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'?

Oh dear someone is feeling bitter and unloved. The "for his (dubiously diagnosed) autistic child" comment is totally uncalled for and out of order.

There’s a name for that too…..communism

Yes.

Lots of people don’t have a clue about tax. Many seem to think money comes from the government (don’t know where they think the government gets it from) and that lots of stuff, like health care and education, is actually free. They feel sorry for people in other countries because operations, drugs and doctors etc. actually cost money abroad. No wonder they worship the nhs for its miraculous free treatment.

This has been achieved through investing in public services through a combination of taxation and economic growth, not through taxation alone.

If the economy grows then there is more money around so taxation levels can stay the same but the government will raise more money as GDP has increased. When the economy is stagnant (or worse contracting) then it is much harder to increase tax revenue. Add to this that more people will be in need of state assistance and you have a pretty terrible situation.

I think British people have been insulated from the realities of global competition and the need to achieve economic growth for so long that it is now seen as the enemy. Business and profit are seen as the enemy of the people when infact it is our best hope of increasing the prosperity of our country and therefore population. We need a strong economy with enterprise and entrepreneurial spirit. We need to incentivise people to start businesses, innovate and be more productive. There has to be some kind of reward for hard work and taking risks, otherwise it just pushes people towards working the minimum and topping up on state benefits.

You rarely see anyone on MN suggest that someone working minimum hours in a job below their capability and topping up on state benefits has any responsibility to further themselves. Instead, it's the system's fault for being set up wrong and encouraging such behaviour. Yet when reform of the system is suggested then it is viewed as an attack on the poor who are dependent on the state through no fault of their own.

Do they include pensions in that? The state pension is a benefit, and by far the biggest chunk of the benefits budget.

People who are on benefits are very often in work as well. It's not like they're sitting around.

wow, 36m. That's a lot of people.

I actually don't think it's a very fair system. Yes, people who earn more should pay more, but given the scale of the issue it seems like they are just propping up a poorly functioning economy. The focus should be on improving wages, education, health and living standards so that less people need quite so much propping up and so everyone can enjoy better services.

I am a net contributor, paying far more tax than what I get in return. I am ok with that generally because I believe in the concept of a welfare state (btw, it's not redstribution of wealth, which is something else). However when I look at my tax bill and then the state of the public economy I sometimes get annoyed. Not at the users of public services, but rather the systemic mismanagement of public finances and resulting awful services. I pay £10s of thousands a year in tax but can't see a GP for example, it's hard not to feel like the cost benefit analysis isn't a good one, and you have to remind yourself of the "wider public good" argument. The issue is when that wider public good doesn't seem to be very good either - I can't get a GP appointment, and children are literally starving down the road. Where is the money going?

I think British people have been insulated from the realities of global competition and the need to achieve economic growth for so long that it is now seen as the enemy. Business and profit are seen as the enemy of the people when infact it is our best hope of increasing the prosperity of our country and therefore population.

This!

You can't be handing a huge amount of your earnings over to the government if you can afford private school for multiple dc. Just saying

I can, because I work in a well paid job, pay the tax it attracts and have enough left over to pay school fees. DH's salary covers the rest of the bills. However, it's getting to the point where it's not worth doing that anymore. If the 20% VAT come in for example, at that point I would question whether DC's school is worth it. I suspect not, so we may well move them to state, I can then quit my job as we won't have to pay fees anymore and we can live off DH's income. And the state both loses my tax contribution and has to pay £14k pa to educate my DC.

Regardless of the ethics around state/private school, the state will be in a net loss position in the above scenario as a direct result of over taxing.

I think I’m worse because I’ve been in poverty myself, and I felt a duty to not be and so made the changes I needed to make.

Me too. That made me more empathetic towards people worse off than me. It’s a shame it didn’t work that way for you.

"I was talking to a man the o week who was determined to stay below a certain income so he could retain the benefits he gets for his (dubiously diagnosed) autistic child, which included an annual holiday.

You do not get a free annual holiday for having an autistic child. My child has been diagnosed for 12 years and we have never had one.
There are charities that offer funding towards holidays for disabled children but you do not need to be on a very low income to qualify.

See, this is why no-one should rely on the awful writers at the Daily Mail for facts. It isn’t half of the whole population, it’s half of the people who receive money from the state, surely?

Bumpitybumper. Good post.

The private school thing is different though. They get the exemption because they qualify as a charity. Despite not really doing anything charitable (except maybe lending out their pool to the local comp 2 hrs a week at a reduced rate, and a couple of bursarys) and are in fact a business. It's not a VAT discount because you save the state in school costs. I have private health insurance, should I get a discount on my NI contributions?

The focus should be on improving wages, education, health and living standards so that less people need quite so much propping up and so everyone can enjoy better services.

The problem is though the bigger the state, the more people come to rely on it and the more propping up they need.

