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?

It isn't about stress. You can have a pretty good life on 46k. It's whether the extra effort to get 55k is justified. I am not suggesting life is hard on either 40 or 50k. My husband does not see it as worth his effort to increase his income.

The more people take home, the more they have available to spend. This creates jobs and more taxes.

deogratias it's dishonest and ignorant to claim that Osborne reducing the tax rate increased revenues, since it didn't. It did cause some high earners to delay the receipt of some income - temporarily and artificially increasing tax revenues immediately after the reduction. Reducing the top tax rate from 99% to 40%, as in your fantasy example, would be a completely different matter, as you know perfectly well.

Wish I had your problems. Literally staggered. Must be nice to bust a gut for a real reward.

We did in the 70s have an upper rate of 99%. When Lawson brought top rate down to 40% I think that was from 60% and tax revenues went up and stayed up. It's the Laffer curve we all know about. The left don't like the idea.

If you bring tax rates down you get more money in from tax and so help the poor but the left would rather they hit the rich even if that means the poor end up with less money. This shows how much better the right are for the poor than the rich but some on the left would rather everyone were worse off than those who earn the most pay a lower rate of tax. The perverse left for you. They cut their noses off to spite their faces.

The Laffer Curve shows that no tax revenue is raised at 0% tax, no revenue is raised at 100% tax, and between these two extremes some tax revenue is raised.

The Laffer Curve doesn't say anything about the optimum point of raising tax revenue. Although it is often used that way by people who argue dishonestly from an ideological point of view. Or who are just easily led.

I think that the UK would be a much nicer place if it really wasn't worth worth earning over £50k so that people started working shorter hours once they reached that level.

I live somewhere with lower taxes that gives middle class people a lot and working class people less. I don't have a family doctor (because the provision is shit), there are homeless people everywhere. MH and addictions are untreated. Vulnerable people (like people with LDs that I know would have a SW in the UK) are left to their own devices, often homeless and abused. SN provision in schools is non-existent.

I'd rather pay more tax and have more services. Even services that I don't need.

No sure most of those with the choice are couching it in terms of a problem. Just a point of fact.

It does have implications in terms of service provision in certain sectors though.

Having said that tax is tax, the rising indemnity is more of an issue to general practice IMO.

I don't know whether it's a problem necessarily or not. Presumably some of the people choosing to work less because they feel earning more than X isn't worth the effort they need to put in have specialist skills that would be of general benefit to society if they were available more. Others will be freeing up some paid work for a person who needs it more, perhaps creating a training vacancy of some kind to fill the gap left by them going down to 20 hours a week or whatever. Some of the people reducing their hours couldn't cope with full time anyway and would expensively implode if they tried, so they cost less by avoiding the nervous breakdown even if they don't pay as much tax. Too many variables.

So I don't say it's necessarily a problem, but it's stupid to pretend it isn't a thing. Or that 'what about people on NMW' is an answer to it. Indeed, some of the people doing this are on NMW, because in some situations, tax credits withdrawals act in a similar way to the 50-60k and 100-110k bottlenecks. There are even people who ensure they don't work enough to pay any tax at all. Now the personal allowance is quite high, it's a feasible option for some people to simply live off that. £900 a month can be more than enough, especially for people who own a home already.

dh has kept his income just under 50K (by reducing his hours & some work benefits (including a very small pay rise this year)). We have four children & the loss of CB & tax credits (severe disability premium for one of them, without which we wouldn't be eligible) would leave us worse off. I expect when UC comes in the situation will be reversed & dh will increase his hours & gratefully embrace the 50k.

If you have children then you need to go well above the 50k in order to make up the loss - tax/NI/CB & possibly TCs.

Not sure where the losing 69% of earnings came from - national insurance is only 1% at that level so tax, NI and student loan can only come to 50%. Of course the sensible thing to do is contribute to your pension over the upper tax limit so you won't pay income tax on it at all until you retire and will be a lower rate tax payer! That's if you earn not a massive amount over £50k

www.telegraph.co.uk/finance/personalfinance/9229157/Child-benefit-claimants-paying-higher-tax-rates-than-millionaires.html

Perhaps you should get a job too and then you wouldn't feel the squeeze so much?

I'm not an expert in these tax conversations but I earn £59k. I take home more money than I did when I earned £49k (about eighteen months ago) although we didn't qualify for CB anyway. I am just ridiculously grateful to have the income that I have because, although I have worked bloody hard, so have people on less than half my wages. A lot of it has just been luck and brass neck for me.

I earn more than £50k and definitely feel the benefit of the extra income. Although some of it disappears in tax and we lose child benefit, I am still taking home more at the end of the month than I would take home on a smaller salary.

I do think there has to be a cost-benefit analysis of moving further up the pay scale, but more in terms of stress and workload than any benefits /tax that you might lose. Personally, I chose not to apply for my boss's job when it came up, because I didn't want the additional responsibility or stress. Financially, though, I'd undoubtedly have been better off.

