AIBU to ask a question about Tax paying and what is fair?

[Taxquestions]

Regular but name changed for this thread - Pom Bears, Water Gun, Penguin Date etc.

Although this is not a thread about a thread, I read a thread today which really raised my eyebrows about some people's beliefs on what tax payers should really be paying in tax. I am interested in all views.

One of the contributors seemed to believe that tax payers should be taxed so highly that their eventual income stream would be nearer an average salary i.e if you earn't 100K you should be paying 75% back in tax.

I read things like "well they don't actually pay the higher rate".....errm looking at my P60 I can assure you they (I) do "well they have accountants to lower the rate for them" how exactly would this be? HMRC are scrupulous, there are FSA rules and regulations and there isn't any way to "fudge" the system - if you are not in this system please tell me where on earth you get the opinion that everything is fraudulent.

I wonder what the general opinion is to someone like me...I earn over 100K a year, work bloody hard for it, have very little tax free allowance (in fact I think it is more like 0), don't take up a NHS space as have private medical insurance, don't take up a school space as my children are in private for non snobby reasons despite the opinion that some hold. I employ over 100 people, am a fair manager/employer who pays above the national/international average and I contribute a substantial sum of my very hard earned income every year in both Tax and NI contributions. I don't have a final salary pension scheme and will be in the same position as everyone else who has either worked without a final salary pension or those who have never worked come retirement (subject to any savings).

So mumsnet do you think I should be penalised more for loving my job, being good at it and wanting to work hence being afforded the salary I am "lucky" to earn? Should I go out to work just to put more into the tax pot?

So as not to drip feed whilst I put "lucky" - it has been far from it, I am working class through and through left school early with no qualifications and worked my way up the ladder. This makes no difference to me but just to clarify for those that might also assume I was born with a silver spoon in my mouth :)

To me there should be a set percentage for everyone so everyone is paying the same proportion.

Is there anything wrong in doing that, I don't know about these things?

I don't see why people think richer people should be taxed more. Some wealthy people will have worked their backsides off to get to where they are. I think a set percentage across the board is fair if I'm not missing anything? (Not saying that in a cocky way, I'm genuinely not sure if I'm missing something!)

X post! I think people who earn very very high salaries should be taxed more, yes. Outrageous that the gov removed the 50% rate

Noticeably no one has offered an opinion whether higher earners should pay more - people are far more interested in doing what women do and being bitchy, competitive and argumentative

For someone who works in SOX compliance, you do need to brush up on basic reading comprehension.

And people have offered opinions. No need to be rude OP.

What is it you do OP?

*To me there should be a set percentage for everyone so everyone is paying the same proportion.

Is there anything wrong in doing that, I don't know about these things?*

Yes, because if someone who earned £10k paid 25% they would have £7.5k to live on and if someone who earned £100k did that, they would have £75k to live on. Do you see the problem?

Oh dear, I stopped agreeing with you now.

" in doing what women do and being bitchy, competitive and argumentative "

I don't think you should be taxed 75% on your income. That would be ludicrous.

I do think we should stop pretending that National Insurance is anything other than Income Tax by another name and do away with the upper earnings limit. Ok, you've lost your personal allowance by going over £100k, but you save 10% on NI contributions on all income above £41k.

Yes Mama that would be awful!

Tondelayo - agree, but feeling somewhat attacked for no good reason (IMHO) sorry....

Stonehair - that's interesting...why do you think people should pay more in tax, specifically? What it is going to be used for?

My argument is that at 40-45% tax I can afford to pay a gardener, a cleaner which is my neck of the woods is 15-20 per hour and if I was paying more tax I couldn't pay these salaries to people who really need it and the more responsible my job the more I need this help.

Yes I see the problem now! It was a good plan in my head...

Mama - like your thoughts :)

"I do think we should stop pretending that National Insurance is anything other than Income Tax by another name"

Yes.

I did offer opinions, but to spell it out, I don't think high earners should be taxed any more than they already are, and I think 45%, and even 40% is always too much for individuals to pay.

I think it's a red herring argument overall as employees who earn £100k + are a tiny minority anyway of the workforce and the real focus should be on regulating non-employed high earning individuals and businesses - whereas in fact they are the ones benefiting from 'tax efficiency consultancies' - which means they pay none to little tax.

Of course, no government in the past 30 years has done anything but encourage the UK to be a colder, wetter version of the Cayman Islands.

Christ that was badly written. Time for bed.

Tondelayo - :) brilliant :)

Why mention that you have private healthcare and pay for private education then if they are not some kind of justification for how you should to have to pay more tax than other people? And that is what you are saying isn't it? That you shouldn't have to pay a higher proportion of tax on your earnings than lower earners?

What abut someone who earns £100k plus and does use the NHS and the state school system - should they have to pay a higher proportion of tax than you?

Also, tax does pay for the education of professionals like doctors and teachers, so I don't really understand your comment about this.

I think I might have misunderstood something. You say you paid 40% tax and give the figure 40k out of 100k. I thought you paid 20% up to about 32k, and 40% only on income over that? (Which would equate to around 34k tax on 100k income, or 40k out of 115k). Otherwise someone who earned £1 over the limit would be worse off than someone earning just under the limit!

I think the current system of tax bands is fair as it means low earners can afford the basics.

And instead of (or before) making everyone pay another £10 a month for the NHS, would it be possible to reintroduce prescription charges in Wales and Scotland? And how much of a difference would it make? It always strikes me as very unfair that England are the only country that pay for prescriptions!

Welcome to the squeezed middle
Or as DH calls us the sitting ducks

The real problem is individuals i.e. BBC execs and such like who register themselves as a company and get their salary paid through the company thereby avoiding PAYE

It's difficult to understand this whole system that discourages hard work

I suppose the only comfort is that Nigel Lawson himself (former chancellor) has admitted this is not what he designed it for

CC the OP stated that was in tax and NI.

I understand you not wanting to pay a large portion of your salary in tax. It must feel very unfair.

You are being a bit unreasonable to think you shouldn't consider yourself 'lucky' to earn £100k a year though.

I (as an NHS nurse) who also 'works very hard, love my job, am good at it and want to work' will never earn anything approaching your salary and thousands of people on this site will be in the same position.

£100k a year IS a very large amount of money to most people and although you work very hard you ARE fortunate to work in an industry which pays you that amount.

The tax in the UK is outrageous. When I told people in Ireland how much tax I was paying they couldn't believe. Threshold for HRT should be much higher.

If you earn £100k you are not in the middle - it puts you firmly in the top 5% of earners.

The real problem is individuals i.e. BBC execs and such like who register themselves as a company and get their salary paid through the company thereby avoiding PAYE

Agree with this.

Also I'm tired of hearing about high earners being more deserving because they work hard. Hard workers work hard, regardless of their salary size. My mum has slogged all her life on barely minimum wage and at 68 is still working - she is a care assistant on less than £10k a year and will be close to 70 at retirement.

The tax in the UK is outrageous. When I told people in Ireland how much tax I was paying they couldn't believe.

Yeah, let me know how their tax system is working out for them.

I work damn hard for my 17k a year...earnings aren't a reflection of hard work alone

You choose to opt out of the state system and you can afford to. I imagine if your leg broke you would rush to a+e not your nearest Bupa hospital.

You don't pay tax just to cover what YOU use, its to cover everyone.

I agree with the idea that the richer people in society should support the less well off. Seems fair to me.

You employ people, and earn money from their labour, how many of your employees rely on state support such as tax credits to prop up their income?