Tax system

[Cupcakes2024]

Watching some of Jamie dimon from JP Morgan and chase bank, speech's and one point he advocated is rather than tax the rich to raise taxes is instead its better to have a balanced tax system , basically is Jamie correct ?

"Clearly you haven’t answered it. You can only use credits if there’s a system to use them in. What system to determine eligibility for a state pension would you devise if you scrapped NI?

That’s four times now."

This is quite aggressive. I think the argument was that there isn't really a need for "eligibility" since it's not as though people would be left to starve (thank god) just that it would need to be means tested. I mean I know nobody wants that, but I can't really see how it can be avoided. At least eventually. There just isn't a large enough working population to cover the pensions.

Also in response to this:
"It didn’t bother them with WASPI women - I lost out on three months’ pension by seven hours."

3 months is what is being suggested as the improvement. Because it's better than losing a year because of being the wrong side of a cutoff...

I think the argument was that there isn't really a need for "eligibility" since it's not as though people would be left to starve (thank god) just that it would need to be means tested.

There was no mention of means testing, just the suggestion that NI be scrapped and higher taxation replace it. The resentment and envy of pensioners here is incredible. Frankly it’s enough to make anyone aggressive - not that I think I was.

@dreamingofsun

Its this chart.

THE EXISTING SYSTEM!!! How many times?????

People get credits towards state benefits such as the state pension. They DON'T need to pay any NIC to get those credits! What's so difficult to understand???

The existing system is currently applicable to the unemployed, disabled, parents of young children, part time workers earning between the two lower NIC thresholds and self employed earning between the two lower NIC thresholds.

The existing system can be extended to include others such as those with buy to let income, large amounts of interest/dividends, foreign income, etc., via the self assessment system as such people will already be submitting SA returns and can gain "credits" for state benefits just like self employed people gain credits via the SA return.

For workers, it's similarly easy - those whose earnings are between the lower NIC thresholds gain credits via the payroll submission system - without paying any NIC - that system can be extended so that workers on higher wages can also get credits for state benefits without paying NIC, same as with self employed on higher incomes.

I really don't understand what you're not getting here. It's blatantly obvious that you don't understand how NIC credits are given for several groups of taxpayers without them paying any NIC. Just extend the existing system to everyone. You've then got a system for granting credits towards state benefits such as state pension without anyone paying any NIC. Probably at least half the population have already gained some such credits over their lifetime via the existing systems.

The resentment and envy of pensioners here is incredible.

But the resentment is for a reason. Imagine if a tax was introduced of say 14% that only pensioners had to pay on their income (on top of their current tax burden) but nobody else had to pay it. And let's say that tax was supposedly to pay for education. (So something that most pensioners won't actually benefit from themselves) Would you resent it? I'm going to say you probably would.

Please tell me how anyone would get credits in a system that no longer exists, ie scrapping NI. That’s all I’m asking. It’s blatantly obvious to me that you have given no consideration at all to the practicalities involved in getting rid of NI.

When I started work the basic rate of income tax was 33%, there was another 9% NI on top. What you seem to forget (conveniently) is that we paid NI for decades, including two generations’ pensions for people who no longer paid NI. What’s so special about your generation(s) that you’re treated differently?

Payment of NIC is only part of the system of "credits" for state benefits. Many people gain "credits" without paying NIC - so you just continue and expand that system and drop the collection side of it!

To make it easier to understand, we could just say that NIC payments are 0% so use the same system, but just not collect any NIC, or collect it at 0%.

Go back into history. You used to get "stamps" on a card as your proof of entitlement, hence the term "stamp". It started as being a modest weekly amount to pay. You either paid it yourself by buying a "stamp" at the post office and putting it on your card, or your employer bought stamps and stuck them on your card. Back in those days, it didn't matter about the amount of NIC you paid, it wasn't earnings linked. Over the years, successive governments changed the rules to collect more NIC linked to income, and that's when it became another tax rather than a form of insurance. The NIC class 2 fixed weekly amount maintained the same system, i.e. a fixed weekly amount that counted towards state benefits, not earnings related - it was around £3 per week. We just go back to that system, i.e. an electronic equivalent of a "stamp" affixed to a virtual card, earned by being disabled, unemployed, caring for young children, working/self employed with income over a certain threshold etc. Luckily, that system already exists so can be used and extended to replace the payment of NICs.

And university was free, a house was 4× average income vs 9x and you still get to retire earlier than anyone younger. Swings and roundabouts.

you still get to retire earlier than anyone younger.

We get our state pension a whole year earlier. Ffs.

"What’s so special about your generation(s) that you’re treated differently?"

But the current generation of pensioners is the one that's being treated differently! The rest of us will retire later - potentially without a state pension, definitely without free prescriptions, probably also a free at point of use NHS. Many will be in insecure housing.

Yep. It’ll get harder for younger generations

It already is

You wanna trade that year for student debt and 2024 sized mortgage? And its 2 years for me...

"BIossomtoes · Today 19:03

you still get to retire earlier than anyone younger.

We get our state pension a whole year earlier. Ffs."

But earlier you were saying how unfair it was that your pension was delayed by 3 months...

isnt it 3 workers per pensioner then 1dayatatime at the moment? I'm not sure where the 1.8 comes in?

Nobody’s forced to go to university @Butterdishy. Up until the mid 90s only 10% of the population had degrees.

But earlier you were saying how unfair it was that your pension was delayed by 3 months..

I didn’t actually say that. I’m a WASPI woman, they did us in increments. I was born at 7am, I got my pension three months later than a woman born before midnight on the day before. It was farcical rather than unfair.

But at least you got a pension. You paid your 33% and your 14% NICs and you got a pension. We are paying NICs for probably nothing. The only reason why it’s not been rolled into income tax is no politician wants to admit that NICs is just another form of income tax

BIossomtoes · Today 19:14

Nobody’s forced to go to university @Butterdishy. Up until the mid 90s only 10% of the population had degrees.

This just shows how out of touch with the job market you are. Sorry.
Now the same jobs that you could get in the 90s as a school leaver you need a degree for.
I'm lucky. I'm 46. I have a decent job. Any youngsters starting in my industry would ABSOLUTELY need a degree for their CV to even be considered. That's just fact.
So actually while my situation is worse than yours, someone 20 years younger has it SO much worse than me!

The employment landscape has changed a bit since then.

I’m not sure how anyone can say the younger generation won’t have it harder

I’m gen X and have gen z and A dc

They’ll have it harder just on numbers of working v pensioners alone

Oops you are absolutely right- my sleep deprived brain read 2120 as 2020.

Apologies

The employment landscape has changed a bit since then.

Indeed. But largely because the number of graduates has increased exponentially and the value of a degree has been diluted.

I’m not sure how anyone can say the younger generation won’t have it harder

Its ridiculous, there is zero point in engaging with people who cannot grasp this.

Re university, you're out of touch. Many jobs that had minimum requirements of only O levels or A levels in the 80s now require a degree. It's demand led by employers. Today, your career/employment opportunities are severely restricted if you don't have a degree. Just another burden forced upon the younger generations. And, of course, today's uni students have to pay tuition fees and get loans instead of grants for living costs etc, so end up an average of £50k in debt which is something else that previous generations of graduates didn't suffer! Not to mention lack of wages for those 3 years when they're studying instead of working, delaying entry to the workplace, thus delaying career progression, promotions, pay rises, etc.

Indeed. But largely because the number of graduates has increased exponentially and the value of a degree has been diluted.

Which is why you kinda have to have one…