To think half of all households not paying their way is OK

[FraidyCat]

and should be a formalised target?

Thought prompted by a Telegraph article.

www.telegraph.co.uk/news/politics/labour/10927902/Labours-costly-legacy-of-dependence-on-the-state.html

Several years ago when I got the figures off the government (ONS) web site I became aware that at that time almost exactly 50% of households received more from the state than they payed in. All the article tells me that i didn't already know is that the recession has caused the figure to rise slightly since, and that in the 1970's the figure was in the region of 40%. (So 25 years after Thatcher, the country is more socialist than it was before, contrary to what many people seem to believe.)

If you'd asked me when I was younger I would have said help should be for people in exceptional circumstances. Exceptional in statistical terms would mean that figure should be 1%, or 5%, or at most 20%. However I can't see any realistic way back to that from where we are.

Given that we have two main political parties, one of which can be caricatured as the party of the poor that wants to maximise resdistribution, and the other as that of the better-off that wants to minimise it, maybe they should agree to meet half-way and formally set 50% as a target/constraint?

I suppose I think it would kill some arguments that are pointless, because the conflicting forces that lead to the status quo aren't going to go away, and leave politicians to focus on optimising the narrower details of redistribution.

I think that the threshold for paying tax should be a lot higher. Why tax people and then give it back in tax credits? Madness.

Higher thresholds and a higher rate for those who do pay would save a lot of bureaucracy and hence costs.

Secondly I would vote for transferable tax allowances for all members of the family. Then a family with two children would get four tax allowances, and pay less tax than the same earners with no children. I think that would support parents who are coping with the costs of bringing up future tax payers.

Giant corporations with huge profits, especially those who have their "Head Office" registered overseas are the biggest tax-dodgers of all.

With their massive legal departments and smart-alec tax advisers they avoid paying billions of pounds in corporation tax year after year, whilst paying their army-sized workforce a pittance.

And when you look at the names of their non-executive directors, who they're related to, where they went to school and who they play golf with you begin to realise why they get away with it.

I remember someone saying "We're all in it together".

Now, what could they have possibly meant by that?

Perhaps the wealthiest ought to lead by example and 'pay their way'.

can anyone clarify:

are they saying that 50% of families take more out of the system than they put in for any given year?

Or is it that 50% of families take out more than they put in cumulatively, over a lifetime?

For instance, the pensioner who no longer works would be taking more money out each year than he/she puts in.....but presumably contributed through a lifetime of taxed wages.

are they saying that 50% of families take more out of the system than they put in for any given year?

Yes, 50% of households at any given time.

For instance, the pensioner who no longer works would be taking more money out each year than he/she puts in.....but presumably contributed through a lifetime of taxed wages.

Yes that's true for a pensioner who only has state pension.

"At the extreme ends of the income scale, the wealthiest still carry an enormous burden..."

Good point. Those fucking great piles of cash don't carry themselves you know.

Surely most people take out more than they put in at some times in their lives and vice versa? If you adjust for people starting work later, and living longer on pensions those of us of working age are probably contributing more! And it's also meaningless because they only count cash contribution. I know a lot of people on benefits who put a great deal more into the community than many people in well paid (but socially unproductive) jobs. Carers, volunteers, full time mums.... Don't suppose the daily telegraph counts their productivity though... all those undeserving poor people, ripping off the city bankers, and wasting their time looking after their children/sick/elderly when they could be working a 60hr week in a sweatshop making other people richer!

