Trickle down: To ask higher income earners...??

[venusandmars]

Following on from the budget announcements today which disproportionately benefit higher earners (particularly anyone earning over £150,000 pa), if you have a higher income and will therefore benefit from the tax changes, how will this really impact on your spending?

Will you actually spend more on local services (more coffees out in a locally owned cafe)? Will you increase what you pay your window cleaner? Will you donate more to local charities or spend more time volunteering? Will you make voluntary contributions to HMRC? What WILL you do with the extra money?

OK, I know IABU asking people to account for their choices, none of us know the financial pressures that higher earners might be under, but it seems to me that the whole 'trickle down' economic theory is completely flawed. So little of that additional money is going to be seen by lower earners - and almost none to those who cannot work.

I'm not in the +£150K bracket but I have enough when I know others are really struggling. I have increased what I pay my window cleaner. Over the next 4 months I will use my 100% of my energy payment to donate to local foodbanks. It's small stuff, nothing heroic.

I am despairing about the tax announcements today.

Exactly this ^
100% happens, always does.

FFS. 🙄

Look, no one's going to deny that there are some people out there who use benefits as an excuse to avoid getting a job. Those people are a disgrace. But before you insult an entire category of people and make Daily Mail-style overgeneralisations about 'motivation' and the 'work-shy', you might want to bear in mind that there are an awful lot of people who would love to 'work harder' or even to work at all, but who aren't well or physically able enough to do so.

Over the last few years i have many high earning friends migrate to the east, mainly singapore, where the income tax rate is very low.

That is nothing to do with the UK tax system and is Singapore creating a financial centre for the rising Far East. It was happening regardless of taxes and reflects the long term effects of globalisation.

@Kissingfrogs25 Would that be easy for you? Do you have foreign passports that make it easy ? Or are you looking to buy your way in or have very in demand skills? Not trying to be nasty by the way- just curious. We came back from Denmark for family reasons and to be frank remaining there was awkward post Brexit for various reasons - lifestyle though is good- high tax and slightly higher costs than UK, but high services etc . No NI, no council tax. The UK has some great things about it -but in my opinion is only half decent if you can live in a very nice area, earn well and have decent health - very much like the US in many ways.

It’s easier to move almost anywhere with a relocation package - we have been offered many options worldwide.
It boils down to schooling which is an issue as our dc are teens and settled., we can’t deprive them of the great opportunities and universities they have here. We looked at American universities but no one thought they came close to the U.K. experience.
We don’t really want to live in a cultural wilderness or backwater either - we like the history, culture and easy access to European cities.
We have had awful experiences with private American healthcare, so you can’t always assume you can pay for good care. We have had outstanding service in London privately in terms of healthcare.

We have already lived in Singapore and Dubai and found both to be quite boring and soulless.
Anyone that is truly sick and tired of being fleeced here can probably find better options overseas, with attractive tax and lifestyle options - especially if they have young children.
However living long term fairly rootless as an ex pat isn’t for everyone, and this country is favourable in many ways. If we can genuinely deregulate and become unashamedly ambitious then the U.K. may truly end up being the best of all worlds golden

I agree actually. You can have a great life in the U.K. if you are wealthy and Northern European countries have most have more financial equality.

I don’t think many acknowledge that devout equality such as our experience with the Dutch that can hold back ambition and make success a dirty word. Our colleagues are often afraid to book a luxury holiday or buy a new car due to the judgement they experience. Any outward sign of wealth is discouraged, and we found it to be a very limiting almost controlling mindset. No one is allowed to be amazing - they all have to be seen to be the same regardless of income and affluence. As someone who values choice and freedom I didn’t like it very much, but can see the upsides.

It's not just the high earners who will have more money though.
I know middle earners who are struggling currently and have stopped getting takeaways and thinking of stopping the cleaner. A bit more money for them may help the community if they decide to keep the cleaner and can get the odd take away.