I do think it's silly to suggest that those of us earning over £50k are the "workhorses" of the economy. I am fortunate to have good skills that make my time more expensive for my employer, but I don't believe that I work any harder than many people on much lower salaries.

Little benefit in earning over 50k

I'll be sure to tell my friend on 17k how lucky she is.

I haven't read the full thread but I'm assuming what you mean is that you won't be a grand better off when you jump from 49 500k to 50, 500k?

Not 50k exactly and not for precisely the same reasons but I actually agree:

Once I hit the 90k mark I basically wasn't really bothered anymore by how much further up it went. On 90k I was at the point where I could afford anything I was remotely interested in and still had cash to spare and put into savings. Every raise I've had since has just upped the amount saved each month.

Only on MN.

My heart bleeds for you.

I bust a gut for half of that; working insanely long hours and holding huge amounts of responsibility. I love my job though and recognise that I am lucky in many ways.

My husband is not in th 50k bracket. He could earn 55k, but the costs aren't worth it. In many jobs 55k is the top of what ever anyone can earn

But you have to ask yourself whether that matters. Does it matter to anyone apart from you and your DH that he doesn't want to do XYZ in order to earn 50% of what his increase in income is between £45-55k

In my experience, people aren't earning another £5k at that level because they're putting in more hours, or making more product or setting up an extra new business employing people, it's more often just a promotion with extra responsibilities.

Some people will also want to do more, take on more responsibility, supervise more staff etc just because they like it and the fact that they're getting paid more to do it is just fine by them. I would have taken this attitude once, now as a single parent to DS I have to consider whether any changes work for our family and often I have to consider the non-financial aspects of decisions like this.

Not sure why it is the fault of the tax system that some people require a higher degree of financial reward in order to do more.

There isn't any evidence that a top rate of 40% over £47k (roughly) is holding back the economy if that's your concern.

This thread is bizarre. Those earning less than £50k often think anyone on over this amount is totally minted. It is not always the case particularly in London. Where I live, a three bedroom terraced house is £1,000,000. Yes, £1 million pounds. If we were to buy today we would need salaries of £150k to £200k EACH to be able to afford it. I have simply no idea how those living in London manage on £50k a year with a family.
It seems utterly detached to those that live in other parts of the country which is why threads like this are ridiculous. People are comparing apples and pears.

Taking a lower-paid job to have a shorter commute is a reasonable choice.

Saying "there is no benefit to earning more than 50k" is just moronic.

Earning more does not always come with any downside.
Sometimes a promotion can be in the same workplace, with the same hours, and different responsibilities that may or may not be more stressful depending on what you enjoy and are good at.
Sometimes you get a payrise without a promotion, so you'll be doing the exact same job, for the same hours, in the same place, but getting more money. How could there be "very little benefit" in that?

If earning more money does come with a downside (longer commute, longer hours, more stress) then you weigh them up and decide what will have the greatest impact on your life. Of course. Nobody would ever dispute that.

It's also worth remembering that earning more than £50k a year often involes higher overheads. Working regular 60+ hour weeks means you must outsource certain tasks such as home repairs and updates. Also if dual income it's a nightmare paying for childcare and a cleaner.

Just this month it's cost me about $400 to work because I had dinner delivered for my family, had the cleaner weekly and sent laundry out. I'm 36 weeks pregnant tomorrow and have been working past midnight 4 days a week for the past couple of weeks. On Fridays I finish at 10pm.

While I don't doubt everyone works hard I do question the logic that minimum wage jobs are as time consuming as higher paid ones. My experience has been that making more money means I work longer hours for it and the work carries over because the expectations of working outside of business hours are much greater. I've also had to pay for my education and continuing education to keep my salary level. I fully understand the logic of a progressive tax, I just think the rate increases at a very low amount of that is the only income for a household supporting others.

But £50k is far, far more than most Londoners earn. The median salary in outer London is around £25.5k and in inner London is £35.5k. So someone while someone earning £50k is clearly not going to be rich beyond their wildest dreams, they are still far better off than most of the people around them.

There is earning and there is income after benefits. Not being goady about this but someone earning £20k a year in London is going to qualify for benefits, including housing benefits, that someone earning £50k won't qualify for. The value of those benefits means the person earning £20k a year isn't really living off that amount. Their true gross income is much higher because of the benefits received, especially in London. Nothing wrong with this and it's how our society should work but at the same time, someone making £50k in London isn't necessarily going to be better off than someone making £20-35k in London. In other parts of the country you will see more of a difference if the household is dual income and the DC are out of the childcare years.

I've got a friend who works in TV and he was offered another role that paid 50k more than what he was on and he wasn't interested. But I think his basic is about 150k which isn't really what the OP means. Still I would have taken a new role for that much of an increase