Labours Increase in personal tax over £80k

[OliviaPopeRules]

So Labour have finally announced their 'moderate' tax increase for people over £80k.
These changes mean that if you have a household where one person earns £150k you will pay tax of £58k approx. but if you have a household of 2 people earning £75k you will pay total tax of approx. £37k.

I appreciate a lot of people will think tough shit, you earns lot so screw you but can someone really explain to me how this is not just a tax to punish.

And yes I understand people on lower incomes and disability support and other benefits need to more support and I personally have no problem paying extra tax but this makes the tax system so unequal for couples/ families with only 1 person working.

ohforfoxsake Surely we just need an alternative to children going hungry in school holidays, the elderly dying on hospital trollies and seeing mentally ill people homeless on the streets of our big cities?

What we have at the moment is tragic. I can't see how it can get any better if the Tories stay in power.

Voting in a party who have no real concept of modern economics and who seem content to wring the neck of the golden goose in an attempt to (a) pay for this pie in the sky fantasy land they have dreamed up; and (b) be shown to be sticking it to "the rich" is a surefire way to achieve worse than what we have now though.

There is no utopian solution available. No party can deliver such a thing. People seem to be believing the soundbites that if "the rich" get screwed, than the NHS will suddenly be a magical cradle to grave nirvana once more, amongst many other wishful thoughts.

We're in the shit and we need to get out of it as quickly as possible, but it won't be clean and we will all definitely smell the poo before it's over.

That was exactly the point I was making. How the additional tax will make the variance larger for people at the higher level but more broadly the disparity exists for people earning below 80k especially when you take into account losing child benefit.

if someone is already well compensated for the work they do then they should feel ethically obliged to support those who work for the public good and/or need more assistance to lead a healthy and productive life

Except in the case of folk illegally dodging taxes, which obviously should be tackled, surely it's obvious that higher earners already do support all these things - and massively

Even if such people were on the basic tax rate (which they're not) simple maths dictates that 20% of their pay comes to a hell of a lot more than is paid by someone on an average salary

Isn't there are a point where it's worth looking elsewhere for more money ... and isn't a lot of this more about envy than economics?

Back to the centre for policy studies article - I suppose the increase in corporation tax receipts might have been for other reasons than the tax cut - economic growth generally etc. So you can't necessarily extrapolate that cutting corporation tax will lead to higher receipts than increasing it - we just don't know what would have happened if rates had stayed the same. Still, it is an interesting article.

OP please don't presume to tell me who I should be pissed off with.

The problem is that it simply ignores how companies and individuals would react to its proposed changes.

Well no shit.

Add into this that changing economic conditions - both domestic and global - will affect any projections and you arrive at the stunning conclusion that it is very hard to read the future. Human behaviour...changing conditions...

What we do know for a fact is that currently Tory economics is leading to increased debt. Despite heaping the pain on those least able to bear it, a deficit exists. "Austerity" is not working at all.

Now one can shriek "whataboutery" until you are blue in the face....but these are facts.

It is not working.

The extra 5% tax on someone earning £95k is £62 a month. That's a meal out a month sacrificed so someone doesn't have to use a food bank.

Great quote Two4One2017

The country cannot afford to risk upping CT and income tax massively facing Brexit. Possibly the last straw for the banks to act on their exit plans, which believe it or not, actually exists. People who think that the jobs and investments won't go elsewhere is arrogant and ignoring how globalized the world is.

Labour wants to tax the high earners aggressively, and worse, they come about it in a "you are rich, suck it up, you pay" manner. Everything about redistribution of wealth, nothing about creating more wealth. It is not aspirational, and it is hostile.

No I am not saying the Tories are any better. They have been staying quiet so we will see whether TM is really attempting to capture centre ground.

Make it is working. The annual deficit has been gradually reduced. Short of massively increasing taxes and cutting even more they could not have reduced it more quickly. Also they inherited a deficit equal to 65% of GDP, the interest on that debt is a significant part of the annual expense they have to fund.

Would you have preferred more cuts and much higher taxes to get the annual deficit to nil?

I think make just wants everyone else to pay for everything, and be damned grateful for the opportunity!

two4one
Excellent posts.

Unemployment falls again
www.bbc.co.uk/news/business-39945782

but with inflation at 2.7% vs pay running at 2.1% the squeeze is on

I can't believe people think high earners won't leave. Haven't they heard of a brain drain?!

Yes, but at the moment it's just nurses and doctors who are leaving the UK in droves... and that's alright then?

Of course people need to be adequately paid for what they do. And some jobs will attract a higher level of financial compensation.
But the disparity in the UK at the moment is unsustainable.

If some financial services folk choose to move to Switzerland or Abu Dhabi then good luck to them. I think they might find their life there is not all a bed of roses as PP have pointed out.

