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'?

“what you pay in isn't kept in an account with your name on it for you to take out of in the future”

Astonishing how many people still seem to believe this to be so.

I thought the point of tax was to pay for roads and infrastructure alongside civil service wages and welfare was just one aspect of the overall cost of the country. I didn’t think taxes were collected for the one reason you’ve described.

It can serve such a function- to reduce the disposable income of higher earners so that they would not drive up prices for the masses. In countries with low taxes, there is often very high inequality and this can make life difficult for the middle earners and low earners which means government has to step in further to prevent complete destitution. Its why low taxes only really work in small countries where the government can afford to help the relatively small amount of poor people ( provide subsidized housing a la Singapore) or like in Monaco where basically almost everyone is wealthy. If a rich person earns £100k more untaxed, there is a limit to the number of holidays, fine dining and houses he can buy so this would just drive up the price of essentials that everyone needs esp finite goods like housing. They could also afford to hire poorer people to work full time for them like in Victorian times and this usually leads to poor working conditions for the poor. The problem now is that higher earners are now HENRYS (higher earners not rich yet) and the real wealth is earned through asset ownership. DH and I are in the top 8% of incomes but the only asset we own is the equity in our £415k London flat so we are far from rich! Yet DH is taxed 40% and we would probably not qualify for 30 free hours by the time our future baby turns 3. We have private health insurance so barely use NHS. But i do support the level of tax we have now as the many people in London who earn more than us (£300k and above) would go utterly nuts if they didn't have to pay 45% taxes, we probably couldn't afford to buy property in London if they were allowed free rein.

There’s 1.25 million unemployed. Who are the other 33.75 million made up of, does it include children, students and pensioners ?
Tax threshold in UK is around 12,500 per annum, anyone earning under that will be using services they are not paying taxes for ( roads, doctors etc), even if they’re not directly claiming any benefits.
As they say you can manipulate statistics to support any old load of nonsense, pity that it’s readership and some of the posters on here can’t see that.

You don't even have to "pay in" to be entitled to state pension. You get "credits" when you're unemployed, have young children, or are in low paid work (over the lower threshold but under the threshold for actually paying some NIC).

They are just deliberately whipping up froth, aren't they?

Of that 53%, approx...
25% are retired.
11% are stay at home Mums
8% are disabled and not in work, presumably because they cannot work or cannot fnd a job that will make the right allowances for them

And of the rest, what it doesn't spell out is how low wages mean people who work hard, full time are still having to have help from the government in the form of top up benefits. So almost every low earner would in the % because they amount they get back is likely to be more than the low amount of tax they are due to pay.

That is not a sign of people choosing to be dependent on the state. This is the sign of series of governments that have fundamentally failed in their duty to provide economic stability for all.

Oh, and as others have said, 1 of those included in that % is he Daily Mail's own owner. Twat.

Me too.

I can scarely believe the first page of posts.

Tax is nothing to do with redistributing wealth!
Never has been.

I understand perfectly well how the tax system works. I'm a higher rate tax payer and more than happy with paying 'more' to support those less fortunate.

However, I'm genuinely shocked at the statistic that over half of households get more out than the pay in. I really feel for the people in that situation but astounded there is such a high % of the uk population making more in benefits than what they pay in tax

I presume that's the point of the headline?

@CandlelightGlow
Coming from a country where both culture and people's lives are ruined by socialism, I agree with you.

My husband and I are in the highest tax bracket, and we are happy to contribute to those less fortunate. But it does sometimes bother me that we both work 12 hour days to maintain the high responsibility jobs we have, whereas lower earners often don't have the same levels of stress and crazy relentless hours. But we choose to do the jobs we have.

Maybe instead of castigating people who receive very low salaries, we could tax companies who offer work contracts that necessitate “top ups” from the state…..

Of course the whole point of taxation is to redistribute wealth. We don't live in a communist country!

We pay tax to fund public services. This spans health, education, transport, defence and the welfare state. As the welfare state and the demands on the health service have grown then it becomes harder to fund the other services without increasing taxes. I know MN loves to pretend that taxation of the wealthy is the answer to everything but we already live in a high tax economy where the highest payers receive very little for the amount they put in. The fact that the number of net contributors is reducing is bad news for everyone but the answer isn't to tax that minority even more heavily.

Instead we need to look at the structure of our economy. At things like productivity, innovation and enterprise. High taxation promotes none of these things, but these are the things we need to kickstart our economy. We need to look at Brexit again and the impact this has had on our GDP and labour market. We need to revisit how the welfare system and NHS are structured in the context of our population demographic, the cost of new treatments and our decline as a population into poor health and obesity. We cannot put our head in the sand anymore and hope to tax ourselves out of these problems.

