Increase in culture of envy

[BrighteyesBonnie]

AIBU to think that the culture of envy has increased significantly in the UK (if Mumsnet is anything to go by)?

For example, a thread by a lawyer asking whether their current salary is fair given their qualifications and years of experience contained a lot of responses angry that the OP is earning more than them and also ridiculing the OP for wanting a better salary.

Another example are threads on private schools, where there is a strong undercurrent of anger at those who are sending or want to send their children to private schools. Privately educated people are viewed with harsh lenses and often insulted.

Ambition and doing well do not appear to be appreciated if you’re doing better than the average.

It's terrible. Last time I was applying for jobs I had DH review applications and et voilà! Job offers 🤦 I am an educated woman with successful business behind me, career changed, moved countries... I still bloody need him for job applications 🤦

Good point. They'd be the first to bleat on about equity and fairness in this example.

There is a difference between money earned and money taken from others. We can pretend there isn’t but there is. That’s not me saying we shouldn’t haven’t a benefits system, but you can’t compare the two are they are totally different

It’s impossible to build generational wealth in this country for people who aren’t savvy about financial planning.

UK: In the current tax year, 2023/24, no inheritance tax is due on the first £325,000 of an estate, with 40% normally being charged on any amount above that.

USA: The federal estate tax exemption shields $12.06 million from tax as of 2022 (rising to $12.92 million in 2023).

MASSIVE difference.

My MIL’s house is valued at over £600K, but no amount of talking to my OH will get him to bring up sensible financial planning so we don’t have to pay 40% on £275k to the tax man.

@CheekNerveGallAudacityandGumption

Isn't it the case though that if one half of a couple has died - their £325,000 passes over - meaning when the other party passes on the allowance is 650,000 ?

Might not be the case in your situation though

Not in our case.

Still, 650k is peanuts compared to the $12 million+ your allowed pass down in the USA.

I think you mean that IHT tax exemptions are lower in the UK than in the US not that it is 'impossible to build generational wealth' without financial planning. There is a very large exemption still and, even with IHT, someone who inherits hundreds of thousands is considerably wealthier than someone who inherits nothing at all. That is intergenerational wealth being passed down.

It's odd how people are far less willing to pay tax on unearned wealth but most of us pay far more with much smaller exemptions on our income which we actually work hard for on a regular basis.

"There is a difference between money earned and money taken from others"

Actually a lot of wealth in the UK is accrued from skimming the surplus value of the labour of people on very low incomes, many of who are also on benefits (or as you'd call it 'taking money from others' - because you obviously see benefits as some sort of theft/begging).

"It’s impossible to build generational wealth in this country"

Is that a bad thing?

Yes. Otherwise what’s the point of it all? Should each generation one after the other just scratch around in the dirt?

If we had a government that promised to invest all the money (7.2 billion) raise by inheritance tax (which in this country will come primarily from the sale of property) in building truly affordable social housing, and doing so on a grand scale, would you feel less p*ssed off about paying it?

"Yes. Otherwise what’s the point of it all? Should each generation one after the other just scratch around in the dirt?"

How did my parent's generation manage it? My mum and dad had no inheritance. None. Not a penny. You know what they did have? Affordable housing. As did their parents' generation (both sets of grandparents lived in council houses).

The huge expansion of high quality and affordable social housing, along with huge investment in public health and education was what enabled my parent's generation to thrive and gain financial security.

To make sound policy, you would have to assess the impact on incentives across the board. What do you suppose the unintended consequences would be if the government increases inheritance taxes and rather than affect the very rich, increases the tax burden on an already overtaxed middle? For instance, people may simply use up the equity in their homes and rely heavily on the state during their pension years, creating a pension provision hole down the line. Or indeed without children benefiting from their parents’ property, they become reliant on the state to support them in one way or the other.

This country cannot continue increasing taxes on an already squeezed middle and expect this country to grow. The base of net contributors are already shrinking.

A much better thought through approach to our tax strategy is needed rather than one based on political expediency.

More people were net contributors rather than net takers. This allowed for better provision of public services.

Now everyone wants and very few are funding all these wants. This road leads to falling living standards for everyone and a country falling behind in terms of productivity.

The evidence is there. Do you think the decline in productivity is because the government isn’t taxing people enough?

