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 ?

All benefits will need to be means tested eventually I guess, with the exclusion of kids since they have no access to their own money.

Maybe advances in AI will take away the issue with it costing more to means test

On increasing the state pension age there was an interesting comment from Institute for Fiscal Studies:

"that a one-year increase in the state pension age in the late 2030s would likely save around £8-9 billion a year in today’s terms, and delaying the planned rise in the state pension age to 68 by seven years would cost at least £50 billion and more likely more than £60 billion over the seven years."

Given that we all know the state pension age is going up, that inevitably some voters will feel very aggrieved if they have to work an additional year simply because their birthday falls just the wrong side of the cut off date and the considerable savings that can be made by bringing forward the increase in state pension age then perhaps an alternative solution might be:

Starting in one year's time (to give some notice) to increase the state pension age by three months every year. So if you were expecting to retire next year at 66 then you would have to work an additional three months, the year after an additional 6 months and so on.

So after four years the state pension age will have gone up a year and after 8 years an increase of two years etc, cutting off at say 70 unless further large increases in life expectancy occur (unlikely).

This would remove the a hard date that means some have to work an additional year, it brings the savings forward and it some want to retire early then they can via their own private pension.

Dla/pip isn’t means tested you can get it you are a millionaire but it is supposed to be for things that put a disabled person in the same position as a non disabled person.

Ha ha ha ha ha ha 😂

You are easily amused

Why so?

Not sure if you're in the UK so perhaps you're not aware of our proud record in relation to delivery of government technology solutions?

Oh right that kind of thing

Thought you were laughing at the possibility of AI doing it

If it saves loads of money for any gov it could get past the barrier of getting it in place to start with

One big ‘loophole’ is the UC credit rules around working for 16 hours. Difficult politically but that surely needs to be increased especially for those whose children are over 8 years old.

The universal state pension is not sustainable.

When the state pension was first introduced in 1948, men retired at 65 and women at 60.
At that stage, life expectancy for a man was 67. So the whole thing was designed with a life expectancy in retirement of two years.
Today, men retire at 67, at which point they would have a life expectancy of 85 – meaning the demand on the state pension is growing.
Also the number of working age people per pensioner has fallen from around 6 in 1950 to 4 in 2000 to 1.8 in 2020.



Also the number of working age people per pensioner has fallen from around 6 in 1950 to 4 in 2000 to 1.8 in 2020.

Is it really that low now? That’s insane!

If those numbers are correct I don't know how anyone could argue that pensioners should pay lower taxes in good conscience. It doesn't matter that they "paid in all their lives" it's just not sustainable at all.

https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/ageing/articles/howwouldyousupportourageingpopulation/2019-06-24

are those stats accurate? The ONS says that there will be 367 pensioners per 1000 workers in 2042. Isnt that around 3 working age people per pensioner?

granted that doesnt sound very much.

i still dont think its fair that one person may have paid vast amounts of tax, done their bit, worked FT and stands to loose out on a pension (if many of your arguments about means testing are implemented). Where as some else who doesnt work at all (or does the 16 hours a week and then gets further top ups from government ) still gets their pension.

i still dont think its fair that one person may have paid vast amounts of tax, done their bit, worked FT and stands to loose out on a pension (if many of your arguments about means testing are implemented). Where as some else who doesnt work at all (or does the 16 hours a week and then gets further top ups from government ) still gets their pension.

Buf you don’t need to earn vast amounts to even pay NI so who are all these people who have paid vast amounts of tax? If I earned 16 hours I still earn much more than £240 a week which is why I have contributions whilst at uni. There really can’t be millions of healthy people who don’t pay at some point.

@dreamingofsun I hear you. But then is it any fairer for young people who now have to pay for their university education (because a degree is expected now in what used to be school leaver level jobs) so already have 9% extra tax - to be covering the costs of people who have retired whether or not they even need the money at all? Especially in the knowledge that the same benefits likely won't be available to them?

And also the "paid in" argument is pretty irrelevant really. What if someone hasn't? Do we just leave them to starve because tough shit?
Of course we don't. They get a basic pension anyway.

"Also the number of working age people per pensioner has fallen from around 6 in 1950 to 4 in 2000 to 1.8 in 2020."

The IFS link with graph

ifs.org.uk/articles/planned-increase-state-pension-age-67-68

@Samsond

Good point. Given that the current state pension scheme is unsustainable then I see the following options:

1. reduce value of state pension (for example doing away with the triple lock), but this may mean pensioners starving on the streets. Whilst the sight of this would certainly encourage those still in work to make proper pension provisions it is less face it politically unacceptable.

2. increase the state pension age quicker. But again this is a vote loser and no political party would want this as policy.

3. continue to spend ever increasing amounts of Govt revenue on state pensions by cutting spending on other areas such as education (young people don't vote).

1dayatatime - sorry i've read through your link twice and i still cant spot those figures. where abouts are they in the article?

That’s a huge drop

Surely this is a major factor in productivity

So many are not working age

taxing inheritance would be one possibility? its always seemed illogical to me that people dont pay tax on something they havent put any effort into earning. And its pot luck if you get it and makes a very divided society economically.

And so many people of working age not actually working, or working only part time.

@dreamingofsun that would definitely help. They could have a tax free allowance at a similar level to income tax. At the moment you can get up to £1million inheritance without paying tax.(if one partner leaves property to their spouse who then leaves to their child)

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.

inevitably some voters will feel very aggrieved if they have to work an additional year simply because their birthday falls just the wrong side of the cut off date

It didn’t bother them with WASPI women - I lost out on three months’ pension by seven hours.