To think this is the WHOLE POINT of tax?

[wheresmymojo]

Daily Fail are frothing today that higher earners pay more tax, and lower earners get more out in various benefits than they pay in.

I thought even the DF understood that the entire point of tax, it's whole reason for existing, is to re-distribute wealth to some extent with the wealthier paying more so that the less wealthy can benefit from a better standard of living?

Have I missed something - are there people who don't know this is what tax is fundamentally supposed to do?

I mean, I'm being fairly genuine...are there actually people who think it's like a bank account and you 'pay in' to 'get out'?

I am in agreement that the purpose of tax was not actually to redistribute wealth - as in, that was not its original purpose, centuries ago.

But now, in the 2023, I think it is absolutely right to use as a form of wealth distribution. (I say this as someone who is probably a net-payer-in to the "system")

But then I'm also a strong believer in things like having a welfare state, a social safety net, excellent public services and infrastructure - and that all of these things should be funded by the taxpayer.
Also, I'm not, nor ever have been a Conservative voter or a DM reader.

I also thought taxes were to pay for public services. One of those services involves providing a safety net for poorer people but taxes aren’t simply to transfer money from wealthier people to poorer people.

Yes, it's been loaded and loaded and loaded by those who'd like to divide and conquer, and by people who just want to make money by infuriating a certain section of the population.

But the denotative meaning of the word in this context is a payout from a scheme we all pay into. I've screenshotted the relevant OED entry, which mentions the friendly societies/benefit societies that people paid into for this kind of cover before the welfare state.

There's no reason to exclude pensions from this term other than people's reluctance to put pensioners in the same category as those receiving other benefits. Making it clear, again and again, that pensions are a benefit and part of the benefits system might go some way to removing some of the loading that the press have heaped on to the word "benefit".

Society runs on many people contributing.

Exactly. Some people are paid very little to do absolutely essential jobs. Some are paid very well to do jobs that are inessential but create wealth. Most are somewhere in between. The vast majority contribute to society in one way or another.

My problem is with people who earn a lot and pay a lot of tax but think that they don't rely on lower paid workers. We all do.

That's not how taxes work. The people contributing the most are still vastly more wealthy than those who are largely out of taxation because they don't earn enough to get by. There's plenty of incentive for them to go on making tons of money and being massively rich - not least that they can simply set up shell companies and avoid taxes altogether, like most of this Conservative government.

My problem is with people who earn a lot and pay a lot of tax but think that they don't rely on lower paid workers. We all do.

It was a lesson writ large during lockdown. It’s astonishing how quickly people have forgotten.

The amount the state is having to pay to support so many is simply too high to be sustainable. As population is ago g this will get worse. Something has to give. Employers should pay higher wages so people need less top ups. UC is not fit for purpose. If you are single you don't get enough to pay bills, a care leaver gets £61 to pay for gas, electricity, water rates, food, clothing, SIM. Nothing left at all. If you have children you are given more than generous payments. A single parent only working 16 hours a week gets a full weeks pay. It needs to be fairer. People need to be more self sufficient as in the past. There needs to be more social housing.

It was a lesson writ large during lockdown. It’s astonishing how quickly people have forgotten.

Oh I know, @Blossomtoes - I had an almost euphoric hope during that first lockdown that we (society) would finally appreciate the lowest status, lowest paid workers are the people keeping the country going, not their billionaire/millionaire employers, sorry, I mean “wealth creators”. No wonder those bastards wanted us to “get back to normal” as quickly as possible.

@Badbadbunny, where did you get idea that tax exists to redistribute wealth? It is to pay for public services like hospitals, schools and roads.

That is true we depend on each other.

But as most learnt from pandemic you can’t hammer the private sector and expect the public sector to be ok.

Whoever is funding what we need is crucial. Without it very low state funding.

The U.K. can easily lose tax competitiveness for individuals and companies as other countries vie to become attractive.

It’s a balance. No one who is contributing is not needed but look where the tax burden is being paid and don’t reduce that group. Then think about how to use it.

Mavis you do need the tax receipts from the private sector don’t you?

How would you survive funding the public sector if you didn’t get back to normal?

Agree, @Blossomtoes. It's amazing how quickly everyone has forgotten who the essential and key workers are.

The country would not grind to a halt if the hedge fund managers stopped working but if the bin men stopped working, it would quickly become very unpleasant for everyone.

Oh gawd at posters not realising you need tax receipts to run state services

Just have a think for a bit

You haven't answered my question. Would it be fair?

Credit and lending is based on risk. Risk is based on history and ability to make payments. I had a high credit rating even when I was on barely more than min wage. I know high earners with awful credit. Your point is moot.

I don't know who Commander Vimes is but they sound cool.

