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.

We will be £212 a year better off (from April), £17 a month.

news.sky.com/story/tax-change-calculator-see-how-much-you-will-save-12703831

Haven't read the other posts - will go back and do so shortly. I feel strongly about this. We are comfortably in the high rate tax band. Slashing the upper rate to 40% will NOT encourage us to spend more - we already spend freely. It will save us approx £30,000 per year which we will save / invest etc rather than spend!

By contrast our postman friend will save just a few hundred per year due to the 1% reduction in the lower rate of tax. How is that fair? He definitely will spend what he gains from tax cuts as he starts with a low disposable income. Tax cuts at the lower end - I'm all for that, but not tax cuts at my end

Snap

Old Etonian bastard
Rishi (Harrow) would not have done this.

Yes, it means I'll still go to the salon / meals / nights out. So I believe it works to an extent

As an investor I can tell you that the markets hate this, and anything invested abroad including America is smashing into the floor. The question is in/competence in a way we could never have dreamt of under Labour.

At this rate, we're heading down Argentina way.

Slashing the upper rate to 40% will NOT encourage us to spend more - we already spend freely. It will save us approx £30,000 per year which we will save / invest etc rather than spend!

Exactly- no one in this bracket is going to start drinking more coffees or whatever. I already drink as many as I want, go out for dinner as much as I want, pay my cleaner very well and for as many hours as I want etc etc. The money would be far more likely to spent in the local economy if it had been aimed at people on lower incomes. I can only think the rationale is ideological rather than actually aimed at helping people or supporting the economy.

This will save us north of £20k. We’re comfortable as we are, have already increased what we pay our cleaner etc, have cut quite a bit of discretionary spending recently less because we couldn’t make the books balance and more because it just feels tasteless to be buying things when there is a cost of living crisis.

We’re already donating more to the Trussell Trust - £150 this week - and will continue to do so.

But the truth is the £20k will go straight to paying down our mortgage because that’s my main focus with the increase in interest rates. It won’t help the economy at all.

I was already furious with Boris’s government but this shower are worse. This budget is literally evil.

It is a few thousand on an £800k purchase unless a 1st purchase - cant imagine it will make a jot of difference to most people

We are trickle down family.

I am going to be very honest, I have reflected on this mini budget and what it means - and how they have come to this decision, and I have reached the conclusion that this is the ONLY thing that is going to work.

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. They have outsourced their personal responsibilities to the state which is paid by the wealth creators. Let us not pretend the bottom group does not exist, then somewhere in the middle we have a lot of people that range from extremely talented and capable, to the bottom rung that really contribute very little but are plodding through life JAM. If we continue to pour in money at the bottom, at some point the wealth creators that can live anywhere in the world, and they are keeping the nation afloat are going to leave - the only thing keeping them here is perhaps the outstanding schools, universities and stability. Without them we are totally totally fucked. No one in this country wants to admit this simple fact. We are powered entirely by the very few, and they have not been represented for a very very long time.

As a society we need to do more to the raise the game across the whole nation. It is not enough to simply languish at the bottom or to let your children fail, we have far too many families that simply do not care about education/attainment/career progression. 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.
The government are not going to be able to overhaul something of this magnitude in the time frame we have to turn our economy around, 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.

The trickle policy is all we have right now, sorry folks.

I love all of the 'we' on this thread

Exactly this ^
As a humble teacher I barely earn 40k a year!

To the people who will be 30k per year better off, how much do you earn?

It won't make any odds. We already give to charity and I volunteer two full days a week. My cleaner and gardener are already paid well. They were paid in full over lockdown etc.
We have bought three of our kids houses and will buy the fourth child a house very soon( they have a mortgage in principal,at a great rate) . All four kids will have benefitted from first time buyers stamp duty savings and all will have benefitted from help to buy isa's. So our cash goes towards our kids futures. We also pay care home fees for my husbands Dad. (It's very expensive) We have Bupa

We've always paid all our taxes. We are minimizing inheritance tax by giving cash to our kids now but once we die there will be a lot of inheritance tax paid back into the countries 'pot'. Very little of our wealth is from property and a lot is from income on which we've already paid tax.

We've paid millions in tax over our working career if that balances things out a little 🤷🏻‍♀️. We are retired now and the 'extra' cash is insignificant in the grand scheme of things.

Both of us are from modest backgrounds. It's my husband who has made almost all the money through being intelligent and hardworking. He is as honest and decent as it's possible to be.

We've always voted labour.

$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*
I allow about 2.5k for a city break for two adults.

Yes, stamp duty is still too high. Ours was £160,000 on our last move, far too much.

Would you not have done this without the tax cut? Genuinely?

Really depends where you’re travelling from. We’d take the train from here (just North of London) and it’s not really dear.

When you go and where you stay!

What kind of activities you do, food you eat…

I am always a surprised by how little some people can spend tbh.

We are in this bracket x2. Honestly, I was thinking slightly about tightening belts to be able to help the kids out but now I won't have to. I am absolutely furious about this. DH and I are properly bewildered as to how this is meant to help.

Go on, spit it out - you want to make some sort of point. Don't be shy - what is it?

when the going gets tough (globally not just locally) the tough get saving.
although warren buffet likes to buy when people are desperate to sell, i'm not in warren buffet territory.
i'm actually cutting back harder.

Thank you for giving us an insight into the warped ideology that is motivating Truss and Kwarteng @Kissingfrogs25

It’s ok, you can voluntarily pay extra tax directly to The Treasury, so there’s no need to worry.

Phew, that’s that sorted then! Storm in a teacup, eh?

Yeah, so can you. So can most of us at one time or another!

Are you going to?

I mean you may not benefitting much from these cuts, but so bet you get a meal deal when you could just as easily make your lunch, or have the odd meal out etc.

Think twice - give it back to the treasury.

Or does this only apply to people paying lots tax already?

Nobody is going to be asking to pay more taxes ! That is a stupid argument ( unless your Paul Heaton , a singer , who did try to pay more apparently)
Most people will probably just donate more to charity or give it to their own family or something similar.