DH and I going part time to deliberately reduce wages

[Bucketheadbucketbum]

Just working out the free childcare hours and actually DH and I will be muxh better off if we both dropped to 3- 4 day week to deliberately reduce our incomes. Would obviously be nice way to live too! Anyone else doing same? Seems mental but we've looked at it 100 times over and it's true!

I read pro rata as meaning removed according to income, like with CB between 50% and 60%, but I could have got that wrong. Agree it wouldn't make workable to do it based on hours.

The later graphs are about the effect of these idiotic tax policies on productivity and living standards over time.

That's not true. The reason many people campaigned for, set up and maintained affordable housing was with a vision of a better and fairer society. Many people believe it immoral to allow private ownership of a basic human right just as they believe it immoral to have a separate private health or education.

Obviously it's also cheaper because the (moral) idea is to allow people live affordably in communities, which is why the profits went back to councils to maintain and build properties before the government redirected it to the treasury, meaning council tenants effectively pay extra taxes.

You will be lucky if you have a nursery to send your child/ren to. This new scheme is going to send a lot more under.

You do realise nurseries get around 50% less per hour per child from the governments “free” hours. And they are supposed pay for overheads, qualified staff, food and all the other expenses? There is nowhere for this money to come from. Private nurseries are becoming dictated by the government and are already in a crisis.
if they want to help all parties they would be offering a subsidy or top up scheme where nursery’s get a fair fee. Then guess what, your fees will be cheaper because we’re not trying to make up the funds from everywhere else.

Btw I’m qualified nursery nurse, with two children. So I see both sides. But its okay, you do you with you with your 100k+ salary.

😆 I’d suggest they have a word with their employer because working over 14 hours a day 7 days a week is illegal.

Pathetic. Clearly you know very few people who work in law, medicine, finance. What do you think their employer will say about it?!

Exactly. There are public goods which we all fund and all should have access to: education, health, pensions. Early years care and education is part of that and is treated as such in pretty much every other developed economy. It isn't "welfare". Welfare is cash transfers to poorer households, like the UC payments which mean many pay -50% tax rates. Which most higher earners are happy to fund. But not to work more to fund if 100% of our additional earner income is taken to fund this plus public goods that apparently the people paying for for everyone should then be excluded from accessing also. No sane person would do that. So they aren't. So there's not enough money to pay for them because the net contributors are so heavily penalised they've stopped bothering to pay more in. Hardly surprising to anybody with half a brain.

Great idea. Make it more punitive then the people paying for the services and benefits for everyone else will cut their hours even more.

The economic illiteracy on this thread is astonishing. I knew it was bad but my God, I thought Mumsnet generally had reasonably intelligent people on it compared to an average cross section of society, in which case these responses are terrifying.

Just be aware that the hours are not 'free'. They're funded- pretty poorly. Most nurseries charge something extra just to be able to stay afloat. Meals, consumables etc. Or they may only allow funded hours or be used in certain sessions so it'll always cost the parents something. Best not to make any decisions based on the hours being 'free'- you'll be hard pushed to find anywhere that it really is actually free to you.

I don’t know if it’s economic illiteracy, poor comprehension, unable to read data, ignorance or all of the above. A single parent on 100k would need to earn 50k before seeing any rise in net income. Facts are out there. Why would you bother earning more? Makes no sense. Even as a couple, we were in the situation where a 60k rise in income would result in 12k a year more. That’s 48k to the tax man. Why bother? Especially when the 12k would evaporate in costs related to the new job.

In a way, when it all collapses and there is no safety net anymore and it all goes I’m looking forward to the told you so moment. You cannot tax people like that and expect a productive country. I’ve not seen one higher earner ever say they don’t want to pay more than their fair share? Working for free? Why would you…

The people supporting the welfare system are not the mega rich who are hoarding wealth. They are professionals who have worked hard and are hit with a ceiling on earnings. Stopping them paying anymore in tax. Financial experts have literally told the chancellor this is damaging the economy. What do they know though in comparison to mumsnet posters. It would be funny if it wasn’t such a disaster unfolding for everyone.

@Ovidnaso That's as may be, but that's not why people who can afford to leave council housing decide to stay. Staying in council housing isn't an altruistic decision for the good of society. It's a selfish decision based on council housing being cheaper (and more reliable) than the private rental sector.

Before you even consider doing this, please look at the reality of using funded hours.

It is up to each setting how many funded places they offer, how the funded hours are offered, and how much they charge for 'extras', including extra hours.

