So people earning over £80k are wealthy, unless they are JC??

[usernamealreadytaken]

In an interview with Julie Etchingham, JC apparently said he's not wealthy, despite earning over £130k p/a, because of WHERE HE PUTS HIS MONEY (but he's not going in to that!). AIBU to think this is the most ridiculous statement he has managed to put out in recent weeks?

Given that Labour want the wealthiest in our society (earning over £80k) to pay more taxes, what Good Reason could he possibly have to not include himself in that bracket? Discuss :-)

Invest any savings into an ISA to avoid income tax and capital gains tax. I would assume that the vast majority of minimum wage earners won't be putting their money in to ISAs where the money effectively devalues currently because of the rate of inflation vs savings interest. Counterintuitive.

Invest in a stakeholder pension, so that they can put £2,800 in, and HMRC top it up with a further £700 so the actual investment is £3,500. A wonderful idea, but I certainly don't have the additional to spare, even though the government will top it up. I have my minimum pension contribution deducted from my wages - it's not for tax avoidance as I don't earn enough to pay tax.

If their earnings are really low, they could voluntarily pay NIC to guarantee a state pension. Am I missing a bit where somebody struggling on min wage has enough spare to make additional contributions??

They can reduce their working hours/earnings to qualify for higher tax credits, free prescriptions, etc. Fantastic idea, we should encourage all low paid workers to reduce their earnings as much as possible so they can claim more benefits

The lower earner could transfer some of their unused personal allowance to their higher earning spouse. a f/t min wage earner uses their full personal allowance.

I am not against any individual minimising their tax liability via legal means, BUT as I have said before it is hypocritical to vocally shame the "wealthy" for doing so whilst simultaneously doing so yourself. If my understanding is correct, JC would have had to donate around £25k to charity to receive the £6k tax break declared on his tax return - he donated more via the donation and tax break to his chosen charity than a great number of his grassroots supporters would earn in a year to support their families. And that tax money does not go in to the public purse to pay for the NHS etc.

Imagine if Labour do win the GE and implement their new tax regime. Now imagine if all of those new additional rate taxpayers follow a similar legal tax minimisation strategy - will we call out the Labour government for effectively putting less money in to public services, or will we just support them in taxing everybody even more to make up the shortfall? Let's also not forget that millions of low paid earners are among the most generous charity donors; those who have little tend to give to help those who have less IME, albeit in smaller but frequent amounts - they can Gift Aid their donation but cannot mitigate their own tax liability.

My tax reduction/avoidance legal methods for the low paid are used eg both in a couple claim the single person allowance rather than just one working longer hours. Anyway the bottom line is no one who acts within the law to do tax avoiding things like paying into a pension (or even choosing not to work when they might) is acting against the law.

Those on the left on the thread may be pleased with Corbyn's newly announced plan for a super tax on very high earners or their employers which surprisingly will not apply to smaller employers - so your standard big bank pays it but someone on £10m a year at a small hedge fund would not.

The truth is most people on lower pay on paye have no way of minimising the tax they are paying. Pretending anything else is rubbish.

histinyhandsarefrozen

"How is this fair? Someone on 70k with a £2mil house is seen as less wealthy than someone on 80k with no assets?

Every election, my labour friends proudly announce how they would happily pay more tax on their salaries. Yeah, I would too if I had two buy to let properties or inherited a farm like they have."

Quite a few Lib Dems around here, are happy to pay an extra 1% of their income in tax as well - usually the ones who have benefitted from huge house price inflation. They never seem to be in favor of the idea of imposing a 40% tax on any capital gains from the sale of residential property. No that could mean they lose out on hundreds of thousands of pounds. Far better for those without assets to front up from their income.

My view there should be a flat tax on all an individual's or household's revenue (whether capital gains, income, dividends or inheritances) kicking in at specific thresholds with no exemptions, even if it is 40% on anything over 80k. Also I do not see why a buy-to-let owners can deduct any of their mortgage costs from their taxable income when renters cannot deduct their rent from their taxable income or at least the portion of the rent that is not paid for by housing benefit. Not that I get housing benefit.

There is a piece in the Telegraph today discussing that Theresa May actually wants to move in the direction of taxing whole assets rather than clobbering only income.

Dh and I have only what we earn. No rich relatives. No inheritances. No leg ups. We are fair game. But, as missedcall says, those who have benefitted from windfalls of whatever kind are largely exempt.

In a recent thread someone was complaining about potentially losing benefits because they were due a large inheritance. At the extreme end of the scale, then, someone could win the Euromillions and still be "poor" because only earned income is the indicator of wealth.

Sorry, that was The Times. Bought a different newspaper today!

I agree with taxing all assets, except earned savings.

It's quite hard to do that fairly brasty. Eg all the equity in my house is from income taxed at 40%. My neighbour has a lot of equity in her house which will be inflation over the 40 years she has lived there. Her income is much less than mine. So would she have an asset tax on her house equity but I would not?

