AIBU to think that people with low income generally contribute more to economy than they take

[MagnificentDelurker]

Hi there
l mostly lurk as most of the time what I want to say is said much more eloquently by others. However every once in a while when the question of tax or benefits comes up someone comments as self evident truth that if you pay little or no tax then you are a burden. Some poster a while back went as far as saying unless you are high earner then you are a burden. While these views are challenged, they are not challenged enough.
Today a poster speculated that children of a particular family were likely to become adults on minimum wage and hence a burden. Do we really think that we can have a society full of bankers and lawyers?
Maybe if robots take over but seriously where do people think goods and services come from?

Well employees being paid less contribute to an employer's ability to be rich and thus pay taxes.

And I don't buy it that people using private healthcare/schools cost the country less - the doctors and teachers etc were state trained, using resources funded by the state.

You're conflating two different points, if you're talking about financial contribution to the economy in a financial sense only, low earners are a financial burden in that they use more services than they pay for (not knocking it just the maths). If you're taking about societal contributions of course low earners contribute highly to society; nurses, TAs, fire fighters, refuse collection, the workers who go and unblock fatbergs from the sewers and so on. Then it's down to how you value either/both.

Doesn't consumer spending contribute to keeping the economy going? The IMF suggests that paying low-income families more can boost economic growth.

High earners could conceivably contribute more than low earners in this respect.

The difference being that the high earners you mention are well compensated for their work and aren't looked down on or made to feel like they're somehow not contributing enough.

Sakura7, one thing is who you feel contributes more to society in general and feeling that low earners are not valued and considered a burden, but another thing altogether is the idea that low earners contribute more economically which is where most of us disagree with OP.

And I don't buy it that people using private healthcare/schools cost the country less - the doctors and teachers etc were state trained, using resources funded by the state.

How can it not cost the country less? If I send my 4 kids to private school I'm saving the government 4 x the cost to put a child through school, ditto with private health insurance. My fees/premiums pay the salaries of the teachers/doctors/staff who work there so our taxes don't have to. Surely it doesn't matter whether the doctors and teachers were state trained.

Ill thought op full of nonsense

If you had said society, then they make a contribution but the economy??

I made this point on another thread.
Most teachers/nurses/paramedics/midwives/carers do not earn enough for the higher tax band.
Would anyone seriously like to tell them after they have delivered your child or saved your life or got your dc through Their exams, that they have taken more from society and the economy than they give because they are in the lower tax bands? How do you seriously put a price on their value because of the tax they pay?

What about disabled people who will never work in any kind of paid employment but who do charity work?

What about sahms who bring up excellent families, with their children well adjusted and secure? Who volunteer at playgroups, providing links in society for the community that help new babies and new mums?

Who is anyone to say any one of these people contribute less, because they are in the lower tax bands, or because they don’t pay tax at all.

I appreciate there are some people on life who are just lazy takers, out for anything they can get for nothing, and really are a burden.

But to suggest that this anyone who earns less than £46,000 a year (or whatever the higher tax bracket is, I’m not in it myself!) is a diabolical view point.

Who is anyone to say any one of these people contribute less, because they are in the lower tax bands, or because they don’t pay tax at all.

Anyone with even a basic grasp of maths?

Or are you confusing society and economy?

So keeping people in good health? Educating them? Does nothing for the economy at all does it?

Contributing toward a society where people can live harmoniously and happily, does nothing for the economy?

If you are saying that the contribution of low paid workers to the economy and society should be considered in broader terms than whether they are net contributors to the tax system then you are right. I’m not sure anyone would disagree really. Would they? This thread is about semantics.

On doctors I always wonder about this argument that privat healthcare takes away resources from the NHS - most doctors I know who do private work do it on top of their full time NHS work.

I guess with private GPs it’s different but I believe they are a small proportion of the population.

The thread is about whether or not people who earn less and therefore pay less or no tax are a financial burden.

And I’m saying obviously not.
where would we be without the rubbish collectors for example? Rats running around our streets, disease rife.

How many Young minds does a teacher shape for the future?

Society couldn’t function without most of these people. So obviously I’m saying it goes far beyond basic maths, salary, and tax paid. Whilst it can’t be narrowed down to specifics, anyone with a basic grasp of maths could work out that the cost would be astronomical if these people stopped doing their jobs, from a purely financial perspective and everyone other way possible.

You need to define your terms clearly first OP. What do you mean by «contributes to society»? Do you mean in amounts of tax paid? Or something broader, less definable and harder to quantify?

