Page 6 | To think the Tories are clever?

ClassicLib · 2023-03-16T19:25:34+00:00

They are introducing a massive pension tax cuts for their rich mates in the city, and selling it by claiming that it might also persuade a few rich NHS consultants to delay their retirement to their second homes in France for a couple of years. And who is paying for this? Why you & me, of course, because our basic rate & higher rate tax allowances are being frozen until 2028. This is actually a massive income tax increase for ordinary working people, of course. And the media have fallen for their spin. That’s smart politics…

anyolddinosaur · 17/03/2023 13:07

Tories are crafty rather than clever.

The arguments are boring. It is possible to detest Starmer's weakness in dealing with the safety of women and children and still detest the Tories. Many of us are politically homeless as a result.

ThreeFeetTall · 17/03/2023 13:13

ScruffyGiraffes · 17/03/2023 12:57

Are you sure those figures are correct? I think it is 40K going up to 100K

No. For high earners the max pension contribution per year is rising from £4k to £10k. For everyone else it's increasing from £40k to £60k.

I think it's not a max contribution though? You can contribute more than £4k /£10k

ScruffyGiraffes · 17/03/2023 13:20

@ThreeFeetTall you can but would be taxed on the contribution, then taxed again as you withdraw it in retirement, so no point. You'd take it as net pay and invest the post tax money instead.

Mia85 · 17/03/2023 13:23

Yes that't right you can put more in but will be subject to a tax charge and then the money will be taxed again on the way out. There are some people who might still want to do this e.g. if they have generous employer contributions or (like the drs) it is a binary choice of making high contributions or leaving the scheme. But it it is generally very unattractive to pay double tax in order to tie your money up and make it subject to government whims.

Emotionalstorm · 17/03/2023 13:56

ThreeFeetTall · 17/03/2023 12:03

Do you pay inheritance tax on a pension pot though? (I think if in a SIPP then free of inheritance tax?)

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Depends on if it's a discretionary trust.

astarsheis · 17/03/2023 14:04

Clever at what? Oh I know...being lying fucking bastards

HRTQueen · 17/03/2023 14:08

They are savvy at winning voters over and election campaigns which they have made a start on

why do you think they are the most successful political party in history

lazycats · 17/03/2023 14:15

HRTQueen · 17/03/2023 14:08

They are savvy at winning voters over and election campaigns which they have made a start on

why do you think they are the most successful political party in history

Yes, they've finally decided to notice the dreadful polling of the last year and a half. Problem is that all the immigration tough talk and recent Budget has done fuck all to change that so far. The numbers have barely moved.

HRTQueen · 17/03/2023 14:20

problem for Labour is one Voters are not warming to Starmer, two the Tories in recent years have decreased taxes/increased support which is a vote winner usually for Labour

Its not a done deal for Labour they need to be careful

lazycats · 17/03/2023 14:22

HRTQueen · 17/03/2023 14:20

problem for Labour is one Voters are not warming to Starmer, two the Tories in recent years have decreased taxes/increased support which is a vote winner usually for Labour

Its not a done deal for Labour they need to be careful

Starmer personal polling is better than Sunak's. It's become a cliche that voters don't like Starmer but that isn't how British elections are won and lost. It's not a presidency, and if it was the tories would still be in trouble.

jgw1 · 17/03/2023 14:27

HRTQueen · 17/03/2023 14:20

problem for Labour is one Voters are not warming to Starmer, two the Tories in recent years have decreased taxes/increased support which is a vote winner usually for Labour

Its not a done deal for Labour they need to be careful

It may not be a done deal, but the polling is pretty positive for Labour.

www.markpack.org.uk/155623/voting-intention-opinion-poll-scorecard/

And as for Starmer, those well known left wing blob wokeratis at yougov tell us this.

yougov.co.uk/topics/politics/articles-reports/2022/10/24/mrp-starmer-wins-best-prime-minister-389-seats-sun

GertrudeBell · 17/03/2023 14:29

It’s not quite as black and white as the tories favouring the rich. By encouraging high earners to stay in work, the government is also receiving around 50% tax on those earnings. I assume that there will be a net benefit to the economy.

Yes someone earning £500k won’t be taxed on the first £1.8m of their pension pot, but for each year they stay in work in order to contribute to that pot they’ll be paying tax and NI of around £230k per year.

Also agreed that I cannot vote for parties who do not know what a woman is.

jgw1 · 17/03/2023 14:34

GertrudeBell · 17/03/2023 14:29

It’s not quite as black and white as the tories favouring the rich. By encouraging high earners to stay in work, the government is also receiving around 50% tax on those earnings. I assume that there will be a net benefit to the economy.