The extra 5% tax on someone earning £95k is £62 a month. That's a meal out a month sacrificed so someone doesn't have to use a food bank.

In isolation, I agree with your point. But you have to look at the package as a whole. That person earning £95K may not be here, or in a job, if the company they work for changes its behaviour because of the tax changes put on them (plus Brexit impact/uncertainty). Companies that stay will recoup their lost profit margin another way - sack people, reduce their hours, put up prices....there are many options. In the end we will all pay. The richest will be able to absorb the increases, the poorest will suffer disproportionately.

the interest on that debt is a significant part of the annual expense they have to fund.

It is either idiocy or faulty economics to make the debt the centrepiece of policy. The Tories seem to be sadly one or both. They are failing at their own faulted metric.

With historically low interest rates...now is not the time to make a golden calf out of debt. It is a time to roll up the sleeves and work at creating growth.

Again....we can conjecture all we want. But the facts are that after a decade in power, debt is growing. And the deficit still exists. Their measure, not mine.

The extra 5% tax on someone earning £95k is £62 a month. That's a meal out a month sacrificed so someone doesn't have to use a food bank.

Oh no, they are going to leave the country because they can't possibly survice with one less meal out a month.
Anything else than the current Tory induced status quo is unicorns for all and magic money trees!

AndNowItIsSeven The extra 5% tax on someone earning £95k is £62 a month. That's a meal out a month sacrificed so someone doesn't have to use a food bank.

But that is not how it works is it? You won't get 10 people paying that £62 extra off 10 other people's Tesco bill in person, will you.

This emotive way of saying that one section of society is directly taking away money from another is not helping anyone. Person A's income is really nothing to do with Person B - they have no direct claim on Person A's income whether that is £1, £100 or £1million. We don't have one big pot of "income" which someone is taking unfairly from at the direct expense of another person.

As a pp says - Labour wants to tax the high earners aggressively, and worse, they come about it in a "you are rich, suck it up, you pay" manner. Everything about redistribution of wealth, nothing about creating more wealth. It is not aspirational, and it is hostile.

Olivia the national debt has tripled under the Tories.

SeaWitchly

From NHS Confederation website

In 2015, across Hospital and Community Healthcare Services (HCHS) and GP practices, the NHS employed 149,808 doctors, 314,966 qualified nursing staff and health visitors (HCHS), 25,418 midwives, 23,066 GP practice nurses, 146,792 qualified scientific, therapeutic and technical staff, 18,862 qualified ambulance staff and 30,952 managers.
There were 32,467 additional doctors employed in the NHS in 2014 compared to 2004. The number has increased by an annual average of 2.5 per cent over that time.
There were 18,432 more NHS nurses in 2014 compared to ten years earlier. The number has increased by an annual average of 0.5 per cent over that period.
There were 5,729 more GPs and 1,688 more practice nurses employed by GPs in 2014 than ten years earlier.

You can say that with an aging population the Medical profession is complaining about not being able to do their job well. You can also say that the junior doctors are not happy about their pay deal.

But you can't say that "nurses and doctors who are leaving the UK in droves... and that's alright then?"

Where do you get that idea from?

This emotive way of saying that one section of society is directly taking away money from another is not helping anyone.

Exactly how is, "If you raise my taxes even a little I will leave the country!" not emotive?

But sea - it wouldn't have to be a permanent move. Just for a few years until corbyn does the inevitable and is booted out again. Believe me, I know lots of high earners who are looking at the caymans, BVIs, the states, Australia just in case.

And the deficit still exists. Their measure, not mine.

The debt cannot be tackled until the deficit is sorted, you don't seem to understand, and the tories cut the deficit target because of the uncertainty of Brexit, you cannot just keep increasing this and play kick the can down the road.

because of the uncertainty of Brexit

How do you type that without falling over?

No Plan. Not then. Not now.

No plan at all!

Shots perhaps aspiration does not always have to be about creating more wealth for individuals.

Lots of people have 'aspiration' and 'work hard' because they have a cause or can see the greater good in the service they provide for society as a whole..

I have a good friend for example who was highly paid in a corporate role and then went to study as a child therapist for 4 years and now works in private practice but also a regular volunteer role within a primary school in one of the most deprived areas of London.
She can directly see the benefit that her work and that of her team offer these children and this is what motivates and inspires her.
and is very excited about the funding for children's counselling services in primary schools offered within Labour's manifesto.

Exactly how is, "If you raise my taxes even a little I will leave the country!" not emotive?

The argument is a bit more nuanced than that, the reason that argument has come about is because with the Manifesto it has been said that although short term it would provide a boost, there are many factors at play that would cause the "just tax the rich more" not bring in the money required longer term.

People have pointed out the Laffer curve effect, its you who doesn't want to believe it