To think a national insurance increase is fair?

[postingfortraffichere]

Just that really - who else should pay for social care if we do not collectively pay for it ourselves.

I am highly likely to need care (currently fit and healthy and young but who knows what the future holds) Or someone in my family surely so why shouldn't we pay for it?

People seem to think there is endless money available to cover everything that is wrong with the country and there just isn't.

I feel like those expecting not to pay the cost are being somewhat entitled.

AIBU

@PlanDeRaccordement

Don’t forget the lowest earners are about to lose the £1k they had in UC to help them through the pandemic. They’re struggling enough as it is.

Yes interestingly, the UK government did not increase disabled benefits by £20/week and these are already lower than UC. So the extra £1k unemployed got, disabled did not get. This NI will pay mostly for disabled people of working age. They lost out during the pandemic. And really, the disabled are the poorest in U.K. society not the lowest earners.

This NI plan will give nothing to people with disabilities, it is all going to NHS backlogs.

@PlanDeRaccordement

wealthy pensioners are wealthy, though, and they are paying nothing

They’ll pay an extra 1.25% tax on all dividend income.

Most of them do not get any dividend income, so that'll be 1.25% of nothing.

Even Tories know it is unfair, there's really no defending it. The plan is about protecting their core voters.

I think an increase in taxation to pay for decent social care is perfectly fair. I don't think doing it through NI is. Well off pensioners don't contribute and neither does anyone who's income comes from anything but a job. (e.g. private landlords)

My other issue with it is that it's effectively a cut to school (and NHS?) budgets because of increased staff costs, unless there are proposals to fund those separately.

Do you realise how much you can earn in dividends before you have to pay any tax?

Yes, it is only £2k. Much lower than how much income you need to earn before paying NI (£9k) or Income Tax(£12k).

And what a low rate you pay when you do?
Well if you think rates from 7.5% up to 38.1% are low...well. What can I say? But any rare these rates are all going up by 1.25% just like NI is.

The Tories have lost it with this policy - they are now the party of high AND unfair taxes, which is weird positioning.

It was interesting to watch the big opinion poll shift overnight and some of the editorials have been grim.

@Iann
Most of them do not get any dividend income, so that'll be 1.25% of nothing.

Not true. Most pensioners do have dividend income. 61% of pensioners have investment income, which would be paid in dividends. Most of these are not wealthy but are supplementing the state pension. The average gross income for a pensioner is £548/week before tax.

www.ethnicity-facts-figures.service.gov.uk/work-pay-and-benefits/pay-and-income/pensioner-income/latest

When dead you pay 40% and you think that's not enough?

The IHT threshold is pretty high though. It could potentially be on a sliding scale like Stamp duty or different rates like income tax.

Even Tories know it was unfair, because using NI is unfair.

I think anyone other than a cabinet member or wannabe cabinet member defending the use of NI looks odd!

There is nothing they've achieved through using NI they couldn't have achieved more fairly by using income tax.

@Iann
This NI plan will give nothing to people with disabilities, it is all going to NHS backlogs.

Only for first three years will it go to the NHS backlog which benefits everyone. After that, it will go to social care.

The ‘fairest’ taxes are income based. Also, CGT needs to be taxed at the same rate as income, so wealthy people cannot manipulate how they make money.

Inheritance tax also seems to me very fair. You cannot use your money after you die, and young people instantly becoming wealthy when their parents die seems strange (and hardly ‘fair’).

I don’t like stamp duty. Why should you pay a tax for buying a house? Especially, as you don’t get a tax deduction for selling one. It is a massive tax on divorce (especially in London and the S.E). I am not sure why that is not discussed more. It also reduces social mobility and adds to the plague of constant noisy abs disruptive building works as growing families extend up and down, rather than moving to a more suitable property.

I don’t really understand why care should be free, either. Making it so is basically reducing IHT, allowing more money to be passed on.

What they have done is massively increased taxes on the less well off middle classes, without really affecting the wealthier at all. It is anti aspiration and everything the tories claim to stand for. Could be BJ’s ‘poll tax’…it is b similar in many ways.

@lannistunut

Even Tories know it was unfair, because using NI is unfair.

I think anyone other than a cabinet member or wannabe cabinet member defending the use of NI looks odd!

