Labour and tax

[Iwishicouldflyhigh]

Is anyone else concerned about all the talk about Labour getting in and then increasing lots of taxes - capital gains, CT, tax on pensions etc. I'm accepting that they are going to get in, but i am genuinely concerned that they are going to clobber the middle classes.

I don't think that KS is a bad person (actually - with a few exceptions - i think that most politicians at least START in politics with the correct intentions), but i 'm worried that his genuine ideals are far more left then he is making out. The rich will be all right (they always are), but the middle classes (of which i am one) - i'm genuinely worried. He supported JC for God's sake!!

I think that people are genuinely so pissed off (rightfully) with the Tories, that they are voting in Labour with the idea that they can't be any worse. But i'm concerned that they might be (for different reasons).

Can any party really fix the issues in this country?

Please talk me down, someone!

The point about housing nails it. UK earnings and taxes are not that dissimilar from other developed European countries. Cost of living is substantially lower in most cases (just compare cost of food, cloths etc in e.g. France). Cost of utilities is much lower again.

What kills it here is cost of housing but to make a drastic change urban population needs to accept that living in flats, not houses, is the norm, otherwise there is simply not enough land to build on within commutable distance to jobs. But this is worse than blasphemy here. Also drastic house price crash needs to happen, either in absolute values or through general inflation, to become affordable. But we all remember how this looked like last time, so will be avoided at all costs.

Re CGT - I believe the discussion is not about 2nd homes, it's about primary residence. This will do well in terms of inequality which so many dreaming about, but the consequences for housing market will be dire.

We need to use the housing estate we have better - much less empty homes and second homes and holiday homes - we seem to have similar levels of housing per head of population compared to many other counties but it's not well used

And tighter regulations around flats - so that the leasehold isn't a burden , so that you can have toddlers rampaging and kids learning a violin without disturbing the neighbours but too many years of low regulation market economy conservative government has done us no favors

Stop it. Its communist to talk about empty homes.

I totally hear you OP. I am not ashamed to admit I had a mini meltdown at work this morning after I read about his definition of ‘working families’. Both my husband and I have dug ourselves out of significantly impoverished upbringings and worked long hours and made huge sacrifices (including living in not very nice areas and leaving family to work overseas for several years) so we could save to put our children through university. That money is now set aside for that time but life feels very precarious now, like I might just need to use it for day to day living if we are squeezed any more…

Taxing capital gains on housing sounds like a nice idea, but there is no way it would happen because it is really stupid idea. It would stop people moving house at all.

Tax person here. How would the ‘middle classes’ be affected directly through CGT increases or corp tax increases (which I cannot see happening)? CGT kicks in on the sale of investments. Since when did the ‘middle classes’ have such chunky investments?

And yes the reason why people in this country begrudge paying high taxes is we are so skint from trying to house ourselves.

And yes Danes have much better public services because lower earners pay much higher rates of income tax. Their basic rate is 10% higher than ours.

You mistyped

We're ALREADY screwed by the current sociopaths

Out of what?

The country?

Tories already took your rights to live and work in Europe

Perhaps they are Rish! or at least like him.
Don't like migrants, but are going to migrate.

When are schools going to teach critical thinking?

What is your definition of "middle class"? in terms of household income? (I do agree with PP who said we should talk about middle earners not middle classes though).

I think it's not unreasonable to assume that by 40s - 50s these middle earners should have some assets apart from their prime residences, e.g. shares. Sale of such shares will generate CGT.
Before you say it won't be a big hit - yes, possibly, if you have £10k profit from such shares sale and they equalise the rate, the extra you'll have to pay will be £1600 (sorry if this isn't precise, I didn't bother to check the latest rates). Yes, on its own it's not a killer, but when combined with all the other extra tax - what's the point of savings/investments/trying to improve your circumstances? The super rich will still afford clever accounting or will move, the middlers are screwed.

To the best of my knowledge the rates for the higher earners in Denmark are lower than here already

@Spendonsend

I think we will hardly notice there has been a change of government to be honest.

That's exactly what I think. Some minor "tweaks" here and there in terms of both tax and public spending, but very much a "steady as she goes" Parliament with not much change and just hoping that the lower inflation and economic growth that we already have will just continue for the next few years.

A bit like Blair/Brown's first term where they'd committed to maintaining the existing fiscal plans of the Tories in 1997. Then as things were getting better, Brown/Blair went beserk in their second term which set up the country with debt (remember Brown's "no more boom and bust"), introducing inflationary tax credits, spunking money at the NHS (borrowed under PFI of course), and Brown repeatedly extending the "economic cycle" as he'd committed himself to breaking even (i.e. not increasing debt) over the economic cycle, but he spent too much he couldn't get borrowing back down to where it was when he started. All that was before the financial crash - we were already pretty screwed before it!