Just found a second telegraph article on the same subject:-

www.telegraph.co.uk/finance/personalfinance/consumertips/tax/10929370/More-than-half-of-homes-take-more-than-they-contribute.html

It has a lot more figures:-

Households with an average income of £104,000 paid £30,000 more in tax than they received from the state last year, ONS figures show.
The top ten per cent of earners contributed £26,984 in income and council tax, plus £10,303 in indirect taxes such as alcohol duty and VAT – a contribution to the public purse of £37,287.
They received £2,284 in state cash benefits, which include child benefit, maternity pay and pensions.
The cost of educating their children came to £1,274, while they used NHS treatment worth £3,410 – meaning their total cost to the Exchequer was £7,264.
By contrast, a family with the national median income of £23,069 received £3,798 more in benefits and services than they paid in taxes last year.
They paid £4,620 in direct tax and £5,029 in indirect taxes, but received £6622 in cash benefits. They received schooling worth £2623 and NHS services worth £4,202.
In total, they paid in £9,649 and received £13,477. It means for every £1 they paid in, they got £1.40 back.
The poorest ten per cent of families, with wages of £3,875 a year, paid £4,611 in direct and indirect taxes and received £13,559 in cash benefits and services. It means they received £2.94 in state support for every £1 they paid in tax.

I wonder if they assume that EVERY family with an average income of £104,000 sends kids to private school

"At the extreme ends of the income scale, the wealthiest still carry an enormous burden while the poorest see 56.4 per cent of their gross income coming from handouts."

You're mistaken only considering direct taxation and not including indirect taxation. The poorest people have the highest percentage tax burden.

"Households with an average income of £104,000 paid £30,000 more in tax than they received from the state last year, ONS figures show."

Households with an average income of £104,000 received £104,000 from the society they live in. Giving tax back to that society allows it to function. And thus create opportunities for people to earn £104,000. It really is that simple.

The current situation is mad. They should raise the tax threshold instead.

It's not often pointed out especially on MN, whih generally loves a good tax, but the high burden of taxation on the richest actually incentivises the growth of the gap between rich and poor. After all, if the richest get proportionally less rich, who's left to pay the tax to spend on everyone else? So systems that tax the rich eavily to pay for a big welfare state for te bottom 50% end up having to put policies in place that encourage the rich toget richer - so they can pay all the tax.

'Soak the rich' has great popular appeal but actually incentivises inequality in the long term.

HugeManatee interesting hypothesis, but not borne out IRL, compare Sweden and USA for example. USA big on the rich getting richer, massive income inequality; not big on 'soaking the rich'. Sweden vice versa.

Sarah, what a stupid comment. I am
of the people that others love to hate. I employ people and only pay the minimum wage, and i am a BTL landlord.

First of all the quality of staff is so low in this country they aren't worthy a penny of the min wage. My staff have stressed me out so much causing problems, reporting me to various organisations because i disciplined one of them for example. And no i wasn't worth reporting, and i wasnt breaking the law, even the organisation involved said it was clear it was malicious. I have 20-25 year olds requesting pay rises simple because they think they DESERVE more. I have been working since i was 11 so i will enjoy the fruits of my labour thanks sarah.

Also being a BTL landlord is one of the most stressful things you can do with dodgy tenants who refuse to pay and tenants who leave the property in a horrendous state simply because they dont care and they know it will cost me too much pursuing them. I think a lot of BTL landlords provide a good service and where would people live without them?You cant cap rents for the points mentioned earlier in the thread.

You're mistaken only considering direct taxation and not including indirect taxation.

Indirect taxation is included in the statistics these articles are based on. The quote in my previous post makes that clear.

Also being a BTL landlord is one of the most stressful things you can do with dodgy tenants who refuse to pay and tenants who leave the property in a horrendous state simply because they dont care and they know it will cost me too much pursuing them

That was true when I used an agent. Now I don't and I go on gut instinct, not just credit searches, it's different. The minimal term I've had a tenant since doing this is coming up 3 years. I chose and keep the houses nice so I'm not attracting bottom of the market. Much less stress.

Tbh, with that and your comments about your staff, I can't help but think you lack judgement.

returnvisit, have you considered that if you paid more than MW, you might get better staff?

It's a bit rich to nblame Labour, inequality has risen massively particularly towards the end of labours time in power and if there is more inequality then of course more is going to need to be done by the state to redistribute that wealth. Yes, 50% is high but the way to change this is to change the underlying trends in our economy that make it necessary.

