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!

@Dibblydoodahdah

I totally get that but taken in isolation the claim about salaries is not true. That’s all I’m saying.

I think we should all do whatever is best for our families - OP’s plan is entirely reasonable but it’s disingenuous to pretend that those earning over £100k are disadvantaged in any real way.

What they have are more choices and that is great and I don’t doubt their salaries are well.deserved, but acting like a couple both earning over £100k are having to make these decisions for childcare to be affordable is just untrue.

You went to all the trouble of finding a salary calculator, putting in the two sets of figures, and faithfully copying the results into your post. But at no point did you read enough of this thread to understand that the issue includes the lack of tapering for tax free childcare and 30 hours at £100k, neither of which are reflected in your calculation. Do you want to try running the figures again, with that accounted for?

The whole point of the thread though is about the fact those earning over 100k lose out on 30 free hours childcare. No tapering or anything. Can that be factored into your numbers?

@Merryoldgoat this whole thread has been about the OP earning slightly less to take advantage of tax free childcare and 30 hours childcare. She’s never claimed that a £99k and a £134k salary are the same after tax and NI deductions.

We’ve already established that those earning over £150k pay 37% of all income tax. You appear to have conflated two different things here.

So not 12% then. 🙄

It’s the same attitude that drives businesses away. We must make businesses pay more tax greedy bastards. Business then moves to a country with more favourable tax laws, U.K. then loses the income completely from that company.Same with non-doms. We have lost a lot of money as a country by changing the laws on this as people felt it was ‘unfair’. But at least people get to feel good. Same will happen with high earners. Politics of envy not practicality.

We’ve already covered that and I said I was wrong. Do keep up. 🙄

I posted the breakdown of % income tax take vs income band upthread.

I posted the breakdown of % income tax take vs income band upthread.

I know, I saw. Thanks for that, helps to set straight some of the ridiculous false claims. ^^ Not that most posters on the thread have been too interested in the facts!

Yes it’s damaging but can be seen as a politically successful take for parties who’ve been in opposition for a long time. It’s concerning though.

I wonder how many people who earn £100k+ use childcare? Most high earning jobs aren't 9-5 so traditional nurseries and childminders don't work.

The free childcare hours have never applied to nannies have they?

I was very interested in the facts. And delighted by them.

Plenty manage with nursery/childminder hours. Lots of higher earning people with more office type jobs who leave, pick the kids up, go home, do dinner/bath/bed and then log in again IME.

Maybe more common in London but I'm struggling to think of anyone I know with one up here. Lots of pick up juggling! And of course lots of high earning men with SAHM partners so they don't have to bother their heads with such things...

Maybe more common with two high earners and multiple children though which is when it starts to really make sense.

I thought they were really interesting actually - I knew the numbers were kind of like that but seeing them in black and white was revealing. We do (as a country) have an issue with a relatively small proportion of the population shouldering most of the income tax load. That's absolutely NOT a criticism of low earners - before anyone jumps on me. We have issues with low pay in some sectors which are not easily rectified (and it's not as simple as "employers must pay more" really, as they can only pay what the market for their goods and services will tolerate), and I think there are also numerous issues with benefit traps which disincentivise or even make it downright impossible for people to do just a little bit better financially.

The system is fundamentally broken in so many ways.

The OPs response to the budget is perfectly rational. If the government doesn't want it to happen they need to taper the right to free childcare like they've tapered the right to child benefit at £50-60k.

DH and I earn less that the OP but deliberately both went 4 days a week because it was more tax efficient than one of us working 5 days a week and the other 3 days. As the DC got older and we increased our hours again we've upped our pension contributions to avoid losing out on child benefit and being taxed at 65%. The government want us all to put more in our pensions so it's a win win situation.

There's always a response to tax changes. You could argue that tax changes that encourage high earners to work PT and share the childcare are beneficial to society.

Also surprised how many people think once you go PT it's impossible to return to FT work once you're out of the childcare years. I know in the public sector it can be hard but my experience in the private sector is that it's perfectly possible and is completely standard. I've never heard of a parent being refused permission to increase their hours.

Completely agree, @StatisticallyChallenged with everything you've just said. We have a chronic problem with low pay in many sectors, and this then makes the whole structure extremely unstable as it's increasingly reliant on an ever-smaller proportion of people to fund the vast majority of services. There have been a few studies on this narrowing of the tax base over the last decade especially and the instability it causes. As we can see in this thread, it is also socially destabilising: the Nordic or German models where salaries are higher at the lower end but everyone is expected to contribute more to tax mean there is far more public buy-in, and also avoids the mindset we've seen expressed here where people see to view the purpose of taxation as a transfer of wealth (obviously it will always partly be redistributive, but that shouldn't be its main purpose) rather than everyone contributing to services that are public goods for everyone to use.

Some of the weird comments on here stating that higher earners shouldn't use the services that they're paying for show how people get into that kind of mentality, which is when services start getting eroded because while higher earners of course accept they'll pay far more so pay for themselves and subsidise others, the idea that they shouldn't get to use the state services either is corrosive. It also leads to things like education and health being so underfunded, if the people who pay the most for them are pushed to use private services instead because they won't then have a vested interested in these things improving.

Also surprised how many people think once you go PT it's impossible to return to FT work once you're out of the childcare years. I know in the public sector it can be hard but my experience in the private sector is that it's perfectly possible and is completely standard. I've never heard of a parent being refused permission to increase their hours.

No doubt that's happened, especially before the job market was as hot as it is now, but I think sometimes that argument is offered in hope rather than expectation.

And absolutely yes to these disincentives exsiting at every level of the tax and benefits system. The Guardian article highlighted that: whether you're claiming UC or hitting the £50k threshold or the £100k threshold the issues are remarkably similar and have the same effect: it's not worth working more.

What has been eye opening is that many posters on the thread don't seem to be able to understand that the perverse incentives work in the same way at each level and the psychology behind the decisions that will be made is the same. This is one of the most basic economic principles: that people will act in their self-interest. I didn't realise that quite so many people would be unable to grasp that logic or the fact that it would be in everyone's interests to fix those problems.

It certainly shows that economics not being part of the national curriculum is a huge problem.

This is one of the most basic economic principles: that people will act in their self-interest.

That isn’t always the case. On paper I should be a natural Tory voter - home owner, higher rate tax payer for decades, investment portfolio - and I would never, ever vote for any party that would make me richer at the expense of making other people poorer.

I think a better way to put it is that some people are always going to respond to financial disincentives to work where they have a choice, and in some of the more extreme examples people will have no option but to do so.

I'm not talking about politics or voting. I'm talking about economic decisions people make about their life, job, finances etc.

Why did you buy a house? Why did you put money into investments? Presumably because you looked at your options and decided that it was in your best interests to do so. As everyone does.

You mean you would prefer to vote for a party that will force you to hand over more of your earnings and you think that's the right thing to do?

Yes.