They’re not ‘top-up’ benefits if you don’t work full-time

[Gobbledegobble]

If people do work full-time, absolutely those wages should be enough to live a decent life and not require outside support, and that requires systemic change (and higher taxation for corporations, closure of tax evasion loopholes and legislation to outlaw poverty wages). I’m a lifelong labour voter and will never vote Tory. BUT working 15, 20 hours a week and bemoaning that you ‘just’ need ‘top-up’ benefits is disingenuous. I couldn’t survive on part-time wages so I work full-time. I ‘top up’ my wages, if you will! But my own efforts. Outside of you or your children having a disability / chronic health need requiring ongoing care, if you can’t afford to live on part-time hours then you can’t afford to work part-time. My partner and I work full time and pay over £1k a month in childcare fees to enable us to do so. Having children does not mean you can’t work until they’re at school and then only school hours, as lots of people seem to think. The cost of childcare is outrageous and again needs systemic change through higher taxation on huge wealth. But it’s not a ‘top-up’ benefit (as if that’s somehow better or more moral than just plain old benefits). Sure I’ll get piled on but I fully support the welfare state and want benefits to be much more generous for when people need them, which should largely be a short-term crisis. Not until the children you chose to have are secondary school age with you being ‘topped up’ by full-time workers’ taxes until then.

Around 43% of people pay NO income tax

If that’s true - can you provide some proof? - just under half the population is trying to exist on less than £12.5k a year. That’s an absolute scandal.

Google it, it’s a well known figure. As reported by tax professionals, economic websites and often thrown around in right leaning papers. You’ll find plenty of proof.

Of course it’s sustainable. It is just a reflection of massive income inequality.

The bottom decile are struggling on sub-12k£ incomes and the top decile can easily afford their income tax bill. The 1% could probably pay much more and not even notice.

It will include a lot of pensioners, students, sick and disabled people, plus their carers. Perfectly natural state of affairs, though tough for those at the bottom in this economy.

I think some people who say these very right wing things, don’t realise that to “correct” the things they’re complaining about, we would need a soviet style society whereby everyone was forced into work and those that couldn’t would be institutionalised.

Well it’s really not. Have you seen how much debt the country is in? Do you think higher earners are recession proof? Should they stop using services to pay more to subsidise others? Leading to job losses. If people don’t pay income tax, it doesn’t mean they are clearing only 12k when all of the UC, DLA, CTB, etc are factored in. Hence the questions in this thread.

A country where nearly half the working population don’t pay income tax is fucked, as we are about to find out. Low wage, high subsidy doesn’t work.

The overall all tax take is one thing. How it’s distributed across the income range is another. It’s blindingly obvious that people with more income should pay more tax.

Iceland has just launched a scheme to lend customers small amounts of credit on a prepaid card to buy their groceries with. There is massive poverty in this country. People aren’t choosing to struggle like that to get out of paying more income tax FFS.

If people don’t pay income tax, it doesn’t mean they are clearing only 12k when all of the UC, DLA, CTB, etc are factored in. Hence the questions in this thread.

Do you have the figures on how many of those 43% are too disabled to work, older people on modest pensions, students, unpaid carers (who save the state fortunes), SAHPs with working spouses, foster caters and so on?

The breakdown would be interesting.

Doesn’t work like that. If you want to be believed you Google it and provide a link. It sounds pretty improbable to me.

It’s all in the IFS reports. It’s mumsnet not uni. The institute of fiscal studies has all the data you require. I don’t care if you believe me, it’s published fact.

So, post a link 🤷‍♀️

Published fact... Note the year.

Also note the actual breakdown in the handy graphic there that includes the 1%

That 1% are earning on average £14k a month.

So at the top there's 300k people earning an average of £14k a month, at the other end there's millions earning so little they don't pay tax...

(14k a month is more than I live on a year)

Apologies. 14k isn't the average of the top 1%
I got that wrong.

To be on the top 1% you have to be earning in excess of 170k a year.
170k a year is 14k a month.
That means that there's 300k people earning over 170k a year so some of them could be earning double, triple, quadruple etc.

Thanks @MoistBandana (nice to see someone understands how it works!). Forgive me for feeling greater sympathy for the 43% than the 1%.

@Whyareyouasking the statistics you have quoted are from the year 2015-2016. It also quotes that this is of the adult population (including those disabled and RETIRED more importantly). And before you say pensions are taxed, many people's pensions are below the threshold of £12.5k per year so will be exempt.

This goes back a few years, and about 3/4 of the way down mentions the cost to the exchequer of the personal tax allowance being raised significantly.

Even with that effect, though, it reports that the top 50% of the population (by income) were providing 78% of collected tax, which doesn’t seem an unreasonable skew, considering how dramatic our income inequality is.