1. I don't believe their method of calculation to be factually accurate. I think the BBC had a calculator which purported to show how much you received from the state versus how much tax you paid. It got the tax paid approximately correct, though not completely (underestimate). It massively overestimated the costs for a healthy person recovered back from e.g. the NHS. I tried with several family constructions, and it appeared to assume that even if you were single (not having children using state education, though actually that should not be 'charged' against the parents but against the childrens' future income anyway, and state education benefits employers by providing a literate population rather than the parents really), it assumed something like several NHS doctors appointments per year, and that you were using council services (I don't think it included council tax in your taxation, actually, either- plus most single people I know don't use council services very much, for example they use private gyms, buy books rather than use libraries, etc. Bin collection every fortnight is not that expensive really), and so on. I think the calculation method is right-wing propaganda to fuel the prejudices of the wealthy towards their own relative value. I think a truly accurate calculation would include other contributions e.g. carers who save the state money by providing practically unpaid care for the ill and elderly.

1. Even if it was correct, the only reason would be that those 50% were paid inadequately by their employers to be able to contribute more tax. This is not something the individuals can address, but something that would need to be addressed structurally by evening out wages and increasing equality (perhaps a maximum wage too, in addition to a higher minimum wage- it is very clear to most people that the highly paid aren't usually working that much harder than lower paid people, provided both are on similar hours). I would agree that the UK needs to make greater equality a constitutional target, for both economic and social/health reasons. Is this what you are proposing? If not, I don't see how you are suggesting the problem be addressed at all.

returnvisit: If you've been working a significant number of hours for wages since you were 11 (rather than e.g. a paper round, which really does not count ffs, we have all done those), you probably ought to consider reporting whoever employed you for child labour and your parents for neglect, rather than boasting about it. The UK is not Indonesia, and that kind of thing is not acceptable here.

Boulevard, sadly that doesn't really compute.

I have a young graduate intern, definitely not paid minimum wage, and she is horrendous to manage. Everything that is not the core of the job is too much trouble, not what she is paid for. Anything that can be had must be given to her or she complains to HR that she is being discriminated against. She is lazy too, so the rest of the dept pick up the slack, but if she is asked to help someone else she goes off on a rant about capability procedures - as in if they can't do the job they should go and let someone else have the job.

Sadly she is not unusual. Almost all of the new/young teachers I work with have skewed expectations. They all expect pay rises and are extremely vocal when they don't get them. They don't understand the term 'national pay freeze' and have an amusing tendency to threaten to leave, to work for someone who appreciates them. They then do the bare minimum of work and leave the rest of us to pick up the slack. I have had to discuss this with a couple of them and, like the intern, they are astounded that the world doesn't owe them anything. They too report to HR and one has involved his union - who are trying to explain the realities to him, but he just sees that as they too are against him.

returnvisit's less skilled workers are not the only uber-entitled young people out there.

And don't get started on the questions: why won't young people these days even contemplate renting a bedsit/flat? Why do they think they must wait until they can buy a fully furnished 3 bedroom house? Why isn't a starter home good enough any more?

Woodlice - you might want to consider how the rural economy in the UK works then. How do farmers utilise their families in order to remain viable?

I ask as every kid round here works long hours around schooling, from an early age, starting with basic feeding chores. This is one of the reasons for the long school summer holiday - harvesting. I did all of this when I was a kid, as did all of my peers. It hasn't changed in decades.

That isn't neglect, it isn't illegal and it is a way of life for a large number of kids all over the UK.

Joysmum, i dont lack judgement. If i need an
Office junior to do menial jobs, im hardly going to pay over the odds, that doesnt make business sense.

Woodlice, i helped out in my parents business, i wasnt taken advantage of, it gave me a work ethic so it was good for me personally. Nomama makes good points.

People like to make comments when they have no direct experience of situations!

Silly cost of living disproportionate to the average wage

Businesses not paying living wages

High cost of housing

If that was all addressed it would save the state ££££££££s