Why won't any political party focus or help the squeezed middle

[Winterday1991]

Off the back of another thread, has got me thinking about the next general election.

Why is there not a party that will focus on the middle earners in the squeezed south east , where both partners work full time, who are struggling juggling mortgages, cost of childcare and self fund everything and are over threshold for any help or subsidies ie child benefit, cost of living payments, free childcare via universal credit?

We are a middle/highish income family and are just so sick of paying into the system and getting nothing back! The amount of tax we pay is insane, certainly not anywhere near value for money. Labour just seem to want to focus on single parent families and those on universal credit.

Any party who focuses on the middle will surely win the election?

Of course no cares about the squeezed middle.

Fewer people contribute and more people benefit from them, so if a party want to get elected they will play to the bigger part.

Except the OP is on a household income of £95k. So she's nowhere near the squeezed middle, but the 'squeezed top 8%' doesn't have the same ring to it.

Part of the trouble is that we all feel, deep down, pretty squeezed. I've got relatives on benefits and one in £££££ central London, some left wing, some right wing, but one thing they all have in common is feeling like the government is letting them down.

What we need is socialist policies that help everyone - free childcare, a properly funded NHS, get rid of tax loopholes for businesses, stop overseas investors buying up entire neighbourhoods of London, cap banker’s bonuses, put controls on how much house prices and rent can rise by. But the “squeezed middle” won’t vote for a party proposing anything like that (not that any party is) because they like capitalism and fucking over the poor when it’s working in their favour.

So they’d still be better off then?

If you mean they’d still have a net pay-rise then yes but depending on what a promotion meant in terms of responsibilities or additional working hours or having to do things like travel more with associated disruptions to life and potential extra child care costs then individuals may not end up better off. Even if they would (I do) they might be better off still shoving the money in their pension and decide on balance they’ll go for that vs losing 60% of it to tax/NI/loss of child benefit. I don’t think anyone needs to feel sorry for higher earners. Generally they are in the position to have a lot more choices about how to manage their finances and they can afford to do things like put money into pensions to avoid marginal tax rates, losing child benefit etc and still keep progressing in their careers.

I think the point people have been making (which wasn’t the original question in the thread) is that having policies that create these thresholds where you have a slice of income you lose significantly more on than the applicable tax rate tends towards people feeling like working more hours or taking on more responsibilities isn’t worth it or is only worth it if they can shove all their money in long term savings where it isn’t taxed or is only worth the responsibility if they cut hours etc.
If studies are showing that’s bad for the economy overall it doesn’t make sense to stick with that as a policy

No, @whatkatydid2013 the OP was suggesting you weren’t any better off for earning a combined £95k than someone on UC. And others suggested you are worse off when you earn more (I accept there may be some odd cases where this could be true -in which case a discussion with employer could sort it). If you have more, you should contribute more. It’s the only way Society can work.

Thats not how the UK tax structure works.

The bottom 80% contribute little in income tax.

The top 20%, almost 90%

Thats not "progessive". Its practically exponential.

And that is not how it works in Scandinavian countries.

The bottom 80% contribute more in income taxes. Because of their broader tax base, that is how they are able to properly fund services.

Asking the top 20% in the UK to keep paying more and more to subsidise the other 80% has reached the end of the line. Its also why services are now failing.

You cannot take more blood from the stone.

Higher earners are actively changing their behaviors to avoid tax now. I have never seen it this bad and I have worked in the City for many years.

This means services will keep getting worse unless they fix the tax structure. The UK is essentially broke if it continues down this path as it will be caught in a low growth, poor demographics negative feedback loop.

People across the income spectrum sometimes respond to disincentives to work and earn more by not working and earning more. It's just how it is. Shockingly enough, opinions from others who aren't in their shoes about what they ought to be doing and on whether particular decisions are short sighted don't hold much weight.

This is not a rich thing, it's not a poor thing, it's not a middle thing. It's a response to incentives thing. Take it from someone who's got a wider breadth of experience than most when it comes to the income deciles. Not everyone does it, but some do, and we're choosing to persist with a system that's going to increase the absolute numbers who have a decision to make. It might be worth thinking about whether this state of affairs is actually serving us well.

Unfortunately though, too many people allow themselves to get blindsided by whether they happen to sympathise with the individual making the argument.

I am beyond stunned at the number of people who think UC and a household income of £60-100,000 are similar. My household income is in that bracket, my sister is on UC. Our lifestyles are very very different (and she lives in a much lower cost of living area). Plus for my children there's a massive difference in me owning a large house in an expensive area and renting.

Yes I can buy less of what I want than before but it is not the same.

