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.

Dp is in this category (just) it won't even cover the rise in utility costs. Meanwhile nothing will benefit me because I'm below income tax (work for a charity

We are a small amount better off by removing this tax band.

We will do nothing different and just and keep it.

It will just be absorbed into general expenditure on our end, which tbf has gone up a lot, just like everyone else’s.

Me? I will just keep more of the state pension I paid in for the best part of 51 years to accrue, you see as a working pensioner my state pension is deducted from my tax-free allowance so I pay more tax on my wages in fact the extra tax I pay (over and above the tax and NI combined I paid when I was working age) equates to a week worth of my state pension, this means I can save more for when I do retire.

We are higher earners not £150k + but certainly more comfortable than most and I'm so angry about todays announcements. I knew that the current cabinet didn't have much of a moral compass (or a clue) but it turns out they have none.
We have already been ramping up our contributions to community banks, food/clothes/money for energy costs because we could see how things were going and although I wish our government would do it properly though taxation I feel it's morally right to help others. I've also donated large amounts of new books to local schools that I know are struggling to provide for students.
We have been trying to spend more in the community rather than using online retailers and I have been volunteering giving free advice on how to save energy (I have qualifications on this through my profession - so. It just generic sound bites but proper tailored advice) because somebody should be doing this stuff.
Have also been helping out my mums council run care home with equipment as they were really struggling with the energy bills/costs/staffing and they are such a brilliant place they really need to remain open.

Interestingly they didnt lift the pension cap which would have been more helpful to PAYE higher earners

Sorry should have said that's every 4 weeks I lose a weeks' worth of pension as I am paid both my wages and my SP every 4 weeks

The problem is that when you give more money to poor people they spend it on essentials like food and energy which helps to increase inflation.

When you give it to rich people the theory is they'll spend it on more luxury goods which should trickle down, and I'm sure it does to a certain extent but not in any meaningful way.

I guess by increasing money available for discretionary spending it keeps restaurants and other leisure venues in business and so their staff remain employed.

I'm no longer a high earner but still very comfortable, may be £1. 5k better off as a household and that won't change our spending at all.

Its possible the bankers bonuse will have a greater effect. When I worked in banking I was amazed that all my colleagues saw their annual bonus as 'free money' which would be frittered away on cars, clothes and holidays rather than as part of their income.

Cant you afford that on the current £10k a month?

No-one is claiming that it does.

My DH is a very high earner, think City of London Finance. He is usually not someone who has compassion for anyone else, but he was shocked. He says he thinks it is really unfair.

As for spending it, no I don't think we will. I've already tightened our belts as I saw costs escalate, and I am the one doing all the shopping etc. I only buy when I need things, am in the process of using up all the things I have got before buying and shopping in cheaper places. I think a bit of it will trickle down, but not a lot.

As for donating it to the HMRC, definitely not. We pay enough tax, and pay for other things ourselves e.g. private education and Bupa and do not take it from the states resources. Also, paying more tax, it doesn't necessarily go straight to those who need it. I'll up my donations to the food bank and any other worthwhile place I support, but I definitely won't be voluntarily throwing it into the pot which goes to everyone but those who need it. If you want to do good, give it directly, not to this Tory shower.

Maybe he couldn’t, how would you know?

Maybe they weren’t going to spend any of their money on any of this stuff at all.

They'll spend it on their extra mortgage payments given the BoE and the Gov now have policies which are directly opposed to each other 🤦‍♀️

It’s not about what they can and can’t afford. Surely you that’s Not the point of this post. It’s about where this extra money would be spent if they didn’t otherwise have it.

In our house, We have a huge savings pot.

The little extra we get (on the removal of tax 45% bit only) won’t make make any real difference to us. But we won’t just be sticking it into our savings - it will get spent.

Not an additional higher rate tax payer not even in the higher rate but my god. They would have been better raising the thresholds to 70k and 200k that would have a bigger impact on spending.

Im in yorkshire. Im sure there are additional rate tax payers but I dont know any and i can only imagine if they do spend more this will be in the south/london and the north will be fcuked

Is there a website into which you type your salaries etc and which then details the savings you will see?

@NonPolitical exactly, not much, but the stamp duty cut will help a fair chunk on an £800k house.

Maybe knowing that those who “benefit” by £40,000 will still be paying over £400,000 in PAYE deductions, which is 46% of their total pay will make you feel less sick.

Exactly how much do you think they should be paying, and how much do you pay?

4 night trip to Edinburgh c.£1000

I'm willing to bet no one on £200k does a 4 night visit to edinburgh for £1k. You will barely get the flights/rail tickets for a family of four for half that and would struggle to get a nice hotel for the rest, before you even start spending money.

Just found a calculator…our house will be £3.5 K better off.

Bloody ridiculous!

What is wrong with you?
She’s giving her figures to you, and you’re calling her a liar.

Why?

Not all high earners are profligate you know.

Our household income is >200k (gross) per annum and we don’t go around spending wildly.

They should have scrapped the personal allowance withdrawal instead. I'm on £22K so it wouldn't benefit me either way but it would benefit more rich people not just the very rich and would make a fairer system.

I'd like them to raise the personal allowance to the full time minimum wage and combine NI and income tax into one tax, but I'd be dreaming there!

There is substantial evidence that trickle down economics does not work.

I'm a high earner but also a single mum with a mortgage, private school fees etc

I'll definitely spend a bit more on stuff I'd usually do myself, like DIY, gardening basically anything that saves me time.

I also always buy British, at least where there is an option to do that.

We will be a grand total of £401 a year better off. While someone earning 160k will be £2719 a year better off. Yeah that makes the 'plebs' like us feel really wanted by this country. We don't claim any UC as we earn over the maximum earnings, and we have a 19 year age gap between our kids as we couldn't afford another one till then. I absolutely despise the tories and everything they stand for. They want the lowest earners literally working until we collapse so the rich just get richer.

Wait, are we not supposed to go ask our local high earner for a few quid? Or is trickle down economics when the rich folk throw us a few shiny coins out of their window and we all have a scrap over them? <sharpens elbows>