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.

People on 150k will benefit by £2000k, which will probably be easily eaten up.
My (late) husband earned £500k. He supported his ex wife and had four children. I think his benefit of £23k would have gone to the mortgage or into our pensions. He already gave to 8 charities monthly by direct debit.
He was in favour of 50% top taxation.

I am going against the grain here, agreeing with the tax cut. 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. The work-shy category need to be weaned off their entitlement to benefits. People need to motivation to work harder and increase their earning potential. If after working hard at school , gone through years of training, what you get after tax is similar to another person with their part time hours and tax credit, why would anyone aspire to succeed?

No-one is claiming that it does, and none of that has anything to do with the idiotic claim that the rich don’t go to pubs or employ people.

Sounds like a great human and planet loving job! Keep going. We need more of you!

So what good would come out of civil unrest for any government?

What would you like people to eat while going through ‘years of training’?
Is it food?
Because food costs money.
If you have no money, you need a job to get it.
If you are working the job to pay for food, you don’t have time to go through years of training, because you are working. Therefore your circumstances cannot improve.

Unless you think people should get some support while being trained…
But the tories and you both think people should be weaned off support, aka benefits, so money from educational grants is deducted from benefits at a higher rate than earned income, pushing people into jobs, which because they are untrained are lower paid, so shock! They end up topped up by benefits.

By weaning off you mean take them off people which in practice just means make them go hungry.

I’m in Scotland, so the changes don’t impact us. I’m honestly shocked by this and some of the narrative around it.

I hope Scotland doesn’t make the same decision - and it seems they won’t just follow what Westminster has done. It’ll be interesting to see what Scotland does and any divergence. Scotland is currently standing to get an extra £600m over the next couple of years in its grant so I hope we spend this on public services.

Like PPs said it’s no use being a higher earner with shit services and infrastructure. Surely we want everyone to have a good basic income, and to have spending power, not just the richest 1%. It’s great all these mumsnetters earning £200k will now be able to buy more coffee but I’d much prefer everyone had a decent income - why don’t wr tax the richest and reduce taxes for the lower earners?!

@mondaytosunday agree - £2k on a higher salary will be eaten up. Meanwhile as the average energy bill will be capped at £2.5k, imagine what that amount would do for someone who was worrying about paying the bills this year?

@Talkingtocamels That's good to hear from high earners who give a shit about those not in the same league. Kudos to you.

That's phenomenal. 40k is our entire household income.. we both work ft health and education. It'll be nice to get the £25 a month back that I lost in NI. I usually spend that a month on resources for work.

@ImNotHungry there are ways to increase ones earning potential, gone through training, etc without being in the catch 22 situation you described. In asia it is very common for fresh graduates to attend evening master courses. The apprentice winner last year worked in a bank whilst pursuing her degree, whilst the default is party the first year away on loan money. If the people are held entirely responsible for their decision and financial consequence, they may make different life choice, such as, not studying a mickey mouse course, not having a baby at 15.

High earning does not equal hard working and relying on benefits isn't just for the "work-shy". We need nurses, carers, shop workers, porters, cleaners, factory workers, labourers, etc. I know people who work 60 hour weeks and are struggling to afford the basics. You can claim these people should have tried harder in school or whatever other BS you will spout but their jobs are more essential than most.

The point is that that after these tax cuts they don’t go to MORE pubs or employ MORE people which is what the trickle down theory needs for it to work.

Ah yes, of course, silly me. All poor people ever are poor because they studied Mickey Mouse degrees, partied and had babies at 15.

🙄

I'm happy with the tax cut, more say on where all our earnings go.

@Manekinek0 i agree these jobs are essential. If 60 hours cant afford the basic that means the wages need to be raised. At the end of the say, work needs to be rewarding. There are so many people on benefits yet staff shortages everywhere how does that makes sense?

We'll be better off (about to complete on a house) but I'm despairing about this budget and the tax cuts that will benefit me. Whilst yes it's nice in the short term I would much rather the tax cuts benefited low earners. I think it'll be disastrous for the economy and I genuinely can't understand what planet they're on. So angry....our children will suffer and be saddled with debt for decades to come and for what???

@BasicDad Do you have any further information? Am considering retraining for a career change but really don't know where to start or what people mean when they talk about 'tech' in this way...

Wages do need to increase, I don't have a solution and it's complex but higher taxes allowing more investment into the public sector and wage increases seems like part of a solution.

Unemployment rates are low. Not everyone can up their hours. Some people are working around caring for family members which is a far cheaper on the tax payer than the alternative.

Some people aren't suited to certain jobs. Whether that be physically or mentally. We need the right people for the right jobs.

@BasicDad do tell me more what are these courses?

Tories looking after the rich…sod the poor. Now there’s a surprise.

This was totally predictable. People are struggling to feed their children and won’t be able to heat their homes this winter and the tories have decided to give the help to the people of this country that DON’T need it at all! Well happy shopping guys. Everyone else will wait for the crumbs.

This is a fucking disgrace.

What more 'motivation' do you think people need? I'm not sure people realise just how poor the poor are in the UK. The poorest Irish have a standard of living almost 63% higher than the poorest in the UK. That is massive. The lowest earners in the UK have a standard if living 20% weaker than their counterparts in Slovenia.
I'm Irish and I read mumsnet like this a lot. The poverty, deprivation and talk of food banks like it is a totally normal thing is astonishing. How can people be motivated when you have them living in absolute shit? I cannot imagine the pressure some people must be under. It really is shocking that your poor live the way they do in 2022 in what was one thought of as a global superpower. It's disgraceful. They don't need motivation, they need help.

this time next year there’ll be adverts on tv asking people to sponsor a family to help them heat their homes and feed their families. Except it won’t be a third world country needing the support it’ll be a plea to the rich in the uk to help the poor in the uk.
we could all see what way this was heading once food banks were accepted has the norm.
the government turns their back and instead relies on the charity of community to support the most vulnerable.

I don’t think the Pm or MPs should benefit from the tax cut - I think they should have their own rate of 60% so they are then truly serving their constituents

I am just going to call complete bullshit on this. You are living in a parallel universe.

Sure in central London what you say might be partially true. But in the rest of the U.K. it just doesn’t work.

I am highly educated, grew up in Cobham of all places (dubbed the Beverley hills of the UK). I have had everything to achieve and so have my peers from this area. To call us not aspirational is just bullshit. And you know what? All the ones who have high wages work in central and spend the majority on London houses and abroad holidays. My sister is one so I do know exactly what I am talking about. And yes they do contribute to local economy through meals out and drinks etc.

But every single person I know in the rest of the country does not earn 6 figures bar a few with substantial BTL portfolios alongside employment.

I now live in a low income growing midlands town (my partners home town) and our town centre is not going to be kept alive by the handful of people on 150k+ ‘Creating wealth’.

It’s such a shame! We were just turning a corner. We have some of the best restaurants I have ever eaten at recently open. Lots of young businesses and start ups doing really well the last 5 or so years as the low house prices kept proportionately more cash in people’s pockets in this town; when compared to the ‘richer’ and more expensive neighbouring town. I was excited about the improvements we were making as a town and the aspirational energy of the place has been really exciting.

It’s sad. I don’t think the town will continue on the same trajectory. I am not only worrying about our income (small local business owners) but also our general safety. It’s going to get desperate out there and I do think crime will sky rocket. I am just waiting for a break in tbh.