Then what about all my Indian neighbours with gold? The plice have had to send round warnings that so many people have £50k+ of gold at home burglars are coming up here to steal it. Would the asset tax apply to those marriage dowry assets and presumably expensive cars?

Yes that is true, unworkable. Fair point.

I definitely think we need a wealth tax, maybe one that takes account of outstanding mortgages on property.
And yes to the people who are happy to pay extra tax over 80k but have house(s) worth hundreds of thou if not millions, I guess they would change their tune if it was a tax on wealth not income.

And I think it should be over a certain value and regional so if an average 4 bed house in London is 500k, derby is 300k it should only be the value of the house greater than this amount.
I

By that I mean tax on the value above this level.

very hard to tax assets that aren't being exchanged - like janet said, my p could have a mortgage free house worth £350k, but they live in it, if we taxed them how would they raise money to pay the tax on the asset except through selling it, assuming they're otherwise getting by on non-stellar incomes.

that's why we have inheritance tax, income tax, capital gains tax to tax people at the point assets are liquidated.

The FT is always going on about having a wealth tax. France has one. You have to add up all the asset you have. I don't like the idea of them as they seem to penalise those of us who save rather than those who waste their money and spend it all. I have had years of even stuff like hair conditioner being off the table as too expensive and I have always worked full time even with tiny babies so not surprisingly I have more money than women who don't have that. It would seem a bit mean if the money I now have were taken away from me because I've been very careful in life and given to people who have perhaps not made the same kind of sacrifices.

We already take 40% of capital away when someone dies in inheritance tax. I suppose we could move that down even to estates worth £10k.

Also if I lived in the NE where I am from this house would not be worth that much. Just because I happen to live in London I have had to work much h arder to buy a house than had I stayed in Newcastle so intead of someone being sorry for me for that I have massive stamp duties to pay in London and also now suggestions I shoudl have some of the value confiscated even though I have no plans to move for 30 years and the fact it is a more valuable house than were it plonked down in Sunderland is no use to me as I live in it.

I think house price inflation has had a really bad effect. It has made some millionaires, but others who are just as hard working - nay, even in the identical job - only a bit wealthier, depending on where someone lived. It has given some people huge inheritances, whilst others have nothing and earnings can never make up for this. It has provoked greed on a huge scale, in the form of buy-to-let. There are now huge generational divides.

And it has made taxing income very unfair. But, I agree, taxing property is hugely difficult. It's not my neighbour's fault their house cost £125K and is now worth £1.5m. Dh and I have lived quite prudently to pay off most of our mortgage, so why should we be penalised compared with someone who has a large outstanding mortgage but also two new cars and takes several fancy holidays a year?

I've just picked this up from FB.

A back-of-an-envelope calculation - someone on £95,000, with no diversion of income into pensions etc, would be paying an extra £750 a year income tax - £62.50 a month - about £2 a day in fact.

That would surely scare a lot of higher earners out of the UK

said it before and will say it again, happy for grippy tight right wing people to leave country, there will be others who want to take their jobs.

It is not the ones with jobs that leave it is the ones that have the businesses that employ others that you need to worry about leaving.

My view there should be a flat tax on all an individual's or household's revenue (whether capital gains, income, dividends or inheritances) kicking in at specific thresholds with no exemptions, even if it is 40% on anything over 80k

Then people wouldn't sell.

Also I do not see why a buy-to-let owners can deduct any of their mortgage costs from their taxable income

They can't. Even though another business would be able to deduct interest payments on a company loan.

When renters cannot deduct their rent from their taxable income or at least the portion of the rent that is not paid for by housing benefit

If people could deduct rent from their tax bill then you would be also able to deduct mortgage payments. So people would buy a bigger property because their payments would be lower and the rich would get richer and the poor would get poorer

It's certainly not easy. If our aim was a much smaller state and lower taxes people might be a lot happier though and that is what I would support. Self reliance tends to make you more satisfied in life too.

T May is very centrist and like to be taxing people's assets or houses a lot more. She feels fairly high tax to me. She's mooted a 15 year rule (for inheritance tax) rather ahn 7 years, a tax on houses to fund old age care and that kind of thing - basically hitting those who worked for their money with a double whammy whilst those who have pissed it up the wall because the state will provide get as ever patted on the back and encouraged in their idleness and profligracy.

Over 70, over 80, over 100. Yes, they're wealthy. JC included. Yes, they'll be taxed. JC included.

They are not 'the middle class'. Those £80k earners are the fucking upper class who would have the rest of cleaning their toilets and raising their brats if they could.

Some posters here might think £80k makes them perfectly average, but only amongst their own sickeningly wealthy circle. Come down here where the rest of us live.

Saw a benefits programme yesterday where the women on it were receiving tax free £2000 per month. If they were paying income tax and NI then they would be getting gross around £35-40,000. If those on benefits are considered poor and £80,000 is sickeningly wealthy what are the cut off points between working class, middle class upper middle class rich and sickeningly wealthy

Let me guess, a number of kids and adults with disabilities? Everyone says they support disabled people getting help, but it is not really true.

brasty . No