To think £100k pa is NOT 'the squeezed middle'?

[ArsenicFaceCream]

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The article is very confidently attributing the definition to Danny Dorling, but did he really name this figure?!

These women are fools.

Isin I'm an example of someone who might be "frightened off". I'm a high earner, but we could manage on DH's earnings - so if my tax went up I might well decide it wasn't worth working any more (or at the very least I might move to a job with fewer hours and which pays less). My currently large tax payments would disappear. There are plenty in the same position.

Again, I'm not saying anyone should be grateful to me for working and paying tax - it's my choice. Just pointing out that beyond a certain tax level, I and many others would make a different choice. And then all that tax revenue is lost.

Would you feel better about it if - say - someone's salary was reduced from 100K to 25K - but offered a free workplace nursery, season ticket, use of company holiday facilities, canteen etc? They couldn't actually do this since its a tax fiddle - but there is a quid pro quo logic to your employer defraying your working expenses - and salaries are a transparent way of doing this.

OddFodd 1) there are loads of countries other than mainland europe. US, middle east, asia? 2) As per my previous post, it's not simply a question of people leaving the country, they may choose to stay and just earn less (and pay less tax).

I was thinking of doing AIBU about this very point.

My partner has a good job, we have 1 child at private school and 1 child in the local comp. Partner earns a good salary but it always surprises me how other people spend their money. I shop at Lidl and Aldi and spend about £35-£40 per week on food. I drive our only car a 14 year old banger that is on it's last legs. We only eat out if there is some sort of discount voucher involved. Holidays are only a possibility if we have saved up enough points. Where as others I know holiday abroad 2/3 times per year, one woman spends £500 per week on food for her, her dh and dd, most drive top of the range 4 wheel drives and their homes are something out of Homes and Gardens and they earn either similar or less than dh.

After reading this article it made me feel so much better because I now realise that there is one more thing we don't have that these families must have and that is debt. Everything we have we own, apart from a small mortgage on our home.

The tax revenue would reduce massively. And there does come a point where people think "hmm I can slog my guts out here for my £100k or I can move to Dubai and get it tax free."

Mini is correct, if it really wasnt worth earning the high salaries and you paid so much in tax of course you would think again. I am really not sure this is the right country for us and i have lived here all my life. My DSis is emigrating and the UK are losing her as a tax payer. My DB is looking at Asia.

I think some people think it will always be others to pay for the services regardless of the circumsances

minipie - I agree. We were double income top tax band - but it was all a strain. So I quit work, fired my nanny and my cleaner and nipped in the bud the Saturday afternoon pizza out habit we'd developed. I am now economically nearly neutral - no longer paying tax, or buying in support services.

shrug

Am I no longer a fat-cat now?

minipie, that's my point - as inequality has zoomed ahead so dramatically, most people have got a lot poorer. This is bad for them and bad for the country. One symptom of this is that money is concentrated in fewer hands so those hands pay a bigger share of the tax bill (the ones that don't manage to avoid it, that is).

Tax 'burden' on the well-off going up? That's because they've got an even bigger slice of the pie. Inequality is increasing rapidly and has now reached Victorian levels. This is bad for everyone, including - in the long term - the rich. But we may have to erect a guillotine before they recognise that a decent society is in their own interest.

We have three lots of friends who have moved to Dubai. Two couples are lawyers and one couple he is an engineer she works in IT. Now they really do have wonderful lifestyles.

High earners pay more tax because they have a disproportionate share of the income, top 1% have 14% of the income, they are hoarding all the money so that there is less of it available for the rest of us.
?
In other European countries ?the top 1% have a lower share of the total income, in Switzerland it's 7%

If the elites earned less the tax revenue from them would go down but there'd be more income available for the rest of us?

I'm not sure Switzerland is your best example given their average incomes and tax regime.

(I cross posted with Edam)

point being that even Switzerland,
which is not a country known for egalitarianism, is more equal than we are!

I'm interested at two of the arguments used on this thread:
High earners will leave the country to avoid tax
And
High earners won't countenance a move out of London, even though their money doesn't go far there.

If people won't move to other UK cities, why on earth would they move to another country?
They can't both be true...

InMySpareTime

You can move out of London, spend hours commuting and standing in trains, and not have much to show for it.

You can move abroad, not commute / have a better commute, have a bigger house, have more income left... need I go on?

Suzanne, you put it so much better!

edam that might work if high earners didn't have a choice. As I say, they do have a choice. They can choose to leave the country or (perhaps more likely) just take a lower paid job.

That would mean that everyone was more equal - as there would be fewer high earners - but it would also mean that everyone was poorer as there would be a far lower tax take to help out those most in need.

Would you prefer everyone to be more equal even if that meant everyone was poorer?

?Well gosh Edam, I don't know about that, your guillotine and pitchfork imagery cuts to the chase very effectively

Would you prefer everyone to be more equal even if that meant everyone was poorer?

interesting attempt at 'spin'

If the elites earned less the tax revenue from them would go down but there'd be more income available for the rest of us‎

Er, no. That's not how income works. There isn't a fixed amount of income that can just be shared out differently.

If I quit my job as a high earning lawyer, that doesn't mean that a hospital cleaner suddenly earns more. If anything she earns less because my taxes are no longer available to help pay her wages.

If I quit my job, the work just goes to another high earning lawyer (so again, doesn't help that hospital cleaner earn more) - and if enough of us quit, our clients would just go to law firms in other countries instead. And then everybody in the UK loses.

handcream I think it depends how you view the value of private school with the risk of having to take your kids out.

For me I would assess my "utility" from the scenarios as follows:-

State secondary : 0
Private secondary : +10
Having to take child out of secondary part way through : -100

So I am only going the private route if I am very very sure I can afford it.

(I should probably add that dh and I are both state school and Oxbridge which undoubtedly influenced our views.)

If you are private yourselves and all your friends are private you may assess the figures as -50, +100, -100

In which case it is a very different decision.....

InMySpareTime - if I move out of London I'd have to drop down the quality of organisation I would work for and firm that I would do. And pay would significantly drop. Same with DH. Whereas if we were willing to go abroad, we could largely keep the quality of work/employers without sacrificing income levels.

It depends on the job I guess. In theory if you pay your staff less, your company has higher profits, which means it pays more corporation tax instead. But as corporation tax is quite a bit lower than higher rate income tax + NI, that results in less tax being paid overall.

minipie, change the flipping record - the rich are always threatening to leave if they don't have things their own way. Hasn't brought down society yet. What has crashed the economy is listening to the rich and taking them seriously - turns out that was a massive mistake.

We need an extractive elite like we need a tapeworm