Yep. Pretty soon, there will be post about disabled all scamming, whilst moonlighting as builders, followed by rants about disabled kids who aren't really disabled. 🙄

Last of all, Boomers will get all the blame for the lot....😷

That is presumably because you don’t have childcare costs, though. Out of interest, I did one of those benefits calculators based on an annual income of £33k and childcare costs of £1.5k per month (which I understand is not out of the question) and it came back with UC entitlement of just over £1400 per month. Which would effectively give a net income of £3,600 per month. That’s not wildly different from my take home on a salary of £62k.

Already been plenty of "My taxes pay your benefits" claptrap.

As usual you are focusing only on income tax and ignoring the fact that most really wealthy people like the PM don’t derive much if any of their income from items that attract income tax.

I know and the OP is clearly wrong. I mean possibly not in some very specific instances in the short term while people are paying for full time childcare for multiple kids but certainly in the mid term it’s bollocks.

Following on from that lots of people have been talking about issues with tax policies and I agree some of those policies are pretty stupid and if they are contributing to overall tax revenues being lower than they would likely be with different policies then looking to change those is a good idea. Having a discussion with your employer really can’t change anything. The policy is as it is. All you can do to avoid hitting the bumps caused by thresholds is invest in certain employers share schemes in the private sector, reduce your hours or pay more into you pension.

If you have more you should contribute more but equally as various people have pointed out it’s naive to think anyone is going to operate against their own families best interest (whether that’s someone like me shoving more in pension to retain child benefit, a senior doctor going part time to retain child tax credits & personal allowance or someone working part time and receiving universal credit not looking to move to a better paid full time role because they’d be no better off overall and have less chance to see their families)

Out of interest, I did one of those benefits calculators based on an annual income of £33k and childcare costs of £1.5k per month (which I understand is not out of the question) and it came back with UC entitlement of just over £1400 per month. Which would effectively give a net income of £3,600 per month. That’s not wildly different from my take home on a salary of £62k

So what is the alternative? That people on £33k don't have children? That people on £33k don't work?

Also @cardibach a lot of this around income tax fails to address the fact that those with the most don’t have a salary. They have unearned income and the ability to structure that in ways that allow tax to be minimised. I do sometimes wonder if everyone just paid a fixed 35% tax on income and capital gains and same on estates how much revenue it would generate and if it would be easier to close loopholes. Would it be enough to fund things like social housing, dentistry/healthcare, education, childcare etc more fully? If so would that actually work better for those on lower incomes as they’d retain those services whether they worked part time or full time and would those in lower incomes have more choices than they do now? If so we should be working toward that really.

Suspect probably owns rather than rents too, either that or the rent is unusually low. Because the biggest UC awards are usually towards high housing and childcare costs, what with us having a completely fucked system when it comes to those things. To the extent that actually, households can be on much more than @everetting and still be in receipt of UC. There are higher rate taxpayers who get UC, which is one of the reasons why it's so unhelpful to frame this as the lifestyle of people earning more than most v people on UC. They're not two discrete groups!

Or because someone has to pay for all of that, and guess who is immediately looked at for the tax hikes

Would we need tax hikes to address buy to leave type situations?

No idea what the alternative is - just pointing out that in some cases it could well be possible that UC brings income up to that of someone on a much higher salary.

The whole system needs looking at. If someone is working full time they shouldn’t need top up benefits in the first place. The fact they do is a failure of our politicians.

Where do you think benefits some from? Note, I'm not saying "your" benefits, because benefits are for anyone who is struggling and qualifies, still, where do you they come from?

People pay in, people take out.

@TheThinkingGoblin I hear you, and I don’t disagree. The middle tax rate absolutely should be increased, the Tories have presided over some mega fiscal drift when it comes to income tax. But that doesn’t change that £90k is a big household income, much bigger than most people. It goes less far in the south east for sure. But the ‘why bother’ doesn’t wash with me. It’s my husband that’s the higher rate tax payer not me, but even paying more tax he’s also getting more pension contributing, he’s moving up and his salary will keep increasing. Are there really people on £45k saying no to £60-65k jobs because they don’t want to pay more tax?

@Alstroemeria123 absolutely. Benefits subsidise business to pay low wages and subsidise landlords to charge high rents.

That's too much of an oversimplification, in my experience. It's about the amount of money you're left with not necessarily being enough to justify it if there'll need to be extra effort and/or costs of working. This will depend on personal circumstances and priorities.

This isn't only about tax, in the example you've given here it would be withdrawal of child benefit too. There are also permutations at different points in the income spectrum: people absolutely make these choices in relation to top up benefits on very low incomes, and to retaining the personal allowance if they're on six figure sums too. It makes no difference at all whether the 'why bother' happens to be persuasive to other unrelated individuals.

Probably not from people who say it I suspect!