We are going to benefit from the tax changes and it doesn't sit right with us and we have spent much of the weekend deciding what to do. For a start we will abandon Amazon. All our spend will be with UK retailers both local and national. We will employ a cleaner. We will pull forward some work we were planning on the house and will use local trades. I need a new car, so that will have to be British built. I will up my donations to food banks and some charities. We work very hard for what we earn, so whilst I don't feel guilty about earnings, I am going to spend very consciously.

We have a sizeable percentage of serious professionals that create the wealth in this country and are paying a huge amount of tax, and we have a very sizeable percentage of uneducated people that are not looking to improve their lives especially as long as they have sky TV and enough for a few pints.

OK then @Kissingfrogs25 what are these 'sizeable' percentages? Because unless you can answer that, this statement is mere opinion and shouldn't be stated as fact.

Has it ever occurred to you, for one thing, that some 'uneducated' people might be so beaten down by their lives that Sky TV and a few pints is all they have to look forward to? And before you say 'they should get more qualifications/better jobs then', that isn't an option for everybody. People's intelligence levels vary and not everyone can aspire to the heights.

They have outsourced their personal responsibilities to the state which is paid by the wealth creators.

Actually, it's paid for to some extent by most of the working population. Yes, those who are highly paid pay more, but your comment makes it sound like the highly paid are singlehandedly bankrolling the welfare/healthcare system.

If we continue to pour in money at the bottom

So what do you want the poor/disabled/unwell, i.e. those who are genuinely unable to work and contribute, to live on then? Fresh air?

I look at countries like Singapore etc, where the expectation is that all children will succeed as a starting point, and you do what it takes as a family to support achievement and ability. The kind of mindset that starts when a child is very young, in some places we just don't have it here. Our benefits system is too generous.

Let's just turn a blind eye to the growing suicide problem (including among children) in Singapore then, shall we?

And as for 'generous' benefits, have you ever tried to live on the pittance that is UC/PIP etc?

so we are going to play to our strengths (with the wealth creators) and hope they can sustain us with our support until the war is over and we have the luxury of looking again at solutions to the poverty cycle/low expectations.

You're calling helping the poor and needy a luxury?? Bloody hell. That tells us an awful lot about you, and not in a good way.

Do you actually consider the remarks you have made in this post to be indicative of a good/moral/admirable value system?

Reading some of the responses on here I really do despair. "Oh I will be better off and what I really want is that money to go to help others... But I won't be spending it or donating any to charity".
In 2020 I had a bumper year during lockdowns and guess what, I spent large proportions of my extra earnings on other small businesses that would otherwise be struggling (restaurants running takeaways etc). Now my eleven year old business is on the bare bones of its arse and all those who are going to be better off are just going to squirrel it away while declaring they don't need it and it's all the Tories fault that they can't spend the extra money. Well stuff you! Don't tell all that will listen that you want this country to be glorious again while doing fuck all to help.
This is why trickle down doesn't work. Give money to the less well off and you can guarantee they will spend it, and often generously.
And as for the person who's going to be £40k a year better off, you buy that property for your child, but there won't be any businesses left for them to get a job with.

ODFOD - direct your anger at Kwarteng and Truss, not those who didn't ask for this and don't want it

Oh, and vote Labour

Hth

Unfortunately there is lots of people who don’t think or feel like you do. Me and my husband are window cleaners and after putting up our prices by £1 a customer this year we had people complain and even had ones cancel us…thankfully though the majority accept the increase and are understanding.

@Kissingfrogs25 Very similar vibe in Denmark- although in all fairness, the airport was always packed!!! Very good though if you had small children (we don't) as offices were deserted at 4pm!! I wouldn't say getting on was discouraged but much harder to tell rich from poor- I always described at as a giant Waitrose. Civilised and clean and polite. The UK is different, it is very much more us and them and dog eat dog which suits many when they are actually the Great Dane but not so much when they are the Jack Russell .

