To wonder if Labour actually will be any better?

[Baabaagreysheep]

I think like most people I am keen to see the back of the current bunch, but I am not confident that anything will massively change for the better. Maybe that’s a bit pessimistic, but I feel that while some things will improve some will get worse - and some sort of at the same time, so I’m expecting my salary to go up but also my workload to go up!

Thinking back to when Labour were last in power it was another world, really. Interested in views.

OK. Knock yourself out then. Sounds like a very sensible idea.

Purely technically, on paper, I am a millionaire. (It's mostly thanks to inflation!) I have not inherited a penny beyond £400 from my grandma's insurance policy. I am estranged from my father and I helped my mother buy her 2-up, 2-down terraced house. Being fortunate and healthy, our (nice family) house is now ours without a mortgage, and we have done the pension saving attentively. And built a small business, over 30 years.

So now, a new government might feel entitled to rewrite the rules to declare that what I have earned slowly, year by year, should be subject to a new more radical tax regime? Every pound I have ever earned has been declared for taxation. DO you really think that the sensible middle ground should be punished just for being sensible?

Yes it is. Effective tax rate is over 100% for some. People who tip into 100k who have children, lose their personal allowance and childcare in one hit. Economists have been explaining to the Tories for a long time how this is hitting productivity and therefore tax take. Guess what? Earning less for working more makes people change their behaviour. Which is why Labour are now backtracking on the 80k threshold. It’s quite astounding how people don’t understand the nuances of our economy. If they did, it wouldn’t be such a mess.

We won't burden the taxpayer with care home fees, because we shall have to pay them ourselves, from taxed income, because we can, but hope to be allowed to choose where we see out our sunset. Not in the UK, frankly, if I get the choice.

So someone earns 150k

First 55k taxed at 20% - 11k tax paid
The tax over 55k is at 40% - 22k tax paid
Then at 100k they lose approx 10k of personal allowance - 33k tax paid

So how on earth are they paying over 100% tax over 100k??

I actually totally agree that people in PAYE are treated badly, I think they should change the system so self employed people can't be paid in dividends (or tax the dividends at PAYE rate). And tax wealth too.

But I don't agree people earning over 100k are paying 100% tax at any point.

Maybe you can break down what you are talking about with some numbers, to explain the "nuance". Because I'm pretty sure the misunderstanding is yours actually.

OK, I googled it because I like to assume poster are posting in good faith.
I think you are a bit confused about the "marginal" rate of tax and the "effective" rate of tax, as per this article. The marginal rate of tax is the amount you would pay on any pay rise you got and there are brackets where this is high. The effective rate of tax is the actual amount you pay.

It's not really "nuance" if you use the wrong language to explain things. It's just confusing.

The only time people get close to 100% is if they have 8 children and are earning between 100 and 125k. And that is only on the portion of their earnings at that point.

I really doubt many people have 8 children and earn 125k but if they do, well I think that's a consequence of having 8 children.

https://www.taxpolicy.org.uk/2022/10/04/marginal/

as far as tax rates go, the best tax rate is the one that brings in the most revenue.

No one is paying 100% tax.
No one.

Is it more or less deluded to think that Brexit will solve all the countries problems?

I must have missed the time when Labour led by Keir Starmer were in government in order to have a track record. Could you tell me when those years were?

I for one think it is excellent that the Tories know what a woman is, it has meant that for the last 13 years they have been able to implement a whole series of policies that make things worse for women.

This.

For everyone else struggling to understand.

The effective 100% tax rate is widely talked about. If you have children. Going from 99k to 101k - you’ll take home less. Absolute fact. Been there. You lose personal allowance and any right to free childcare. One child in nursery and you’ll lose the lot leaving you about 10k a year worse off. Here is a really dumbed down article explaining it from a financial magazine no less. There is a reason people stop work at certain thresholds.

Childcare.

This is why even Labour have backtracked on lowering the threshold. It lowers tax take which pays for everything. It doesn’t increase it.

For those who walk amoung us.

If the tax rate on an income of 101,000 is 100% that means one pays 101,000 in tax. If the tax rate on that income is over 100% then the poster is saying that the tax paid is more than 101,000.

Presumably that we currently live with the highest taxes we have had in peacetime is a good reason for continuing to vote Tory?

As soon as you hit 100k any over that in those circumstances is effectively taxed at over 100%. Literally explained in simple terms - with figures in the above article (from a financial publication). It will take you another 50k or so to match disposable income from a salary of 99k. You will clear less between roughly 100k and 150k. This is why people stop working at certain thresholds. They’ve been told by economists it stops productivity and lowers tax take. That means less for everyone.

I’d never vote Tory or Labour both are equally crap.

It seems like what you're saying is you want the country to be screwed, by removing the yourself from the tax payers. Surely that can't be right?

This is why people stop working at certain thresholds.

I may be mistaken but I think George Osborne's 50% tax rate cost the Revenue more than it received. That's when political optics become madness.

I do think there's a mystical group of the 'rich' that people think can be the saviour of the U.K. It's really not the case for the average high earner, who already pays 45% on the top slice of their income. And that's on top of VAT, income tax on savings, CGT, inheritance tax and council tax so it's far more than half. That's a lot of your money.

There comes a point where people think they pay 'enough' and want to see the money better spent, not wasted on vanity projects and inefficiency.

*mythical not mystical

Yes it did. The same thing is happening now. It’s insane you are worse off for nearly 50k of pay and lose all of it and more. Hence why - people stop working or plough it all into pension to get the extra. Costing the treasury more. Which is why Labour are not backtracking on thresholds. People won’t do it.

I do think there's a mystical group of the 'rich' that people think can be the saviour of the U.K. It's really not the case for the average high earner, who already pays 45% on the top slice of their income. And that's on top of VAT, income tax on savings, CGT, inheritance tax and council tax so it's far more than half. That's a lot of your money.

There comes a point where people think they pay 'enough' and want to see the money better spent, not wasted on vanity projects and inefficiency.

Three people in my department have brought up possible moves to the Asia/Middle East in their mid-year reviews this year. People in this bracket won’t just sit back and be squeezed more.

Alyso good luck with queuing at the food bank, kids alongside you wanting their breakfast. I suspect you won't enjoy it as much as you would have us believe but it's your choice. Perhaps you could swap places with someone compelled by circumstance to undergo the life you apparently envy?

Yeah but, no but, yeah but…

it doesn’t matter how little tax is collected or how it’s wasted. What matters is that lots and lots and lots needs to be spent. We need to take everything people earn, borrow trillions and print money like nobody’s business because it’s public services innit. anyone stupid enough to earn more than minimum wage deserves to be milked. More fool them for not.

There’s a net outflow of the millionaires (and that’s not even the super wealthy) from the UK, which is a problem. It’s all well and good to talk of higher taxes, but that ignores the fact that capital is mobile, and those in the position to leave will do so (are doing so). Of course there will be wells that remain, but those aren’t infinite and will dry quickly.

It’s competitive tax policies that attract investment which in turn generates greater revenue.