How should covid be paid for?

[KenDodd]

I think there should be a small wealth tax (up to 1%) and before anyone starts saying I'm just jealous or whatever, I would be in for thousands of pounds that I don't have and would have to owe. I feel really strongly that we can't just load yet more debt onto the young, they have it much worse than my generation did already (I'm 51).

Yabu - No to wealth tax
Yanbu - Yes to wealth tax

If you vote No, please suggest an alternative that you think would be fairer.

The trouble with that is anyone who owns a house has to find a large cash sum.

Paying £3000 covid tax after spending 9 months on furlough and then redundancy would result in thousands of houses having to go on the market, so prices would drop, people wouldn't be able to sell (who to?) and loads of people would either be unable to pay or out on the streets. And landlords would simply add their tax liability on to people's rent.

The only practical way that I can see is 1% across income tax, corporation tax, capital gains tax and inheritance tax. That spreads it evenly among all who can afford something - retired, working, shareholders, co. directors etc but protects those on very low incomes.

I'm all for asking the wealthiest to pay more, but this isn't the way to do it. Is it really fair to penalize people who either have all their 'wealth' tied up in their only residence or to punish the thrifty who have saved and sacrificed to stay out of debt?

The really rich would find a way to move their wealth offshore where it can't be taxed. THAT's where we should start.

But isn't that the pay off? Most public sector jobs are not well paid in comparison to private sector salaries. For example a friend is a govt lawyer and earns around 50k, she could easily double that in the private sector (and was earning much more but said she wanted to do something she felt was more worthwhile). I also know of senior comms directors in public sector earning a third of the salaries in comparison to the private sector.

I'm not saying you're wrong either, I think in any policy change there will be many that lose out, look at the support for the self employed throughout covid (is it something like 3m who haven't been able to claim, I'm sure they dont want to pay higher taxes when they haven't had any benefit).

@Dillydallyingthrough

But isn't that the pay off? Most public sector jobs are not well paid in comparison to private sector salaries. For example a friend is a govt lawyer and earns around 50k, she could easily double that in the private sector (and was earning much more but said she wanted to do something she felt was more worthwhile). I also know of senior comms directors in public sector earning a third of the salaries in comparison to the private sector.

I'm not saying you're wrong either, I think in any policy change there will be many that lose out, look at the support for the self employed throughout covid (is it something like 3m who haven't been able to claim, I'm sure they dont want to pay higher taxes when they haven't had any benefit).

Lower level jobs in public sector are typically better paid than similar work in private sector. Professional jobs are middling really - yes a qualified "whatever" can get higher wage in a top city job (if they are successful against strong competition) but pretty comparable to bog standard qualified/professional jobs in the regions. There are lots of private sector accountants, lawyers etc in the regions who "could" double or treble their wage if they could get a top job in the city, it's not exclusive to public sector.

@Dillydallyingthrough

But isn't that the pay off? Most public sector jobs are not well paid in comparison to private sector salaries. For example a friend is a govt lawyer and earns around 50k, she could easily double that in the private sector (and was earning much more but said she wanted to do something she felt was more worthwhile). I also know of senior comms directors in public sector earning a third of the salaries in comparison to the private sector.

I'm not saying you're wrong either, I think in any policy change there will be many that lose out, look at the support for the self employed throughout covid (is it something like 3m who haven't been able to claim, I'm sure they dont want to pay higher taxes when they haven't had any benefit).

So much altruism. Nothing at all to do with job security, less stress, shorter hours and better pension schemes? To earn £100k as a lawyer the firm owns a great deal of your spare time

The (in some cases notional) value of the employer pension contribution to public sector is around 20% higher than a good private DC scheme and that’s ignoring deficit funding. That makes a public sector salary 20% better than it looks at first glance.

Jax- yes it is fair when they have so much savings sitting there whilst others are struggling. When it becomes excess money rather than savings to support them in they find themselves in a tricky situation, yes, tax, tax, tax.

Yes. It is fair if they have a multi-million £ property or several of them.

@Averyyounggrandmaofsix

I get the logic of hitting IHT but what then stops people passing in their money before they die? You know like the Queen Mother did.

We already have laws covering that now. There are limits on gifts yes they could be tightened up to include trusts too but it is all doable.

Dilly, yes - no furlough money for sole traders like I am and no self emploed money if you have been honest enough to declare £50k before tax profits either, even though furloughed employees on £1m a year stilol get the £2000 a month furlough money. So I hope those who got furlough help are the ones payuing any more new taxes.