There is nothing they've achieved through using NI they couldn't have achieved more fairly by using income tax.

I don’t think it is unfair. NI was created as national insurance for health, disability and social care. That’s what that tax is for.

Income tax is to fund everything else

I do not think it is unfair because they’re also increasing dividend tax by same amount. Which will affect the 61% of pensioners who have income in addition to state pension. The law also has the fit and healthy working pensioners paying 1.25% as well.

The ‘fairest’ taxes are income based.

This tax is income based.

In this country people are scared to tax the rich in case they leave for tax havens. I wish I could leave this bloody island!

@PlanDeRaccordement

It is fine for you to choose to portray it as not being unfair, but you are out of line with all sector experts and a significant chunk of the Tory party.

If you look at all the expert the analysis, the consensus is that NI is a less fair way to raise revenue than income tax.

It's just a way of squeezing the already squeezed.

Maybe they should limit how much money you can leave in inheritance. Probably sort out the housing market. Definitely sort out inequality and all the massive problems (that cost a fortune to put sticking plasters on) cause.

YABU. I’m sick of the government giving with one hand and taking with the other. Eg just had a 3% rise (NHS) and now 1.25% of it has gone already 🤷‍♀️ It grates even more to think that so many cheapskates will never even pay into the system and get care yet others will have to sell their home, and most likely will have paid in all their lives.

And they are not raising dividend income by the same 'amount' they are raising it by the same percentage.

The vast bulk of the annual (not liftime for obvious reasons) tax rise is going to land on working people.

@PlanDeRaccordement,

Only if you are in employment.

If you take your income as capital gains (e.g by share buybacks or leaving money in company), you will be paying tax on your earnings at a vastly reduced rate.

[quote PlanDeRaccordement]@Iann
Most of them do not get any dividend income, so that'll be 1.25% of nothing.

Not true. Most pensioners do have dividend income. 61% of pensioners have investment income, which would be paid in dividends. Most of these are not wealthy but are supplementing the state pension. The average gross income for a pensioner is £548/week before tax.

www.ethnicity-facts-figures.service.gov.uk/work-pay-and-benefits/pay-and-income/pensioner-income/latest[/quote]
On average the gross income from investments is £43/week for a pensioner.

Even if that was all paid in dividends - and it's not - it would equate to just £2.95 per YEAR in NI.

@malificent7,

I don’t think they are scared to tax the rich, I think they just don’t want to tax themselves more (how many of the cabinet are worth more than £5 million?) or scare off the donors.

Having said that, there is a real tipping point that you don’t want to go over (look at the 70s). But, right now, most wealthy are bearing a very light tax burden and could afford a bit more with not much more than a shrug.

[quote TheReluctantPhoenix]@PlanDeRaccordement,

Only if you are in employment.

If you take your income as capital gains (e.g by share buybacks or leaving money in company), you will be paying tax on your earnings at a vastly reduced rate.[/quote]
But if you are a pensioner, you would take shares income as dividends to live on. You wouldn’t invest any capital gains back into the shares because you’d be left with no income. That is why they are also taxing dividends an extra 1.25% as this will affect 61% of pensioners and especially the most wealthy pensioners who have investment income.

On average the gross income from investments is £43/week for a pensioner.

Even if that was all paid in dividends - and it's not - it would equate to just £2.95 per YEAR in NI.

hahahaha very generous contirbution!

@PlanDeRaccordement,

Companies will pay lower dividends.

Pensioners will take their income by selling shares instead.

Why do you think so many companies with excess cash do share buy backs rather than pay a special dividend to shareholders?

I'm very, very happy to pay more tax for social care and the NHS. But putting it on NI is deeply unfair. Either raise the upper limit for NI or add it to income tax.

@SofiaMichelle
On average the gross income from investments is £43/week for a pensioner. Even if that was all paid in dividends - and it's not - it would equate to just £2.95 per YEAR in NI.

No, that would be £27.95 per year in NI. Your calculation is off. But the low amount reflects the relative poverty of pensioners. Their gross income is only £548/week most of which is benefits compare that to average earnings of a full time working person of £586/week. Keep in mind, the pensioner weekly income includes benefits, but the full time worker weekly income excludes benefits.