@bringincrazyback

Youve made some very good points in your post but re this:
Actually, it's paid for to some extent by most of the working population. Yes, those who are highly paid pay more, but your comment makes it sound like the highly paid are singlehandedly bankrolling the welfare/healthcare system.

the net contributor income point (when you pay more in tax than you ‘cost’ the state as a citizen) is currently around £40k

So the highly paid ARE bankrolling those systems.
So it’s really quite vital that they (we) keep paying tax to bankroll those system and even more fucking insane that it’s where the big tax cuts have occurred

And you’ll do ALL of this out of your tax windfall..?

can you share what your household income is?

because I’m struggling to believe you can only now afford a cleaner (min £1,500k a year) and a new car (£10k?) which will be paid for out of your new tax gain
And all your other shop local stuff, which is going to cost an extra few grand a year

Because to pay for JUST the cleaner, you need to have a £100k salary

For all the rest of it to come out of your new money, you must be earning a lot more than that?

But if you’ve been pulling in over £150k a year and haven’t yet been able to find £30 a week for a cleaner, your finances must be an absolute mess so I find it very hard to believe this relatively small amount of extra cash will suddenly unlock a lifestyle change for you?

eg why weren’t you able to afford all this extra stuff after a regular annual pay rise?

It seems… implausible

I do believe it @tenbob because some people will be £23k better off annually. Someone we know has said they will be at least £8k better off

@LimitIsUp "Another simple method is through voluntarily overpaying during the filing of a self-assessment tax return where there are options to amend how much one pays. If HMRC deems that you have overpaid you can ask that they do not send you a refund."

It takes 5 mins to google things... of course you can pay more tax if you want!

You can also donate to your local hospital, food bank or endless charities

Lots of people with really high salaries are maxed out with say a massive mortgage, 2 or 3 cars, three kids at private school and two holidays annually

That was to @tenbob . I’ve worked with people spending £20k plus on holidays annually.

If kids board at top schools just the school fees would be £90k annually @tenbob

A lot of my friends fit that description and they all have cleaners

its absolutely nonsense to suggest there are vast swathes of people living with all the trappings of a high income lifestyle except a cleaner and decent car, and this tax cut, which is absolute small change in the grand scheme, is the thing that will make them finally bite the bullet and commit to the trickledown fantasist cliche cleaner

If someone spends £20k on a holiday, it’s because they have a certain standard of living an expectation about how easy life can be when they throw money at the problem. I guarantee they aren’t cleaning their own bathrooms every week and they also won’t have a weird fetish about British made cars like the PP tried to suggest

Hadn’t been expecting anything in the budget as am higher earner (not ridiculously high, just late stage professional career in London).
Actually very relieved though as have become unexpectedly solely financially responsible for my DC recently. I suppose it evens things up a bit compared with families with dual earners at 80-100k each who obviously have shared outgoings and pay a lot less tax, and overall bear less risk (eg if one loses their job, there’s still another income coming in).
With the extra money I might be able to get a cleaner and replace my ancient phone and get my 6yr old car fixed. If there is any left I will save it because I have no cushion at present.

@tenbob you obviously haven’t seen my earlier posts. I don’t agree with these tax cuts. I don’t believe trickledown will occur.

But that said I do know a lot of people who are very HNW but who are totally maxed out. So I believe what the pp has said about themselves re cleaner, car etc. I just don’t think this is the norm!

You’ve got to admit it’s pretty implausible though, surely?

So just to cover the bill for £90k in school fees plus £20k+ in holidays, that is the net pay of a £190k salary

So including housing and cars and living costs etc etc, we are talking about a household income well on excess of £250k

And we are supposed to believe that their are enough families up and down the country on £250k incomes who DONT have cleaners (but really want cleaners) for the government to have written an entire budget designed to give them a little bit of extra cash which will instantly make them go out and employ someone on £15/hr to clean their bathrooms?

And despite having a cleaner being SO low down their priority list for so long, this extra money will definitely be used for a cleaner and not extra school activities or more wine on holiday?

like I said, it seems very implausible for a MN post. For it to be the justification for a government economic intervention is just a flat out lie

@tenbob I think where we differ is that I know while most HNW families would expect to employ and actually have a cleaner some just consistently really overstretch themselves. I’m not saying it’s common, just that I’ve seen it!