if I'd given it in dribs and drabs over the 20 years preceding my death then no tax, the kids would still have had the income. So the argument that everyone pays taxation on it somewhere just doesn't work for me. Lifetime gift, no tax, death, tax... Arbitrary and, imo, wrong.

It's totally different to me giving it to the plumber and him being taxed!

Clearly we view it differently.

DH read an article the other day regarding the difference between the higher and lower earners.

It was quite surprising that 'higher earners' up to £80k i think weren't actually that much better off as they generally get taxed to death and get NO help at all whilst lower earners get so many subsidies in the form of various benefits that although there seems to be a big difference in salary net overall income wasn't as different as you'd think.

Inheritance tax is actually brilliantly progressive, because it acts in the passing down of wealth (and the privilege that goes with it). The dead do not pay inheritance tax. They are able to leave their money to whoever they choose. However, those who get a windfall (by virtue of having parents with something to leave them, something which many people are not lucky enough to have) have to pay tax on their windfall.

When people earning crappy wages with absolutely no wealth pay income tax, I can't quite see how it's unfair that the beneficiaries of estates worth quite a lot of money have to pay some of it in tax.

All forms of taxation take money out of the economy. Inheritance tax isn't special in that regard.

Corporation tax is on your profits though. And, surprise, surprise the Tories have actally lowered it rather than increased it.

My friend's experience illustrates your newspaper article, racmun. Obviously I don't know how much his job paid but as I work in recruitment, and I know from the horse's mouth about his being almost better off on benefits, £45k would be my guess.

£45k goes nowhere in London if you rent.

Housing benefit in London is often more generous (£220pppw in our borough) than people in junior and middle-level roles are paying out to live in flatshares in more squalid and less central places in the city.

Isn't it harder to find a nice flat if you are on housing benefit though?

Not suffered any "cuts" as such because they're not claiming any benefits at all.

No pay rises, shit hours & shit pensions just like the rest of the country though.

Moomin My friend has continued renting the same flat and HB is paid directly to the tenant, not the landlord; as long as the rent is paid the landlord is no wiser.

Landlords do refuse HB claimants in London though, as a matter of routine, so he'd better hope his landlord doesn't ask him to move on.

The other tax that really is unfair is blommin stamp duty. Our house was just over the threshold that went from 1-3% this is not some mansion. It is a nice family home in a reasonable nice area in a northern town. We had to raise £8000 in stamp duty. It made me feel sick. We can't justify moving again in a seriously long time because of the amount of money we would lose having paid the stamp duty. It stops people being able to move around and causes stagnation in he house market. I wouldn't begrudge the 3% over the £250 mark but it should be Just 3% on the excess over that not the whole lots. It is wholly unfair and makes no sense. especially as I know the guy next door got a similar house (actually bigger garden) under the bracket once the housing market dropped a bit.

Personally nothing left to lose. We lost chb. Some 188 per month with 3dc so hardly a drop in the ocean. Dh pays shedloads of tax. He has private healthcare but it heavily taxed on that benefit. Pays a fortune for fuel as he has a long commute for his job so yet more tax into the pot. I don't fully utilise my personal tax allowance. We are net contributors on every calculator I have seen. I think you are confusing the squeezed middle with rich.

Now stamp duty is a really bloody stupid tax, because it screws up the housing market. I cannot understand why the higher rates don't simply apply on the amounts above the thresholds. It's just silly for a house at £250,001 to cost so much more than one at £250,000 because the tax rate jumps so much.

Actually Moomin, it's housing where I think the £150k+ brigade have "suffered", to Grennie's point.

Most of these people live in London and London property prices have been largely immune to the recession, so rents and capital costs of purchase have continued to rise. They're currently at their highest price ever, though salaries haven't risen.

And yes, plenty of people on £150k or more still rent in London, because they don't have the deposit.

Who is poor bashing? Personally I have every sympathy with the poor. I have family members surviving on 71 jsa and it is crap.
Yet everyone seems to think it ok to bash those fotunate enough to have a good job.