It I don't have any shares, does that mean I am not middle class.

That is good to know.

Absolutely true, those who work will be expected to prop up those who don't/wont to an even greater extent.

I agree, and also do something about all the empty real estate above shops in town centres (and of course the empty shops themselves). At the moment, it's practically impossible to get planning permission change of use to convert the top couple of floors of a High Street shop into a home. Not only do some councils have blanket bans on change of use of town centre retail premises, the building regulations make conversion of single units ruinously expensive, i.e. minimum sizes of rooms inc bathroom and kitchen, angles of stair cases, widths of doors and corridors etc.

People have short memories. They tanked the economy last time they were in, brought in PFI to the NHS because you know socialists are always good at spending other peoples money and penalised drivers to the extreme.

Ill be ok but many who have worked their arses off are about to get clobbered.

I wish you luck OP

I don’t think it’ll just be higher earners. His definition of a ‘working person’ is very narrow. The man of the people Sir Keir Starmer told LBC on Tuesday that it meant: “People who earn their living, rely on our [public] services and don't really have the ability to write a cheque when they get into trouble."

That’s troubling on a couple of fronts. Firstly, how out of touch do you have to be to not know that almost no one has written a cheque since the turn of the century. Secondly, 30% of the population have no savings - so the other 70% of us are Labours targets. That’ll extend down from the middle classes, however you define them, for sure.

If you’re in the south, expect to be hit for more council tax. Expect ISA and pension annual allowances to be reduced. They’d reintroduce the lifetime allowance if wasn’t for the doctors. Expect CGT and dividend tax to be increased, making it less worthwhile to start or grow a business. Less reward for risk. Labours view on work is us all working for big companies or the state - little recognition that over 60% of those employed in the private sector are employed by SMEs, and they make up over a quarter of GDP . Expect fuel duty to be increased. And so on and so on.

The money has to come from somewhere, as the growth they are expecting (hoping for…?) won’t materialise until the second half of their first term. And there’s nothing wrong with that, if they are upfront about it. Most people accept that better public services require 2 things. More money, and in many cases fundamental reform. There is no transparency on either of those things sadly. .

Seriously? you'd be surprised to know how many people have more than one passport. I'd also suggest you check how many countries, e.g. Greece, Spain and Italy so not to travel too far, invite Brits now to live and work there.

And don't get me started about Middle East.

The real worry is that these countries are flirting with highly skilled professionals, those high earners and high net tax contributors here, not shelf stuckers. Emigration of even smallish proportion of this demographic will have dire consequences for the country.

Look here
London drags down UK productivity (ft.com)

London used to have by far the highest productivity in the UK. It's turned negative. What happened in these gap years? Mass emigration of highly skilled professionals driven out by Brexit, not visa restrictions but cultural changes in society. You had to be there to see how bad this was. The next wave will be British highly skilled, this process has already started. It's not only wealthiest who are highly mobile, intellectual elites are extremely mobile as well.

Labour have done a study that demonstrates reinstatement of mandatory housing targets and building will generate over 3.5% GDP, which will provide a massive tax take boost, provide jobs, housing and more council tax. We can build our way out of this mess.
I'm quite happy for taxes to stay as they are, see non doms abolished, council tax go up with inflation and build build build.
I'm far more concerned they will put a tax on pensions as part of inheritance (currently they are tax free vehicles), or that they reinstate the lifetime allowance so everything over £1.1m in a pension is taxed at over 55%. That will see many doctors leave and completely removes the incentive to save and invest, punishing prudence.
I want to vote green but given it's pointless in a FPTP system, it's labour for me. Tory parties, corrupt contracts and lies mean I won't be voting for them again, kinda like how I won't ever vote Lib Dem after they shafted students. Quite like a lifetime grudge lol.

im happy to pay more tax on my earnings if it would improve public services.

I give absolutely zero shits about CGT and anything to do with pensions at the moment. None.

CGT on profits from sale of your home is normal in many countries

The fact that it doesn’t exist here is part of what has massively distorted house prices - because house price gains are pretty much the only way of making money that isn’t taxed (that and gambling )

if you have children in state school or if you use any kind of public service then YABU.

But, I think the rich should be taxed most. It’s not fair that people in the middle are taxed at the same rate as the rich.

Not bringing in a wealth tax and going for the low hanging fruit again is just what this country needs. Bring it on! [rolls eyes so far back, they disappear]

The Tories had to fix the mess left by the last Labour Government. They conveniently forget about that when they bleat on about ‘the last fourteen years’ being a disaster. The disaster happened long before 2010 and Labour are responsible for the necessary austerity that followed.