Now everyone wants and very few are funding all these wants.

This is something nobody wants to talk about. We are a very very needy population compared with others, our expectation of support and state involvement in our lives is very high. We’re unhealthy both mentally and physically, millions are signed off or only work part time while claiming top up benefits, it all has to come back to get us somehow.

"The issue I have with this that people seem to be wanting others to go down to shite state educational rather than arguing the state education should go up as close as it can to private one."

Ok - so the average spend per head on education in the state sector is 5.5K to 7.5K per pupil, per year.

Fee paying schools in the UK charge on average £21K a year.

Are you making a case for parity of funding between state and private schools?

Or are you arguing that state schools should get the same outcomes as private schools for 1/3 the spend, and while having to educate all the most socially challenged children (who are of course ruthlessly excluded from all mainstream private schools).

"our expectation of support and state involvement in our lives is very high."

We spend a lower proportion of GDP on public services than most other EU countries.

"increases the tax burden on an already overtaxed middle?"

I'm talking about inheritance tax.

Inheritance money is not money you've earned. It's money that's simply given to you.

The problem with the anti-higher earner narrative is that the UK needs higher earners, and needs to be attractive to higher earners and businesses. What’s attractive about staying in/coming to a country that is hostile to you and thinks you should happily swallow high taxation?

As it stands, higher earners are leaving the UK. It isn’t an idle threat, it’s happening. More millionaires are emigrating than they are arriving. ‘Off you fuck then’ may be the response, but why would they care? They’re taking their money and their businesses and leaving for a better quality of life elsewhere in one of the countries that is trying to court them (and countries are indeed competing to do so) whereas the UK is losing tax revenue it needs to pay for public services. I know people who have left, and are in the process of leaving. My own parents are going this year, and my husband and I are trying to renegotiate his contract so we can hopefully leave earlier than planned too.

"The problem with the anti-higher earner narrative"

What 'anti-higher earner' narrative?

The UK has relatively low taxation compared to many other EU countries.

Yip high earners leaving is exactly why other European counties with higher tax burdens especially those focussed more on the higher earners are doing so much worse... oh but hang on... they are doing better than the uk with more to spare and share amongst the poor in society

We may be losing the kind of higher earner who is only interested in themselves and so will have been using every tax dodge known to man but all the evidence suggest that most people - even millionaires- are not that shallow and self obsessed

No, the evidence doesn’t suggest that.

“More millionaires are emigrating from the UK than arriving, according to analysis by migration consultancy Henley & Partners. The country has suffered a net outflow of 12,000 wealthy individuals – those with assets and cash of more than $1m (£830,000) – since 2017, with some 1,500 rich individuals leaving in 2022.”

https://www.telegraph.co.uk/tax/news/repeated-tax-raids-driving-ultra-wealthy-britain-costing-us/#:~:text=More%20millionaires%20are%20emigrating%20from,rich%20individuals%20leaving%20in%202022.

and funnily enough, bleating about selfishness isn’t stopping them.

And here’s a list of some European countries that have introduced policy to attract the wealthy.

https://nomadcapitalist.com/finance/low-tax-countries-living-europe-2022/

Because we can no longer afford to. With net takers, tax revenues cannot stretch far enough. How are you going to increase spending per capita if you only have a small overtaxed base?

Where will a country facing a productivity decline, a shrinking tax base of high earners, get this extra money from? A magic money tree?

It’s got a low corporate income tax rate, but that in itself isn’t in fact enough to attract investment. Not when juxtaposed with a top personal income tax on dividends of nearly 40%, the 15 year rule for non doms, a comparatively low threshold for inheritance tax, and a property tax burden that is one of the highest in the OECD (same as the tax on dividends, actually). Britain ranks at 26 in the OECD tax competitiveness index. Compare this to Sweden that ranks at 12, Germany at 15, and the Czech Republic at 5.

UK has low taxation of low and middle income earners.

Thats the part you are missing.

The country is broke because we have 50% of people paying 0% income tax, and the small slice of people paying the bulk of the taxes (higher earners) are not enough to subsidise the low and middle income folks (the retired included).

The math does not add up when you also have an aging population, which means even more retired people paying less tax and receiving even more benefits.

Thats why higher earners are leaving. They see this problem and are avoiding the coming decline in living standards that will hit the UK.