You're making a lot of assumptions about what has enabled me to do anything.
Equally, I'm paying for the society that allows people do nothing at all, so I don't see how that helps your argument.

where did you get idea that tax exists to redistribute wealth? It is to pay for public services like hospitals, schools and roads.

@caringcarer

Wealth is more than money. A healthy nation with excellent public services is wealthy.

Have they forgotten about national insurance, energy, Vat, tax on fuel, cigarettes, alcohol? The poor actually pay a higher proportion of their income in tax than the better off because of all these unavoidable taxes.

@socialmedia23

There would always be 'poorer people', but there is a big difference between 'poor people' who cannot afford food or heating and 'poor people' who live in subsidized government housing or who own their own houses , who have access to quality education and healthcare so that they have the tools to access better jobs if they wish to.

I'd suggest that those people who cannot afford food get a full time job and take a look at their lifestyle choices. A minimum wage job gets you about £16.5k after taxes (almost £18k after April 2023) Couple up and all of a sudden you're bringing in over £30k easily.

the state of society is such that there is a dwindling middle class. People earn very low incomes and they don't realize it.

Those higher rate taxpayers are the middle class and everybody wants their money because they feel entitled to it.

This statistic that the Daily Fail has just discovered has been around since July 22 and has been raised on previous mumsnet threads eg.
www.mumsnet.com/talk/am_i_being_unreasonable/4681152-median-household-income-higher-rather-than-lower-after-taxes-benefits

The data is not just Income Tax - it includes NI and indirect taxes. The data INCLUDES pensioners and their state pension and pension credit, but excludes children (I think, but am not sure that it includes students). You can ignore the Fail's own derived figure of 36m.

For those that are interested, the data set shows:

Percentage of individuals receiving more in benefits than they pay in taxes:
2021 - ALL 54.2% - Retired 87.6% - Non Retired 47.2% (inc Covid)
2019 - ALL 50.5% - Retired 88.6% - Non Retired 42.6% (pre Covid)
2011 - ALL 52.5% - Retired 88.2% - Non Retired 45.0%
1998 - ALL 41.6% - Retired 84.4% - Non Retired 33.4%

For those commenting on workers needing benefits due to low wages under the tories, note that the "non retired" figure is fairly constant since 2010/11. The massive increase in workers needing benefits occurred under the Blair/Brown Labour administration.

@VivX I was designated a key worker. I work in a bank. Make of that what you will, but we certainly shifted a lot of pandemic loans out the door quickly enough to stop small businesses going bust.

I am sorry but the idea that unless you are in finance, tech or corporate law you are not earning a living wage is absolutely laughable. I have certainly found that those earning 100k plus have a pretty skewed idea of what amounts to essential and I can only guess that @socialmedia23 ia living in some kind of bubble because there are millions of people not working in those sectors and doing just fine.

We are in the top 8% of households only because we live in London and work in financial services. we are a small percentage of the overall UK population because not everyone can live in london/work in financial services.

£30k is not enough to survive when the average rent in the UK is £1000. Worse if there are children. Its not so easy to 'couple up', are you suggesting women should just randomly pick men up on the street as long as they earn a decent wage? £1000 is my mortgage in London and our combined income is well over £100k. I actually think our household income is the break even income in London and anything less is low wage.

I agree! Contrary to popular opinion, I think Inheritance tax is one of the fairer taxes: it’s tax on accumulated wealth you have done nothing to earn. A friend who comes from a v wealthy family actually argues it should be 100% (I don’t agree with that though). His (slightly bonkers?) theory is that inheritance makes rich kids lazy.

also most people won’t pay it - one of the things that’s fascinating is a lot of people who oppose it will never pay it.

There’s a decent argument that inheritance tax should be reformed though. The first problem being that too many ultra rich people find ways to avoid paying it, and the second being that as it’s taxed on estates and not the recipients, there’s the issue that it doesn’t take into account how many recipients there are.

full disclosure: v likely we’ll have to pay it on my parents’ estate one day (since they own a house in London), though I’m one of 3 kids so the sum we receive - while significant - will be split 3 ways. Care costs, of course, might mean the estate is too small for us to pay it all, though

This is a thread that will stick in my memory for years to come.

The sheer number of posters who dont realise, or have forgotten, or who never even knew in the first place.
Or perhaps worse, taught wrongly at school?

Of course you are a key worker.
Imagine if all banks closed their doors?

It means there is something fundamentally wrong in our society when so many people who work hard in good jobs need handouts from the state to survive. Wages should reflect the cost of living, but are massively below where they should be. A different interpretation from the DM article you posted, but the same fundamental problem. It is unsustainable to have a society in which so many people rely on handouts provided by so few. Remember the mega tax payers are not the superrich either. They are the people earning in the low six figures who don't earn enough to make use of all the off shore loopholes that our politicians seem to get away with using. Nadhim Zahawi was in the press this weekend for that.