To think there is very little benefit in earning more than 50k

[ReallyTired]

Loss of child benefit and now reduction in pension tax relief makes hardly worth bursting a gut to earn over 50k. People who earn just over 50k are generally the work horses in skilled jobs that ecomony needs to grow. Given that such people will be saddled with high student loans in the future, what will senior teachers, doctors gain from all their hard work?

Sorry

Wrong thread.
Please ignore.

I wouldn't class the 'super rich' as those earning £150k personally, but that's beside the point

Uhhhhm is saying anyone earning a salary is a work horse in the job they're doing. How elitist of you to think otherwise

The £50k to £65kish bracket is a bit wheel-spinning for anyone with a family, yes, in the sense of tax, CHB clawback etc.

But £50k+ would be an aspirational salary in the first place for most people.

Some people take it as motivation to push through to £70k and up. Or they seek and expat posting

Anyone who thinks earning £50k + is a bad deal can just just ask their employer to drop their salary - even by just a tiny amount.

Or they can pay extra pension contributions.

The £50k+ers will survive without troubling the foodbanks, anyway.

I'm in a line of work where I might feasibly be able to earn 50k at some point, but I'd have to work much harder than I do now, and full time. Not up for that. I work pretty hard and part time now, and that's plenty. I wouldn't be interested even if I were keeping 100% of my salary above that level, but it would be more of an inducement. Basically feel similar to tremolo except it would take me probably another decade of work to get to that position. I don't think it does any good to pretend that people with this mindset don't exist. We do.

Sure, there are many who work even harder for NMW or less. There isn't necessarily a connection between working hard and getting paid more. Sometimes it's the opposite. But while that's a fucking disgrace, it's not going to have anything to do with someone whose circumstances are completely different and the calculation they make about how hard they're willing to work. No logical reason why it would. However I don't necessarily agree with the OP because with the cost of living being what it is, and 50k not necessarily going that far in London if you bear the full brunt of securing housing during a deranged property ponzi, lots of people won't be in the position to 'opt out'.

To answer the question seriously, former CBI boss Adair Turner has an interesting take on the effect of the level of taxation on incentives. He reckons for tax rates in a reasonable range (say 20% to 50%) it makes broadly no difference. The reason is that while high tax is a disincentive for some people, it is an incentive for others.

We can all understand that high taxes might lower marginal income to the point where some people think they'd rather have a quieter life than the extra money. But there are some people for whom it has an opposite effect. People who have a target for how much they need to spend, if you increase their tax, will be incentivised to earn more to make up the loss. Similarly, people who intend to retire once they've saved a certain amount, if you increase their tax, they will work longer/harder to reach their target.

This is based on a book of his I read more than ten years ago, so I hope I've represented his views accurately.

Earning 55k perhaps not. Earning 80k+, absolutely, but you can't just leap to that!

I pay my own employer NI, so with other deductions I see a total of 38% tax being deducted on income that falls in the basic rate band. I'm uncomfortable with tax rates near let alone over 30%, and bizzarre as it will sound to most people, I would rather work fewer hours to keep my income down to 11K, avoiding the pain of 38% tax, than have the extra money that comes from working more hours. (For me there is little difference between basic and higher rate bands, I think my marginal rate in the latter would be something like 47%.)

(I am in an unusual position that I'm semi-retired, and the money I'm earning makes no difference to my life, DD will probably inherit it.)

EH? DP earns 80k. This enables me to be a SAHM. If he earned under 50 I wouldn't be able to (not in London, anyway).

I don't understand your logic tbh.

Gosh dhs and my salary totals 34k. And we both work near enough ft. If one of us earned 50k+ id happily say goodbye to my CB!!

Well there is a benefit to earning 50k+, your a lot better off than most people when earning 50k+ although I will admit depending where you live, you may actually struggle on 50k.

If you don't like it you can move abroad to a country with no tax but you'll probably have to pay for healthcare, schooling and you won't be getting any top up benefits.

I'd much rather earn £50k + without CB than £17k with CB,

I agree 50k is not a lot in London. My mum has brought up 4 kids on 32k though, it can be done. But she bought her house a good 15 years ago when it was a lot cheaper.

DP and I could only afford a 2 bedroom flat here and our combined income before I went on maternity leave was £115k. If we'd earned below 50 we'd have been stuffed.

I've always been a relatively lowish earner (around 20k) but I think YANBU.

I do not think that people who earned more should be taxed more, nor do I think that they should be penalised for working hard and achieving a high wage.

I genuinely believe everyone should be taxed around the same percentage, the higher earners will end up paying more anyway.

We have a household income of over 50k, by the time tax and NI is paid, food, ctax, water/electric/gas/fuel/insurance etc is paid we have no hope of buying a house or taking holidays etc. We live in the south east and rent a crappy 3 bed end of terrace, our car is a banged up Vauxhall.

In fairness the OP sort of has a point. I run my own business and our accountant advised me and my partner to be careful about dipping into the £50/£60k salary zone because of the tax implications.

Luckily it's a fact that's never troubled us. Our child benefit is intact!

However, to describe people on this income as workhorses of the economy is a bit deluded. And to moan about it is in poor taste.

As other posters have noted, £50k is a better place than £17k. Fact.

nor do I think that they should be penalised for working hard and achieving a high wage.

Ah that old chestnut. You do realise working hard does not necessarily equal high wage? And not everyone on a high wage works that hard?

I'd much rather earn £50k + without CB than £17k with CB

For larger families, eg 4 or more DCs, when you include tax credits and housing benefit, the difference in actual income between those two salaries is a lot smaller than you'd think.

I genuinely believe everyone should be taxed around the same percentage, the higher earners will end up paying more anyway

The problem with that method is that the percentage necessary to ensure that the country has the tax take that it needs to pay for services, the percentage would be crippling for the lower earners and leave the higher earners with an even higher disposable income than they have now.

I believe the opposite to you – progressive taxation – lower earners keep more of their income because they need proportionally more to cover basics, whereas higher earners have more than enough to cover basics and a good amount of luxuries.

If you don't like it you can move abroad to a country with no tax but you'll probably have to pay for healthcare, schooling and you won't be getting any top up benefits.

Alternatively, you stay here and work fewer hours, don't put in the extra effort required to get to the stage where you earn 50k plus, or both.

Maybebabybee I think your mum having bought a home 15 years ago is, as you say, the definitive factor. It's a different world for people who are having to try and get a deposit together, privately rent, just scrabble together enough money for somewhere and pay a huge mortgage etc.

There is often an effect if you earn just above a threshold. The same issue arises at the £100K threshold with the loss of your personal allowance - £1 lost for every £2 earned over £100K.

So I do see what the OP means to an extent. There is no point in earning just above a threshold unless you have a reasonable expectation that your income will continue to increase i.e. it might be better to earn £49.5K than £50.5K (note - I haven't done the maths)

Having said that we have a high household income and I agree with the removal of child benefit above certain income levels because there are other people who will benefit more from the money, we can and do manage perfectly well without it.

Oh. What a disappointment. I thought you were going to make the rather more interesting point that earning more than about 50K doesn't significantly increase your happiness. There are studies that suggest this.

I think the OP is getting a slightly hard time on here. I was asked to increase my hours at work, which would put me over the threshold to lose child benefit (or most of it). So I did have to decide if it was worth doing the extra hours.

The benefits trap is a well-known problem. This isn't exactly a problem, but you do have to consider if the extra money you will earn after tax will outweigh the loss of CB especially if you are just under the threshold and then get a pay rise that puts you just over it.

Try running an economy without the people on minimum wage. It'll grind to a halt much faster than if you lose the people earning over 50k.