It's absolutely not as simple as just getting 15/30 hours 'free'.

Added to which, unless there is a huge hike in the amount paid to nurseries and childminders, there simply aren't going to be enough settings and places available for all those needing them.

In fact if I earn just a little bit more - as I'm unlikely to get a £50k payrise increasing my pay by 50% in one go - for a time we'd be even worse off. Because the immediately tax rate would be well over 100%. As the graph indicates, if I earn a few more pounds, my take home pay could drop by tens of thousands of pounds. And then I would not be able to house and feed my children.

Great system.

I think there might be a spectrum when people are saying ‘high earner’ here…

OP how much do you and your DH earn?

You could definitely do this, but given that the 100k threshold is already very steeply taxed (see my prev posts) it would need to be a very gradual tapering to avoid disincentive issues. I'd actually be inclined to say that if you were going to do that it probably shouldn't be in parallel with the loss of personal allowance, it's just too much of a deduction all at once.

Oh, my comment about the next government being a Labour one wasn't said with any hope that things will improve under them, apologies if it came across that way. More just a comment that the childcare promises that aren't due to come in to force until well after this government have gone is just waffle really, God knows what the next government will decide to do.

This 100%. If everyone had access to these imperative public services on an equal basis - health, education, pensions - we wouldn't all be fighting amongst ourselves here tbh. When really we should be looking at those who really don't contribute according to their means, hoarding wealth, moving it out of the country- which is not people like doctors and head teachers.

Well the free hours are removed at 100k now so even a non-gradual tapering would offer more incentive than now, but broadly I agree. It's like with the 50-60k in England being both the 40% tax rate and CB withdrawal territory. They do it that way for administrative reasons afaik, but the flipside is the creation of more and steeper bottlenecks. To which people respond.

The personal allowance withdrawal and child benefit withdrawal need scrapping entirely. Both cost the state more to administer than they save AND create these disincentives to work more. It is a no brainer. This costs money and reduces tax revenue. There is no point in it.

Early years childcare/ education is a universal good that pays for itself and should be available to everyone just like pensions and healthcare and education for older children (and adults for that matter). The vast majority of higher tax payers are fine with paying this for everyone else, but it must be available to all, including them.

Penalising single adult households charging them double the tax on the same income is not acceptable, and has only been tolerated because over 90% of single parents are women. What is hugely disappointing is that other women do not campaign for this to change and stand side by side with those affected by it. Depressing.

Ultimately if you want well-funded welfare and services you need the people who pay the vast majority of that cost to be incentivised to work. If they face effective tax rates of 65% at £50k (as soon as they become net contributors) and 100% at £100k they won't. So there won't be the money to pay for it all, as we are now seeing.

Anybody who wants a functioning welfare state and services should want this fixed. But as we can see here, they do not. So it won't be.

Not among all the people I know who stayed renting their council homes rather than buy them because they wanted other people to benefit from them after their deaths.

Stop invalidating people's motives and morals. Perhaps you wouldn't behave morally, but others do.

And council housing is meant to be for everyone. People who start earning more over the course of a lifetime aren't to blame if greedy landlords charge too much for private housing.

Sorry that should be 200,000 people at that earnings level with children, so hammered now with over 100% tax. There are many more earning at that level also but with mo children, who are also cutting down their hours because they consider the 75% tax rates to be not worth their extra time, either.

Was literally just thinking the same re the withdrawals @ScruffyGiraffes . They don't make sense at all.

It would actually be better to just raise the tax rates for higher rates slightly (to effectively achieve the same amount of taxation overall but in a more gradual way), maybe bring in the additional rate earlier if necessary. That would remove the pinch points where you have really high marginal rates.

with 2 kids, between 50 and 60k you're looking at a nearly 19% effective additional tax just from the loss of CB. Plus 42% in Scotland income tax, 2% NI. 63% again, same as the 120-125k bottleness (and that's even worse once you factor in childcare issues)

It's not bloody surprising that people are disincentivised by that.

This is so unfair.

Exactly. If you work 25% more ton earn less than 5% more net, why do it? Unless you need the 5% to keep your head above water. Which thankfully we don't. We get 25% more time each with our family and a lot less stress

@Chonk I thought the poster was being sarcastic 😂

If your OH is a high earner why on earth would all your salary be used up on childcare? Wouldn't at least half, or more come out of his salary? But if you were able to quit and that was your preference/ better for the family then why not I guess.