Also discussed is the list tax from the rise in self/employment. (That would include me.) Funnily enough you never see right wingers losing their shit about self employment being allowed to happen.

ifs.org.uk/publications/9178

Wasn’t it Osborne who dramatically increased personal tax allowance? It was hotly debated in the press and also here. A lot of commentators at the time predicted that, far from being a kindness to low income groups, it would be used as a way to criticise them & dehumanise them., and so it has proved.

Calls to increase NMW instead were ignored then. They’ve been repeatedly ignored by successive governments (Brown’s advisers were trying to persuade of the same as an alternative ti introducing tax credits.) All the politicians must appease big business at all costs.

So income tax only accounts for 25% of Treasury receipts, while 22% comes from VAT and fuel tax - which all of us pay. No wonder there was such reluctance to provide the link.

😉

Honestly the madness of thinking “the exchequer needs more dosh, I know let’s go and try to get it from the people who have none!”

Who said that? That’s some jump. We are a low wage, high subsidy economy which is now failing. Tax credits were one of the worst things to happen to this country and it drove down wages across the board. People who pay tax on fuel etc but not income and top up, don’t actually contribute to the economy as they take out more than they put in. People don’t start contributing to the economy until they are paying more than they take out (that’s not sustainable long term in the amounts we are seeing).

The quicker this country gets rid of top-ups, lowers taxes and drives up wages across the board, the better. Then for those that need it, there will be more people contributing because their wages will be higher. PS - I’ve never voted right. I just know this situation is unsustainable and I don’t expect others to pay for my family. I’d rather earn more.

If want to drive up wages (and i absolutely agree we should) the first step is to increase NMW substantially. Then let everyone else negotiate their differentials.

We can’t trust the market to push wages up. We can’t humanely withdraw top-ups and hope employers step up. People are already on the brink.

But high earners are not a charity. They will be paying at least 40% tax on everything they earn if they are PAYE and will be working very long days. Why should someone doing a really hard and stressful job that they may have worked really hard to get and paid lots of money to quality for, subsidise people who work part-time or not at all? Who suddenly decides that because someone is "rich" (this is a completely subjective word) they are obligated to give at least 40% of the fruits of their labour to other people?

Many people with a low income also have low outgoings (for example living in low rent, secure social housing while high earners live often live in very high rent properties or have massive mortgages because they are not entitled to social housing or housing benefit). Which often means in the end, "high" earners are paying out more of their after tax income, percentage-wise, on things like rent/mortgage, council tax etc than low earners who are often heavily subsidised.

What is the point of anyone doing well if it means they are forced to share the fruits of their hard work with everyone else? Nobody would bother. It will just mean eventually people don't work overtime (I know many people who have declined wage rises for longer hours as it means after tax it is not worth it), retire early, drop their hours or move abroad to more favourable tax jurisdictions. That is why there are so many vacancies - because benefits pay more than most minimum wage jobs not to mention the free time. It's unsustainable and unfair when over half of the population is living on the taxes of the remaining net taxpayers.

People ‘earning’ the equivalent of 40k a year through UC, ‘top ups’, child benefit, housing benefit and (huge) contributions towards childcare don’t have no money. All the posts up thread saying £1k for everything outside of rent and childcare isn’t much - what planet do you live on?! My household live on 3k a month, 2.2k of which is rent and childcare and so £800/month for everything else. And that’s 2 adults working full time in far above NMW jobs. Excuse me for not having sympathy for someone working 16 hours or fewer a week and with more disposable cash than me

Apologies, 3.2k a month so we do also have the ‘tight’ £1k a month for everything else, live in the SE and receive no help at all outside of a whopping £87/month child benefit. And we manage to socialise, take our DC swimming and to groups, and (shock horror) also give to charity. £1k/month for costs outside of rent and childcare is not luxury but far, far from poverty too.

Many people with a low income also have low outgoings (for example living in low rent, secure social housing while high earners live often live in very high rent properties or have massive mortgages because they are not entitled to social housing or housing benefit). Which often means in the end, "high" earners are paying out more of their after tax income, percentage-wise, on things like rent/mortgage, council tax etc than low earners who are often heavily subsidised.

You don’t really believe that?

A NNW worker payed the same VAT as everyone else, needs the same basics as everyone else, and even if their housing is somewhat cheaper, those basics take up a far higher proportion of their income than they do for a higher rate tax payer. Most people in the bottom income decile have no discretionary spending power at all.

On top of which, the low paid are forced to sell their labour at below-survivable rates, usually providing a service that the better paid benefit from (care assistants, cleaners, shop workers, porters, bin men, couriers and so on). Which is the very definition of ragged trouser philanthropy.