I don't agree the public sector is now worse paid though - that has changed completely. In many areas such as NE where I am from a nurse's salary is masse and many other jobs are minimum wage or £15k a year only. Teachers are the high earners. Even legal aid lawyers can be on £20k in the private sector but £50k if state lawyers. Very very few lawyers are in the big firms earning £100k. So what changed in the last 20 years is public sector workers got inflation pay rises and many private sector workers got cuts never mind annual increases and public sector workers got more and more holiday and maternity pay and sick pay and private sector works on the whole lost all that particularly if we include agency staff and those who freelance at hair dressers, for Serco and all the rest. it has been a sea change which I don't think the public sector understands. Eg I will work until I die (and at 67 have a state pension). My doctor sibling can retire from the NHS at 55 shortly and aims to draw a large pension for 30 years.

don't agree the public sector is now worse paid though - that has changed completely. In many areas such as NE where I am from a nurse's salary is masse and many other jobs are minimum wage or £15k a year only. Teachers are the high earners

So sick of this @Xenia. My dad was born near Hartlepool in 1916 and teachers were the high earners then. Nothing’s changed except that part of the country once had full employment with men earning a living wage down the pits. Now all that’s available are call centre and care assistant jobs.

No nurse’s salary is “massive” anywhere. A band 5 nurse - the majority - is on a maximum of £30.6k seven years after graduating. The starting salary isn’t enough to trigger student loan repayments.

It’s your choice to work until you die. If your sibling chooses to retire at 55 it will be on a reduced pension and they’re an idiot

@VinylDetective

don't agree the public sector is now worse paid though - that has changed completely. In many areas such as NE where I am from a nurse's salary is masse and many other jobs are minimum wage or £15k a year only. Teachers are the high earners

So sick of this @Xenia. My dad was born near Hartlepool in 1916 and teachers were the high earners then. Nothing’s changed except that part of the country once had full employment with men earning a living wage down the pits. Now all that’s available are call centre and care assistant jobs.

No nurse’s salary is “massive” anywhere. A band 5 nurse - the majority - is on a maximum of £30.6k seven years after graduating. The starting salary isn’t enough to trigger student loan repayments.

It’s your choice to work until you die. If your sibling chooses to retire at 55 it will be on a reduced pension and they’re an idiot

A newly qualified accountant in the regions will also be earning too little to pay student loans. Even experienced qualified accountants in the regions can average only £40k or so, which is very comparable with an experienced nurse.

The public sector need to stop comparing themselves with the minority of top City professionals - instead they need to compare with the regions. A teacher or nurse in a typical region is not far different to a bog standard accountant or solicitor in that region.

Went to Oxbridge and know a fair few people who have made a few million, by themselves, as in, not inherited. Quite a few group up quite poor. Not one of them will stay in this country if you take away their savings. Most of them have worked non-stop in City jobs for the last 20 years aiming for early retirement as City lawyers aka partners or bankers. They have given up all time with their kids etc. - they will not get massive pensions. They were saving for that. If you try to tax them again when they have already paid 40-45 per cent tax they will just go and become tax resident somewhere else. It is really that easy. Just as many consultant doctors have stopped working due to pension changes. As long as there are other capitalist societies welcoming these types of people, it would be a loss for everyone if you overtax this lot suddenly.

Even experienced qualified accountants in the regions can average only £40k or so, which is very comparable with an experienced nurse

It’s not, it’s £10k less - I even told you what the maximum a seven year qualified Band 5 gets, which is £30.6k!

Yes, the state workers compare themselves with a tiny uber rich private practice people and it is not a like for like comparison. Also someone saying nurse on £30k is not well paid don't know about the private sector! My son will never earn as much as that - not when he was a post man in teh SE for 3 years nor now as a delivery driver full time South East on about £22k a year.

My sibling's state NHS retirement age is age 55 for full pension. I have no objection to that as we all know what we chose to do but those on the state pay roll have compared to most jobs done very well indeed whislt the private sector has utterly changed in the last 20 years for most people. In the past you took the state's shilling (being lower pay) for the big pension. Now you get more pay than most private sector people plus a big pension and a lot of that is paid for by those who earn less in the private sector. Eg when I started inlaw there was a minimum pay you had to pay trainee lawyers. Now there is none (other than minimum wage). That is just one illustration of pay reduction. For some of the writing I do i was telling my son yesterday for one thing I am paid the same amount (not even inflation rise) as 20 years ago when I started it. For something else I am now paid half ignoring all inflation.

