Why wasn't 40pc rate reduced or income tax thresholds raised?

[Indigoo03]

Any opinions?

Because they are spivs grabbing what they can.

They are happy to run the whole place into the ground.

I don’t get this notion of disincentive.
You want more money as a paid worker, surely you have to work for it. Where else does it come from?

Where is the disincentive to be paid more money and take home more even if you move into the higher tax bracket and pay a higher proportion on this bit above the basic threshold?

How else do you incentivise people, what else should be an incentive?

Tory motto is 'kill off the poor and squeeze the middle to make the rich richer'. I can't remember the Latin for it.

I have impression Rishi's plan was to raise the bottom threshold.
That was the plan before today.
But it's so much better to borrow huge amounts of money to give the top 10% £700 more a year, than to give the bottom 10% an extra £700. Gee, I wonder who would be more likely to spend all £700 right away and who might squirrel it away, or spend it on financial advice to avoid paying other tax.

Liz is a lot more to the right than Boris was, more of this shite to come.

There was nothing for those who need it most, i.e. those who don't pay tax or pay little tax. Ridiculous budget.

I'd have thought the 40% bracket were exactly the group Tories do want to keep on side. Or maybe they think those will vote for them regardless?

I can't see any sensible economic reason for any of it, so assume they must think the changes are vote winners.

The top 1% pay 30% of the taxes in this country.

Yet now that there are tax cuts (which btw, I completely disagree with), you don’t want them to see any of it.

So I’m real terms given these tax cuts are happening, you want them to keep paying more.

I don’t think there should be any tax cuts at all right now - but if there are, you can’t just make it so that you continue to redistribute more wealth to the poor!

The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy and they will do what they can to stop paying as much tax (for services they often don’t use so they won’t actually see the problem themselves) or stop paying it altogether; way way worse for those who rely more on the state.

I disagree with the tax cuts, but as
far as PAYE is concerned
in this country, the wealthy more than do their bit.

Sadly I don't think their days are numbered. They should be but they've managed to persuade the poor that Labour will tale all their money and Laboir don't seem to be effective enough in countering that.

I think they're hoping the "uneducated" will just hear tax cuts without realising they don't benefit. That's how stupid they think we are, but sadly they've often been proved right.

How can they benefit from tax cuts if they don’t pay any? How?

Because if they're going out (at the next GE!), they're going out in style... I.e. giving all their mates and hard-core voters a leg up whilst they can.

The tories realised that they relied on BoZo's 'personality' to win the last GE, and after voting her in have realised Lizzie doesn't have one... 😳

Agree. We do seem to be extremely stupid in this country. Brexit and 12 years of Tories. I rest my case.

It's because for some people there comes a point where they don't think it's worth the extra effort of going for the next promotion or working another shift. It's not an issue if you get a pay rise without having to do anything, but if it's about working extra then there's a productivity issue.

There are a few bottlenecks in the British tax system where this happens. The 40% threshold is a particularly live one because that's when child benefit starts being withdrawn too.

As I understand it, attitudes to increased rates of tax and work incentives vary. You get some people who don't care, others who want or need the extra money so they'll do extra work even if they don't get to keep as high a percentage of the increase as they would on their other earnings, and then some who would rather have the time and don't do anything extra at all. I'm in a position to personally assure you that the latter group exist, because my household fall into that bracket.

The top 1% pay 30% of the taxes in this country

They must earn a lot of money then.

And there must also be a lot of people who earn very little

43% adults in the UK pay no tax!
Let that sink in.

www.taxrebateservices.co.uk/is-everybody-paying-income-tax/

Just to remind people.

20% of households now have NEGATIVE discretionary income - at about £60 a week. That's income left to spend on things other then essentials such as bills, housing, food

20% of households have just £7 a week discretionary income and 20% have £68 a week.

corporate.asda.com/media-library/document/asda-income-tracker-september-2022/_proxyDocument?id=00000183-693b-dc2f-adef-fdbfb8160000

Indeed. But you can’t keep redistributing from the rich to the poor.

The rich then stop paying!

These idiotic initiatives (and I don’t agree with them) are tax cuts yet people here saying, but more money should be given to the poor.

So further redistribution of wealth is what’s suggested here, from PAYE workers.

No!

Just no!

The 40% threshold is a particularly live one because that's when child benefit starts being withdrawn too.

Not only that but it means you have to start doing tax returns, which is an adminstrative barrier psychologically for someone who has always had PAYE. I can see why people might opt instead to cut hours rather than take the cash.

It's because for some people there comes a point where they don't think it's worth the extra effort of going for the next promotion or working another shift

Well that’s on them then isn’t it.
You don’t think it’s worth it, fine. But no soy else is going to be giving you any more money, you need to earn it.

Did you read the article?

Firstly, it is important to establish which groups of people are in this category: unemployed, stay-at-home parents, full time carers, homeless and retired. Also, those earners who make less than the Personal Allowance amount of £12,500. There are 43% of our population living on less than £12,500 per year

It would seem that a rising proportion of retirees and the constant increase to the Personal Allowance amount in recent years are the most significant reasons why we have reached such a high percentage of people not paying any income tax.
But this doesn’t mean that this group of people aren’t paying anything to HMRC. It is not a totally straightforward situation.
As reported by the MailOnline, chief executive of the TaxPayers’ Alliance, John O’Connell, said: “The decline in the number of adults who pay income tax is in large part because of more retirees, and the increase in the personal allowance. But too often we are forced to pay for other taxes which we might not even be aware of. From flights to petrol, insurance to fizzy drinks, the government takes a huge proportion of our income, even if your labour isn’t taxed any more. National insurance and income tax should eventually be merged. This will simplify the system and ensure people are more aware of just how much HMRC extracts from

So we have a country where 43%of people don't earn £12,500 a year

Are these taxpayers?

We are talking about the impacts of tax cuts on tax payers.

If they don’t pay tax, their discretionary spend within the context is this discussion, is neither here nor there.

That needs an entirely different approach.

Tories have raised it from £9k to £12.5k in recent years, which had taken many out of tax altogether. Until this year when wage inflation kicked in.

Umm

If you give people with less money, it creates growth, which leads to increased tax take.

You can see that?

It's a reminder of how little money some people have.

Your response to that has just summed you up.

Yes, I read it.

And again, I don’t think these tax cuts are a good idea.

At all.

But the tax cuts weren’t designed to redistribute wealth, they were to give taxpayers more money.

The NI cuts will go some, barely any, way to giving a bit more back.

But you can reasonably expect that with income tax cuts - people who pay tax, and people who pay more tax, Will benefit more.

They should look at VAT tbh, will help poorer people far far more.