Many posters on here seem to expect the government to intervene in every aspect of their lives like they’re small children. They also expect everything to be free and if it isn’t ‘we’re not taxing the rich enough’.

I agree with this. I see this attitude on here a lot, not wanting to work more as they will only be marginally better off. This attitude needs to change, people should be working and paying for their lives themselves with UC when they really need it, not sitting in UC not taking extra hours. The system really needs to change to stop this being able to happen.

Many posters on here seem to expect the government to intervene in every aspect of their lives like they’re small children. They also expect everything to be free and if it isn’t ‘we’re not taxing the rich enough’.

Absolutely.

Make me pay a one off tax on the value of my pension

Really? When did that start? Of course all your pension contributions are tax free or had you forgotten that?

I’m in the same scenario as Edwinbear…I know from my DC’s school that there are a lot of other families in the same position. I’m also getting to the point where I am tempted to throw the towel in and become a net beneficiary rather than a net contributor. Even more so after reading this thread where apparently other people in the company I work for are propping up my salary. There’s only one person in my company that does my job - ME!! I have no support whatsoever apart from the very occasional IT help desk. I save my company huge sums of money my reducing risk for them. With that comes massive responsibility.

I think it's likely an evil cycle though. People feel disenfranchised. They expect the government to help because they can't get help elsewhere, and they can't get the money to help themselves. I agree that taxing more isn't necessarily the answe,r which is why I said we should focus on improving the situation for those who can't earn a wage they can live on. People want help feeding their kids, because their kids are starving in one of the richest economies in the world. Pay them better so they can feed their own kids and they don't have taht issue.

I would fundamentally disagree with you regarding the purpose of tax. I believe that tax should be gathered to allow governments to provide services that could not easily or practically be financed on an individual basis, such as defence, road building etc I certainly don’t think they should be a means to redistribute money from one group in society to another other than to provide a safety net and support for those unable to support themselves.

It’s been an interesting thread.

Benefits = bad, but pension = good, so pensions are not a benefit (except they are, and included in the figures as a benefit).

Wealth redistribution = bad, but provision of public services = good. Except public services, provided via taking wealth off person A to provide a service to the benefit of person B, are by their nature a redistribution of wealth?

Wookiebowl · Today 11:39
MrsSkylerWhite · Today 11:32
The idea that only higher rate tax payers “work their arses off” is very blinkered.

We are higher rate tax payers. Lots of lower rate/non-tax paying employees work considerably harder than we do. We relied upon them during the pandemic too, as we worked from home.

“The poster said they worked their arse off to get where they are, the vast majority of higher rate tax payers will have indeed worked hard to get a well paid job- more so than someone who works at an entry level job.”

No. we’re in our late 50s and mid-60s. Both born into families in social housing. Free further education and living grants, an abundance of choice when we left and cheap housing, comparative to earnings and an awful lot of people fell into pretty cushy jobs because they were in the right place at the right time. I suppose we worked “hard” - including in the wine bar with clients at lunchtime - to the extent that our abilities made our employers a great deal of money (for which we were well rewarded) but there was nothing terribly taxing (pun not intended) about it.

Working life for our kids is considerably more demanding now. The opportunities that existed when we were young simply don’t any more, regulation in our industry (much needed) put paid to those. Fed up with hearing how lazy and feckless young people are today (not from you, from others). Working life for us when we started out was a blast, as it was for many of our generation. Sadly, lots seem to have forgotten that in the mists of time and remember it as “working their arses off”.

(I think the scenario is different, then and now, for the self-employed high rate tax payers, most of whom did/do indeed work their arses off).

@purpledalmation it might be just my experience but I have found I see less people who just "don't work", than day 10 years ago. Everyone I know who doesn't work has either retired, has disability, or is a stay at home parent but the other partner works. It feels like we are working, harder and harder, doing more overtime, working second jobs, just to keep afloat. But like I say this could just be from my own personal experience and the people I have encountered.

The problem is that now we are living in a country where a PA in a hedge fund (£90k) can earn more than a NHS doctor (£80k). The amount of money out there is stupendous. And few would share in it, as not everyone can work in a hedge fund! The rich would earn millions extra every year (there are people who believe that £300k is the break even income in London when the median salary in London is £41k); and the middle income would get a 5% rise so they would become poorer every year.

If the government does not intervene, no one can and this would mean everyone except the top 3% become poorer. It has gotten to the stage where it is more lucrative to be the door polisher for a hedge fund or bank than to work as a doctor, or civil servant, let alone carer or nurse.

Underhisi

“You do not get a free annual holiday for having an autistic child. My child has been diagnosed for 12 years and we have never had one.
There are charities that offer funding towards holidays for disabled children but you do not need to be on a very low income to qualify.”

Ah, but why let fact get in the way of a good anecdote?