I think that's the main thing - there's a huge number of people in employment who need top ups to survive, because wages aren't keeping up with the cost of living.

If we want fewer people claiming from the state, we need to increase the minimum wage, and put limits on rent costs, etc. But that involves putting people above profits, so that's unlikely to happen any time soon.

Also the amount of money lost through tax avoidance and evasion far exceeds the amount lost to benefit fraud, so maybe crack down on that, maybe? Or alternatively, just let tax dodgers continue to hold high ranking positions in government. Whatevs.

Also I don't believe the WHOLE point in tax is for the higher earners to re-distribute their benefits to the lower/non-earners by way of benefits.

I thought it was also to pay for:
NHS
Police
Fire
Education.....

It's hardly surprising given the gross inequality in incomes in the UK.

I meant the whole point of taxations isn't to redistribute wealth

Well many of them will be pensioners. As am I . My state pension, which of course I contributed to along with my work pension, is applied to my tax free allowance before any other income, I then pay tax on the rest of my pensions according to the criteria laid down by the Treasury. I am not sure what the DM wants me to do , offer to pay more ? Like most other people I also pay council tax, road fund tax, VAT, petrol tax, tax on wine, airport tax and probably a few more that they have sneaked in.

Perhaps I should take up smoking, or just buy a packet of cigarettes a day to make up my shortfall. Or just say thanks to Government ministers who have the wherewithal to pay £5m of tax they forgot to pay due to an oversight, or to the wives of Prime ministers who have graciously waived their non dom status to pay tax in the country where they have lived for a great many years.

Taking out more than they’re putting in…is USING public services that they’ve paid the majority towards, subsidised by the rich.

We have some of the highest taxes in Europe - and under the Tories, who the Daily Mail keeps trying to prop up even while the tax-dodging cabal of crooks smash up the economy around us. I always find it hugely ironic that the Tories claim to be the party of low-tax when in fact taxes are high and they're destroying public services so people have to pay for private services instead - effectively another tax. Meanwhile nobody's had a pay rise since they came into power (apart from politicians and financiers, of course) and the cost of living has massively overtaken wage growth.

The country is screwed until we can kick them out of power.

Scottishgirl85 · Today 10:40
My husband and I are in the highest tax bracket, and we are happy to contribute to those less fortunate. But it does sometimes bother me that we both work 12 hour days to maintain the high responsibility jobs we have, whereas lower earners often don't have the same levels of stress and crazy relentless hours. But we choose to do the jobs we have.“

well quite, you’ve answered your own dilemma there. Work in high responsibility jobs and earn more or work in less responsible jobs and earn less.

I’m just glad we had/have the ability to do the former. Not everyone does, however much they may wish they could improve their lives through work. With high earnings come high taxes. Never bothered me🤷‍♀️

Isn’t the education of children included in that calculation? So my household which receives no benefits (I am higher rate tax payer so don’t claim CB) is not a net contributor because I have two school aged children. I would be most interested to know if over my lifetime I am a net contributor or not. These gross figures really need pulling apart.

The top 10% are largely in that bracket because they are taking a cut of the work done by lower paid people. They can either pay a fair chunk of their wage in tax, which is then given to the lower paid through the government, or reduce their salary to give the lower paid workers sufficient pay rises that they don't need redistribution by the government.

It isn't possible to have a low wage economy and low taxes for high earners. Unless you want to live in Victorian times, of course.

Why do people have an objection to pensions being called benefits?

When I'm a member of an insurance scheme, one of the words that can be used for the payouts I'm entitled to if the right circumstances apply is "benefits". There are long-term sickness insurance policies you can buy which refer to the regular payout you'll receive if you become ill as a "benefit".

Pensions are benefits as much as ESA payouts are benefits. They're both connected to the National Insurance system so they use that bit of insurance lingo.

People are only reluctant to call pensions benefits because we've succeeded in demonising working-age benefits and their recipients to the point that the word itself has somehow come to take on an unofficial meaning that excludes all those respectable, hard-working pensioners getting their well-earned reward for a life's graft.

But they don't in fact receive more than they pay. That would only be true if you add the disclaimer "with regard to income tax". Once you add in consumption taxes, the pictures changes since those are by their very nature regressive: poor households spend a much higher proportion of their income on consumption (no spare cash to save and invest), hence pay out a higher proportion in VAT than high earners.

You don't think people on low wages work long hours and have job stress?! Have you MET a nurse?