Yes someone earning £500k won’t be taxed on the first £1.8m of their pension pot, but for each year they stay in work in order to contribute to that pot they’ll be paying tax and NI of around £230k per year.

Also agreed that I cannot vote for parties who do not know what a woman is.

I think perhaps at this point it is worth pointing out that someone who earns £100,000 a year on average pays a smaller proportion of their income as tax than someone who earns £20,000, and I don't see that any of the proposed changes address this.

ScruffyGiraffes · 17/03/2023 14:51

GertrudeBell · 17/03/2023 14:29

It’s not quite as black and white as the tories favouring the rich. By encouraging high earners to stay in work, the government is also receiving around 50% tax on those earnings. I assume that there will be a net benefit to the economy.

Yes someone earning £500k won’t be taxed on the first £1.8m of their pension pot, but for each year they stay in work in order to contribute to that pot they’ll be paying tax and NI of around £230k per year.

Also agreed that I cannot vote for parties who do not know what a woman is.

Yes. And the same applies further down the income scale. It's madness to start penalising people so heavily with tax that they cut down hours/ refuse promotions as soon as they reach the earnings level where they become net contributers. If your salary reaches £50k and you have a student loan and children you end up with an effective tax rate of over 65%. If your salary reaches £100k then your effective tax rate is over 100%! Hardly an incentive to get those who pay a lot of tax to work more.

Hunt even commissioned research on this and people told him exactly what the problem was, but what he's done in this budget has actually made this problem worse, and no changes to the tax code to fix it. Madness.

www.thetimes.co.uk/article/pay-increase-will-leave-high-earners-worse-off-on-childcare-support-s5xm2dzhg

amp.theguardian.com/business/2023/feb/13/full-time-part-time-work-no-longer-pays-uk-economy

www.ft.com/content/ce2c232b-e340-4075-9899-8fad0d624f7e

GertrudeBell · 17/03/2023 14:55

jgw1 · 17/03/2023 14:34

I think perhaps at this point it is worth pointing out that someone who earns £100,000 a year on average pays a smaller proportion of their income as tax than someone who earns £20,000, and I don't see that any of the proposed changes address this.

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I don’t think that’s right @jgw1.

Someone who earns £20k pa will pay around £2.4k in tax (ie 12%). Someone earning £100k pa will pay around £34k in tax (ie 34%) for exactly the same public services.

Even if it were the other way around, why do you think proportionality the solution? Or better for the economy? Why is it fair for the higher earner to be stigmatised for their income (as happens often on MN) when they are contributing 14x as much to the economy as the person on £20k?

Leaving aside any personal distaste for wealth, it is the practical reality that if you tax higher earners more you risk them stopping work early and then you lose their direct contribution to public services. And you also lose their spending power - whilst you might think it is unfair that they have a more luxurious lifestyle it is undoubtedly better to have people spending money in shops, cars, restaurants, construction projects and nannies than for them to be less well off and spend less.

That is what has been happening with a lot of early retirements and the changes to the pension pot tax allowance are designed to encourage high earners back to work to avoid this. The answer is for the economy to grow and everyone to earn more than to penalise high earners further and stultify growth.

However the party political nature of the discourse masks the economic argument in favour of “all tories are evil” and risks people voting for opposing policies which are to their financial detriment.

(NB I am a lifelong Labour voter but can no longer support them for a combination of their economic policies and position on women’s rights).

jgw1 · 17/03/2023 15:04

GertrudeBell · 17/03/2023 14:55

I don’t think that’s right @jgw1.

Someone who earns £20k pa will pay around £2.4k in tax (ie 12%). Someone earning £100k pa will pay around £34k in tax (ie 34%) for exactly the same public services.

Even if it were the other way around, why do you think proportionality the solution? Or better for the economy? Why is it fair for the higher earner to be stigmatised for their income (as happens often on MN) when they are contributing 14x as much to the economy as the person on £20k?

Leaving aside any personal distaste for wealth, it is the practical reality that if you tax higher earners more you risk them stopping work early and then you lose their direct contribution to public services. And you also lose their spending power - whilst you might think it is unfair that they have a more luxurious lifestyle it is undoubtedly better to have people spending money in shops, cars, restaurants, construction projects and nannies than for them to be less well off and spend less.

That is what has been happening with a lot of early retirements and the changes to the pension pot tax allowance are designed to encourage high earners back to work to avoid this. The answer is for the economy to grow and everyone to earn more than to penalise high earners further and stultify growth.

