To wonder where all the money is going to come from to increase wages?

[girlfriend44]

Genuine question. Re people who are striking for more money.

Where do they think the extra money is going to come from to increase all their wages and how will this keep inflation down?
Can the government really afford to pay everyone more?

It doesn't generally stop them. The decisions are idealogical not practical.

It is just an example to illustrate that you can't think of spending across the economy in the same way as spending in your own household as money circulates. Yes, absolutely agree though, some of it will be spent abroad. Even that holiday to Spain though probably includes a cab to the airport, some clothes bought before you go, etc.

Remind me how much of a hit to the economy we took with Brexit?

Apparently the government can find the money for some things.

It’s a vote winner rather than effective but still an attempt to get people to see Labour as taxing the rich

It won’t raise much and will probably damage a sector so in that sense it’s limited in benefit

But yes they do want to go with that narrative as it’s an easy win, it’s not a conservative talking point but a Labour one by design

Given the latest opinion polls would you agree that Labour's policies certainly seem to be popular at the moment. Current predictions have them headed for the largest majority of any government since Churchill's wartime coalition.

www.electoralcalculus.co.uk/prediction_main.html

I imagine it's going to come from the millions we are saving due to Brexit...😫

Agree but one of the reasons I think this county is in a decline is we produce very little now, we have few natural resources and made most of our riches from pilfering the wealth of the empire.

One of the few ways we make vast amounts of money is via the financial sector but when the government want to allow bigger bonuses etc people are up in arms. We need to keep the people who are generating the country money.

I said earlier in the thread I know of a few ex business owners who are fed up of tax the rich and are heading for a new life in Portugal and are taking their wealth with them.

Exactly this!!!

it does seem bad timing
we are in desperate situation as it is.

Nasty post. You don't know at all what the Government's budget is, what they 'can't' afford. You do know that the Government find money for things they give a shit about. MP's bonuses, war, etc.
You're not especially discerning at all, are you?

Just say you disagree with strikes as you've an 'Im alright Jack' attitude/don't want to be inconvenienced hence prefer workers to put up with shitty pay and conditions to suit you, and go

@SleeplessInEngland this is why this is a great thread, so people can explain it simply to us dullards. I find mumsnet to be a great educator. Why would you be against someone trying to understand? It's commendable.

Not a bottomless pit no, but there are plenty of ways the government could increase revenue without cutting serviceds or increasing tax for the average person, they just have no desire to do so.

For example, the government could change the way they tax dividends so that it is more aligned to other forms of tax (I can't remember the exact figure, I want to say £20-30b, but doing this would raise several billion extra a year at least. However, that would primarily impact tory voters so they'll never touch it.

But to illustrate just how fucked this situation is here's a comparison of two people earn £50,000 p/a (we're going to assume neither pay anything into a pension).

Person A is salaried and pays tax via PAYE. Their tax/take home breakdown is as follows.

Gross: £50,000
NI: £4,491.60
Income tax: £7,486.00
Take home: £38,022.40

Person B earns a salary of £9,100 and receives dividends of £40,900. Their tax / take-home breakdown is as follows.

Gross:£50,000
NI: £0
Income tax: £0
Dividend tax: £3,100.13
Take home: £46,899.87

Despite person b paying no NI they will still qualify for state pension, sickness benefits and other benefits, the burden for paying for which is pushed onto those who are PAYE.

That's just one of the ways the government have set up to fuck over the average person in favour of the elite.

I would like to see them redraw the budget so income - essential expenses (like 1,2,3) = benefits (including pension rises) plus discretionary spending

1.education
2.health
3.security/essential services (armed forces, police, fire etc)

1. Some council spending but instead of town council do it as one national contract.

Things like £20 to see a GP, allowing schools to ask for donations (monthly standing order) could also be used to increase income.

Person B who is getting paid this way would probably own the company so would have paid corporation tax on the 40000 figure so that would take the outcome much closer

We are way below the European average.

Personally I think they should pay key public sector workers much more but get rid of the overly generous and atypical pensions. So the salaries become more comparable to the private sector.

You don’t appear to understand the difference between corporation and income tax.

Person B is not being personally taxed on the profits of the company. The corporate entity is being taxed. Entirely different.

They seem to find the money somehow to give big tax breaks to their pals with big businesses... Maybe they should look in that pocket first

I think I understand, I own a limited company 🤣🤣

Person B owns a ltd company, they take a small wage and decides to take the rest in dividends.

The dividends are drawn from post tax profits so have had corporation tax off.

Overall how much tax would person B have paid on the 50000 he had in his Ltd company.

I know that since the dividend tax was put at 7.5% the perk of being paid via dividends is minimal and certainly not as the example shown

There is no bottomless pit of money. Inflation would also go through the roof of the unions got their way. The government have offered a 5% increase, with more for the lowest paid, which was affordable and reasonable.

I would personally have offered 7.5% to those who worked through the pandemic like nurses and firefighters, with a 4% offer for those who were at home like teachers and civil servants.

Labour have been very clear that they could not fund the pay rises demanded. Inflation is on the way down so I would now be saying to the unions, r “you’ve had your chance, pay freeze it is.”

As others have said -

Close tax law loopholes while allow large scale tax avoidance schemes

Actively investigate and prosecute tax evasion

Reverse the recent tax breaks for high income banks and bankers

Revisit their own expenses which are massively out of step with any other profession

Hmmmm I wonder why they won’t do any of these thing????

Which teachers were at home? I was in school every day of the pandemic!

allowing schools to ask for donations (monthly standing order)

They can do this, if they are careful, and many do. It massively favours schools with an affluent parent base though.

Being a little bit persnickety @LiquoriceAllsort2 , I want the name of your accountant if you pay 7.5% on dividends from your limited company. We pay closer to 20%, after corporation tax.

And before everyone gets het up about how much is paid out to shareholders, do please remember that the largest shareholdings of all are those owned by your and my pension fund. UK pension funds own something like 80+% of all UK public company shares --- so they are looking into the future when you expect to retire. This is not as simple as greedy hedgies zipping up the uninformed. This is very long term financial planning at population level.