To those on £145,000 plus will you spend or save your tax reduction following the recent budget

[FridayTheThirteeth]

The PM says that giving tax cuts will boost spending and the money will trickle down to the bottom

So if pay the 45% tax will you spend the majority of the tax reduction or save the money.

I think people will save the majority of it.

YABU - they will spend most of it

YANBU - most people will save most of the tax reduction

If he earns that amount he is restricted on what he can pay into his pension and ai suspect he already puts that amount in

DH is a high net worth individual and high earner, I'm a median earner. Tbh we won't really do anything differently so no trickle down at all. We've already paid for a very expensive foreign holiday and DH has ordered a new sports car. We carry on as usual.

The trickle down idea doesn't work. It's an old fashioned theory & the Tories are thick if they really think it'll make a positive difference to the economy.
Roll on next election

In the US, so slightly different, but when the Orange One cut taxes for wealthy individuals, we gave the money to homeless charities and Planned Parenthood.

I'm a bit dim. Why was being in the Top 10 for competitive economies in the world not good enough? Brexit is main reason UK is now in 10-20 zone.

Just use it to overpay the mortgage. The whole thing is utter nonsense.

It is no much for us but it will swallow by the increases of everything. So not room for either saving or spending.

It will go towards the rising costs for everything including school.

3 weeks ago we offered on a house. Today we've had to pull the offer. So what we would have paid in stamp duty and spent on a top to bottom refurb will now be squirrelled away somewhere 😏

Not judging it but it’s just not something I see a lot of

Microblading? You probably see it every single day, especially if you know a lot of monied folk. But the really good work, you won't be able to tell. It's the £100 high Street specials you'll pick out a mile off.

I have my eyebrows microbladed. I'm not a 'slug brow' person and I wear very little make up most of the time. My eyebrows are perfect but natural and you'd never be able to tell I'd had them 'done'.

You know the drop wouldn't be until next April, right? Six months away. The odds of it surviving till then are about nil. If it had taken effect immediately, then it might have done something.

DH is on over 145k.

I earn £120k. We don't spend what we earn as it is, so yup, its just more into the kids savings pots

We will spend. We want to do work on our house so I hope the benefit to us will trickle down as intended.

"Trickle down" economics has been repeatedly proven to be a lie. Even if the lucky few buy a new car or go on an extra holiday it translates into diddly squat for schools and hospitals. Liz Truss is planning on cutting expenditure.

It really depends on where it's spent. If people spend it on fuel instead of tightening the reins, it puts demand up and therefore prices.

Energy for example should have a reduced rate for a certain amount then people who overuse have to pay rack rate.

Thank you .restores my faith in human nature 💕

We've increased the house staff wages in line with inflation so this tax cut will offset these costs a little.
Geeve's is happy with the pay rise and will probably spend it down the local.

For me it's about a £3k saving. But that's easily swallowed up by inflation so I'll not be actively spending nor saving. I will be carrying on as usual, whilst still being cautious because I know that inflation is going to continue so it feels foolish to splash out at this point. The whole thing is mad. They must think we are morons.

Hmm

Unlikely for most due to the million pound cap

Is he a relative of Reginald Jeeves?

For many people it wont really kick in big time until spring 2024 as most FS bonuses are paid in Spring and before April.

Does anyone know how much more take home pay that gives someone who gets paid£150,000 a year?
I'd be really interested to know...

If they're earning 150k then they won't be paying anything at 45%, as it's only above.

Assuming we're talking 150k after salary sacrifice pension, they will get the reduction in NI 1.25% over 9.8k, so £1752.50. Plus the 1% decrease in income tax between £0 (as no personal allowance) and £50,270, which is £507.20.

Total £2,259.70 or £188.31/month.

By virtue of not doing anything differently while everything is getting more expensive, many high earners that fit in the +150k bracket are technically providing more economic stability. It's definitely not trickle down in then growth sense though.

We'll have to see if sterling stabilises a bit more before we can judge if interest rates are going to erode the tax cuts. The economy is in panic mode right now. I think the OBR in November will have a big impact on what happens next.

And let's be clear, it's the ofgem price caps, plus NI reduction, plus standard rate reduction, plus Corp tax increase u-turn...with a sprinkling of additional tax rate scrapping that's got us in this pickle. Hard economic times were always on the horizon.

Scrapping 45% though was definitely poor timing though. A small increase of about 5% to the upper rate limit from 50k to 52.5k would have been a better decision, at the same cost. And probably a much bigger middle class vote winner.

I’ll be saving it as a small offset against the losses my (private) pension has made as a result of the markets’ loss of confidence in this wretched government.

We’ve calculated the saving and will add that to our normal foodbank donation.

We can already basically buy what we want so any extra money would just add to the savings accounts for the kids. So I suppose in 20 years they’d use those to buy houses, but that doesn’t really help the economy now.