However the party political nature of the discourse masks the economic argument in favour of “all tories are evil” and risks people voting for opposing policies which are to their financial detriment.

(NB I am a lifelong Labour voter but can no longer support them for a combination of their economic policies and position on women’s rights).

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How have you made your calculations?

There is more than one kind of tax in the UK and overall they are regressive.

Notonthestairs · 17/03/2023 15:06

I think tax arrangements for the highest paid are a lot more complex than people are acknowledging and it depends on how you are getting paid -

Using anonymised data from personal tax returns, we show that in 2015-16 the average rate of tax paid by people who received one million pounds in taxable income and gains was just 35 per cent: the same as someone earning £100,000. But one in four of these paid 45 per cent – close to the top rate – whilst another quarter paid less than 30 per cent overall. One in ten paid just 11 per cent—the same as someone earning £15,000. The rich, it seems, are not all in it together.
www.lse.ac.uk/research/research-for-the-world/economics/how-much-tax-do-the-rich-really-pay

jgw1 · 17/03/2023 15:07

Even if it were the other way around, why do you think proportionality the solution? Or better for the economy? Why is it fair for the higher earner to be stigmatised for their income (as happens often on MN) when they are contributing 14x as much to the economy as the person on £20k?

One salary of 280,000 or 14 salaries of 20,000. Those on lower incomes are more likely to spend their money in the local economy therefore benefiting everyone.

GertrudeBell · 17/03/2023 15:16

I’ve quoted the figures from the HMRC calculator.

Tax on £20k pa
Tax on £100k pa

I’m sure there are more complex tax structures, but you were originally talking in general principles. It was wrong to say as a general proposition that someone earning £100k pays a lower proportion of their income than someone on £20k.

jgw1 · 17/03/2023 15:21

GertrudeBell · 17/03/2023 15:16

I’ve quoted the figures from the HMRC calculator.

Tax on £20k pa
Tax on £100k pa

I’m sure there are more complex tax structures, but you were originally talking in general principles. It was wrong to say as a general proposition that someone earning £100k pays a lower proportion of their income than someone on £20k.

That is only about income tax, there are other forms of taxes, which disproportionately are paid by the less well off.

GertrudeBell · 17/03/2023 15:23

jgw1 · 17/03/2023 15:07

Even if it were the other way around, why do you think proportionality the solution? Or better for the economy? Why is it fair for the higher earner to be stigmatised for their income (as happens often on MN) when they are contributing 14x as much to the economy as the person on £20k?

One salary of 280,000 or 14 salaries of 20,000. Those on lower incomes are more likely to spend their money in the local economy therefore benefiting everyone.

Do you have a basis for that?

And in any event I thought you were talking about someone on £100k? They’re not all private jets and luxury goods - more likely like the rest of us that they’re paying for mortgages, childcare and ASDA.

GertrudeBell · 17/03/2023 15:24

jgw1 · 17/03/2023 15:21

That is only about income tax, there are other forms of taxes, which disproportionately are paid by the less well off.

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Ah, ok. What other taxes are paid disproportionately by someone on £20k than someone on £100k?

HRTQueen · 17/03/2023 15:32

We don’t vote for leaders. Really?

I don’t believe those that many who voted for Margaret Thatcher or Boris Johnson were voting on policies (though get Brexit done was obviously popular slogan that won voters over) they felt they would be good leaders and Tony Blair

we do vote for personalities Corbyn had a cult like following that increased Labour votes

many people have no idea who there local MP is and the majority are only interested in politics once there is an election

I’ve been to local Labour Party meetings Starmer is not connecting with voters they way I would like to see it is something being heard over and over again luckily he isn’t up against such a big personality now but Labour should be winning on their policies their party leader not because people are fed up of the Tories as this can change

jgw1 · 17/03/2023 15:35

GertrudeBell · 17/03/2023 15:23

Do you have a basis for that?

And in any event I thought you were talking about someone on £100k? They’re not all private jets and luxury goods - more likely like the rest of us that they’re paying for mortgages, childcare and ASDA.

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Do you think someone on a higher income is more likely to have a bigger or smaller mortgage?

Note that paying for a mortgage does little to enhance the local economy.

ScruffyGiraffes · 17/03/2023 15:44

The answer is for the economy to grow and everyone to earn more than to penalise high earners further and stultify growth.

Yep. And unfortunately this is what's happening. Productivity won't rise significantly until these bottlenecks in the thresholds are fixed. Who do they think is going to pay for public services if those who pay the most tax have effective tax rates over 100% so cut their hours down.