I work and in a low income so don't pay tax and I'm also a unpaid carer. Unpaid carers save the NHS and social care billions every year. So no I don't really care if I still use services eg NHS as far as I'm concerned my caring role contributes more than a few pound out of my wages.
This is still spent on food etc

The previous poster who provided the link to the Telegraph article also provided the answer to the OP's question in the title. Here is an extract -

*The point at which a household switches from being an overall “taker” to a “giver” is where disposable income, after all taxes and benefits are taken into account, passes a threshold of about £27,000, Smith & Williamson found. This would be where a household’s gross income fell somewhere between £35,000 and £38,000.

At that point a household is receiving benefits and paying taxes to the extent that the two cancel each other out. Above that, more tax is paid than benefits received, and vice versa.*

www.telegraph.co.uk/finance/personalfinance/tax/10638283/How-much-we-give-the-state-in-tax-and-how-much-we-get-back.html

Define low income.

The basic rate of income tax is between just under £12k to £46k.

Are you saying everybody in that band who are not paying higher rate tax are on low income?

With joint household income many in that basic band will have more disposable income than families on one higher or even one higher+1 under £12k.

Yes I agree with you OP, and regarding the economy Vs society; just because we can't measure it very well doesn't mean it isn't a contribution. See what would happen to GDP if there was suddenly a massive shortfall of carers and waiters and cleaners and the price of their labour went up.

I think it's extremely complex. Trying to simplify it down to if you earn X but consume X+n in services is never going to give an accurate and complete result. An individual's contribution to society cannot be measured based on what they pay in taxes or what they consume in public services. An individual's salary is almost never directly related to the societal worth of the job they do or how hard they work. The "economy" is so much more than tax revenues and government expenditure. How An individual benefits from govt spending is extremely complex. Benefits are easy to quantify but what about things like defence and the criminal justice system? These services are ultimitely there to protect British assets and interests both at home and abroad. People with wealth therefore benefit much more from those services than people without but how would you ever measure that benefit in financial terms?

People should chill out. Work hard, live an honest life, love and respect those around you and value people for their hearts and minds not their income and wealth.

The contribution someone makes to society is not limited to the income tax they pay. People on low incomes include teaching assistants, nursery workers, health care assistants and all the lower level posts in the nursing profession, cleaners, shopworkers, hospitality staff. Seriously, society simply would not function without people being willing to do all these roles. It would be impossible in a lot of cases for systems to function properly if it was legislated to force employers to pay higher wages to all - a huge proportion of these low wages are paid from the public purse so taxes would have to rise massively to afford it. Even if that happened, the families with the highest needs wouldn't actually see any improvement in their situation as their benefits would reduce with increased income, meanwhile the biggest winners would be single people still living with parents, whose income would boom. That doesn't seem to be a great decision from a massive increase in public spending.

The net benefit to society from someone becoming a nurse and dedicating their hours of labour to caring for others, and paying only modest income tax, is far far greater than the net benefit of someone who goes into a financial career and pays plenty of tax but doesn't actually contribute anything useful to society.

My best friend has never earned more than 18K a year - she’s now 57. No children and worked constantly since she was 15.
She’ll have paid in a lot more and ‘taken’ out a lot less than some out there due to having no kids.

@thereallochnessmonster per your article £35k is what the household gross income would need to be not what you’d have to earn. Two people earning £17.5k are contributing more in tax than they get in benefits.

I can't say it any better than sossages did, but I'm glad you brought this up, OP. I think you're right about people's assumptions and how wrong they are, especially those saying low-wage workers benefit society but not the economy.
At some point economy and society must intersect. If nobody does the health care and the cooking and the cleaning and the maintenance and the fetching and carrying, the prestigious jobs can't be done because the support system isn't there.
As for the idea that we need wealthy people to provide work:
Wealthy people don't create wealth; they have it. That's not quite the same thing. They may do something useful with it, but they often just do whatever it takes to make more money, such as for example buying up housing stock and renting it at exorbitant prices so that people in full-time work need government payments just to keep a roof over their heads. Not good for the economy.
Or they buy up businesses and strip their assets, leaving lots of unemployed people whose pension funds have vanished. Not good for the economy.
Or they close down manufacturing plants in countries with better employment conditions and send them offshore -- anything to avoid letting their money go out into the wider economy, where it would be spent by the less wealthy and attract VAT.

If they share a household.

It’s not just about income tax. Low earners pay a disproportionately high level of VAT.

What I meant to say they contribute more than they take and no £x in £y out is not the correct measure.

One extreme example ( for making my point and not an argument) : If I had bunch of slaves who worked on my field, kitchen and house and I moaned about how costly their up keep is. After all I have to feed them and clothe them and from time to time look after their health.

Not all low paid jobs are essential and not all high paid jobs are frivolous.
Some people are net contributors in both money and societal benefit And some are contributors in neither, many of us one or the other.

And there are many rich philanthropists, not all are money hogging exploiters.