To not want my children to pay for tax cuts for the middle-class?

[antelopevalley]

A new policy proposal to increase the ceiling for higher rate tax for individuals has been proposed so that it will only apply once you earn £80k plus. But there seems zero idea of how this will be funded.
Realistically the only way it will be funded is by increased government debt. Debt that my children and others will be working to pay off in the future.
Why should my children and others have to work in the future for tax cuts for the middle class?

Government borrowing should be for investment in the future. Building sources of cheap future energy for the future for example. It should not be used for short term political gains.

[PerfectlyPreservedQuagaarWarrior]

@Elsiebear90

I think it needs to be raised as 50k is really not a lot these days, you would struggle to raise a family on a single income of 50k in most parts of the UK. I work in the NHS (senior clinical role) and I’m close to earning 50k, I’m starting to seriously consider not picking up extra shifts later in the year, as I don’t think it’s worth working overtime for almost half my hourly rate. I also have significant deductions out of my wages for student loan and pension so it’s just not worth it from my point of view. I imagine a lot of middle earners feel the same, so there would be some benefits to society as it would incentivise people to work more.

Lots do yes, although lots also don't. Whenever I've read anything about this in the past it always seemed there was a lot of variation in approaches. Some people take your view, others start from a perspective of I want to have a certain amount of money so if more is taken from me in tax I will work more to make up the difference.

Fwiw DH and I feel as you do. The next level up would take him over 50k and factoring in CB it just wouldn't be worth making any extra effort at this point. The extra could go in a pension I suppose, but at this point in time we'd rather the easier life.

[Ncvisitor]

@Blossomtoes thats not true - it’s not a ‘tiny percentage of estates’ - it’s normal people too that have worked hard and want to leave something to their children and grandchildren. After probably paying the highest tax bracket the majority of their working life.

[PerfectlyPreservedQuagaarWarrior]

@Ncvisitor

@Blossomtoes thats not true - it’s not a ‘tiny percentage of estates’ - it’s normal people too that have worked hard and want to leave something to their children and grandchildren. After probably paying the highest tax bracket the majority of their working life.

Hmm, do you have figures on the highest bracket point? Much of the wealth in the UK is from increased house prices after all. A person who dies and leaves an estate above the threshold now will almost certainly have owned a property and it will almost certainly have increased in value well beyond inflation and the value of any improvements they've made. This isn't an intrinsically pro or anti IHT point btw but I think if we're going to talk about the source of the money that IHT is being paid on it would be good to know more.

[LexMitior]

The interesting thing is that this will only apply to England and Wales, not Scotland. So you would have a choice in Britain as to whether you wanted a more "equal" society and move to Scotland where the higher tax rate is 41 per cent and imposed at £43k. The Scottish Government would have to decide whether to follow, I think.

It will be very popular and Truss will do it.

[Alexandra2001]

Both higher and lower TH's need increasing BUT only when the economy can stand higher Govt borrowing and or better economic growth.

ATM sterling is is free fall and no one will lend to us unless its at super hi interest rates, govt bond yields have doubled and thats not good at all.

[Badbadbunny]

@Ncvisitor

@Blossomtoes thats not true - it’s not a ‘tiny percentage of estates’ - it’s normal people too that have worked hard and want to leave something to their children and grandchildren. After probably paying the highest tax bracket the majority of their working life.

It IS a tiny percentage, according to HMRC only 3.76% of deaths result in a IHT liability - that's tiny!

[steppon]

Is that because people have circumnavigated it though?

[LolaButt]

@antelopevalley

@LolaButt My OP was about not wanting my children to pay for debt being created simply for short-term political gains. It is a terrible way to run an economy.
The British economy is in an increasingly dire state. Our productivity for example is far too low. We need proper investment. That is worth racking debt up for as you get the payback. But debt for tax cuts will make zero difference to our economy and rack up debt that will affect the economy negatively in the future as well. It is making a bad situation worse.

I understand that those who benefit will like the extra money. We all like extra money. But it does nothing for Britain.

It does not even do much for the Conservative Party as so many of their voters are retired and will not have a large enough income to benefit from this. Unless the thought is to effectively buy votes from the working middle-class?

Cool. Appreciate the response. It appears to be a statement of criticism rather than a well thought out plan on an equitable system.

Do you have a proposed plan?

[5128gap]

@Ohdearthatwasntgreatwasit

We have to incentivise people to do better for themselves.

If you want to benefit from this kind of tax cut, be a higher earner. Admittedly for most adults the ship will have sailed by the time they become parents, but the idea is that you drum it into your DC that they need to do better at school, get better jobs etc to be earning at this level.