My son will never earn as much as that - not when he was a post man in teh SE for 3 years nor now as a delivery driver full time South East on about £22k a year

Of course he won’t. He doesn’t need a degree to do that and he’s not taking responsibility for life affecting treatments.

Your sibling will categorically not get a full NHS pension at 55 and if he thinks he will he’s going to get a nasty shock when he retires.

We should just tax workers more, increase pension age for everyone under 55, cut wages, reduce working age benefits, implement uni style tuition fees for school, and impose an extra tax on anyone furloughed. Plus a spreader tax on anyone working in high risk industries/ living in crowded accommodation etc. But at all costs we must protect the triple lock and any benefits related to age.

Personally I'd be quite happy to pay extra tax on assets and income if I thought it would be used to support those genuinely in need. As it is, I'd be more inclined to use creative accounting and use the savings to support genuine causes.

Vinyl good point, but he has spent apparently £5k on pensions advice as it is so complicated and I think he will be in the 1995 scheme with age 60 normal retirement and up against the penalty tax if you do over time rules etc and has I think a silver merit award in consultant pay too (and lots of private work as well) so the pensions advice was retire at 55 (5 years early) from the NHS to maximise net receipts in terms of that whole package as far as I was told. Younger people are in later schemes with older retirement ages. The pension of course will be taxed at 45% or 40% anyway so just as with my doctor father's NHS pension 40% went back to the state in tax before you get started on spending it (as he also worked - in his case almost until he died fron his other non NHS medical work)

A very very very small proportion of people own a massive proportion of wealth.

If you accept the basic premise that there is only a finite supply of money, then you should be able to deduce that if the balance tips too far, then it’s difficult for those with less to have enough.

That balance needs to tip back. Unfortunately you need a blunt instrument - which would take a world wide effort - and that is taxation. And flushing out people and places that hide their wealth.

Those who are ultra wealthy do so at the expense of others.

@cultkid I totally agree

So how am I supposed to shield if I have to sell my house to pay a wealth tax?

However you want it paid for the way it will be paid for is by the poor and vulnerable for the next decade or more

yes it is fair when they have so much savings sitting there whilst others are struggling.

And if we went without luxuries and saved to have a decent retirement that we can't currently enjoy due to shielding? We should hand it over to people who haven't bothered to look to the future and save anything?

For the majority of people their main asset is their home. Take the value of your home, deduct any mortgage outstanding and then decide if youd be happy to pay 1% of that.

Say your equity is £100,000 .. how would you feel about paying a lump sum to the government?

It also penalises savers. Take 2 people who both earn £30k .. one puts 5 per cent of monthly income aside, the other spends the lot. Why should the latter be penalised?

I think it would create massive resentment and a lot of those with the real wealth would be off and away.

Tax on income by all means but taxing directly on assets would be a mistake

@Jaxhog of course you should! Don’t be silly - you can’t have any sense of doing the right thing and pay for your own stuff without going into massive debt because otherwise it’s not fair on the person who has been totally reckless, spent their money and now needs a bailout.

On a more serious note, an adequate tax rate is important for provision of services but the simple fact is that this is all about the politics of envy without thinking out the future. For example:

• Between my DS’ family and ours, we spend over £100k on school fees a year. Yes, mental. But that means the kids are not in the public sector using ever decreasing resources to educate our broods as well. Instead, those places in decent states are left for kids who’s parents wouldn’t afford the private system but deserve a decent education.

• When I was having chemo I used private healthcare. I added up the cost of my treatment as the statements came in. Almost £125k in all. Over 4 million people have private healthcare. Let’s say 1% of them have something similar to me (which is a massive underestimation considering the rates of cancer now). That treatment would cost the NHS £5billion. Except it’s not as it’s picked up privately.

• We have savings but own our own business. We would never qualify for help from the state so any drops in business income we have to fund the gap ourselves and rightly so. But that also means no pressure on the state, and yet we will continue to pay our taxes for services we don’t use, put money into the economy and all the rest.

If you took the opportunity to do this away through ever increasing wealth taxes, all you do is reduce incentive for people to ever do the right thing. Instead everyone would just be reliant on an ever bloated state that would increasingly make more and more decisions for all of us as choice got less or less.

@LampGenie, your altruism is overwhelming.

@VinylDetective and your sarcasm contributes little