Excellent. Let's all just tell our children that then! And in the future there will be millions of £80k+ jobs suddenly created out of thin air for everyone who was sufficiently incenticised to want one.
And we won't need any teachers, or carers, or nurses, or social workers, police officers or cleaners or shop workers....Oh yeah, we might actually...but I know! They can earn £80k too! (as long as they worked hard at school, obvs.)
Everyone can be senior, no need for lower paid workers at all, ever again.
It'll be BRILLIANT!

[WulyJmpr]

I for one have no financial incentive to take a more stressful, probably longer hours, supposedly better remunerated job.

So I think this would definitely help my career trajectory and probably wider economic growth.

Also I will need more cash to pay for my private healthcare, private dental, private schools...🙄

[AprilRae91]

It’s disgraceful that LT’s first priority is tax cuts. We need reform not cuts for the well off, and that his government is too corrupt to do it.

[Blossomtoes]

@steppon

Is that because people have circumnavigated it though?

No, it’s because the threshold is £1 million per couple and very few people have that much money.

[Badbadbunny]

@steppon

Is that because people have circumnavigated it though?

More likely that most couples don't leave assets totalling a million pounds or more, which is the threshold for a couple if they leave their estate to each other and then to their children if that includes their family home. No need for fancy planning for those people.

[AprilRae91]

*this

[Capri3]

@Booklover3

The theory that wealth trickles down is all well and good if you are near the top right? A bit like a pyramid scheme…

No, not at all. I live in a London commuter-belt town. Loads of top percent earners keep nannies, gardeners, cleaners, hairdressers, manicurists, beauticians, car valeters, private dentists/doctors and tree surgeons in work. Local takeaways and restaurants are always busy. Lots of extensions and house renovations employing architects, brick layers, tilers, electricians, kitchen fitters, plumbers, floor fitters, carpet fitters. Several private schools, academic tutoring services, tennis coaches, dance schools, swimming instructors etc….

Where do you think that the money comes from to employ all of these people?

[Jiminycricket10]

@5128gap

Excellent. Let's all just tell our children that then! And in the future there will be millions of £80k+ jobs suddenly created out of thin air for everyone who was sufficiently incenticised to want one.
And we won't need any teachers, or carers, or nurses, or social workers, police officers or cleaners or shop workers....Oh yeah, we might actually...but I know! They can earn £80k too! (as long as they worked hard at school, obvs.)
Everyone can be senior, no need for lower paid workers at all, ever again.
It'll be BRILLIANT!

This ^ totally agree @5128gap

My mum did drill it into us to work hard at school, get a degree, value education.

I’m still waiting for the plethora of Yorkshire based companies offering even 40k+ never mind 80k+ that are apparently waiting to reward my hard work as promised...

[Jiminycricket10]

Oh wait I’m not a manager or part of a leadership team, so we ‘can’t afford’ to increase THOSE wages, can we?!
(Btw for the odd poster who thinks the 40k+ bracket includes most essential workers like teacher, nurses and many other important jobs need to take a look at current payscales)

[Capri3]

@steppon

Is that because people have circumnavigated it though?

Some do. Our elderly neighbours gifted their house to their kids 10 years ago. I doubt that the rest of their estate will be over the taxable rate.

[Blossomtoes]

@Capri3

Some do. Our elderly neighbours gifted their house to their kids 10 years ago. I doubt that the rest of their estate will be over the taxable rate.

The £1 million only applies if a house is included. Otherwise it’s £650k per couple.

[steppon]

No, it’s because the threshold is £1 million per couple and very few people have that much money.

I know loads of people who have circumnavigated it. Obviously that's anecdotal but i'm sure I read 1 in 5 over 65s was a millionaire (house, investments, pension).

[Blossomtoes]

Pension pots don’t count for IHT because they can’t form part of an inheritance. Basically it’s property, investments, savings, etc. The one in five figure includes pension pots so it doesn’t extrapolate to IHT liability.

[steppon]

I know pensions aren't included but surely lots of the 1 in 5 have big property wealth as that age group tend to have the houses that has seen huge gains eg my inlaws London home cost about 70k in the 80s & sold for 1.7m.

[steppon]

Ime generally those that are liable do everything in their power to reduce their liability.

[spuddy56]

Surely the threshold has been too low for a long time? Where we live a higher rate tax payer would only just be able to buy a 2 bed basic flat. That seems insane.

[Fraine]

Why should my children and others have to work in the future for tax cuts for the middle class?

Well, why are my taxes paying for your children?