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!

VAT has been raised 4 times since its 8% starting point in 1973. Each and every rise has been delivered under a Conservative govt.

What other tax rises by recent Conservative govts?

Reduction in entrepreneurs’ relief for CGT announced at Budget 2020
Corporation tax increase Budget 2020
Income tax personal allowance freeze Budget 2021
Inheritance tax threshold freeze Budget 2021
CGT annual exempt allowance freeze Budget 2021
VAT registration threshold for business freeze Budget 2021
Dividend tax autumn Budget 2021
Freeze in starting rate band for savings tax Autumn Budget 2021
Freeze in adult ISA subscription limit autumn Budget 2021
Income tax basis period reform Autumn Budget 2021
Council tax measures Autumn Budget 2021
Freeze in student loan repayment threshold announced January 2022
Increase in Bank Surcharge in September 2022 mini-Budget
Increase in income tax rate in October 2022 mini-Budget U-turn
Council tax measures Autumn Statement 2022
Income tax/National Insurance thresholds frozen Autumn Statement 2022
Inheritance tax threshold freeze Autumn Statement 2022
Income tax Dividend Allowance reduced Autumn Statement 2022
Income tax additional rate threshold reduced Autumn Statement 2022
Capital Gains Tax reduced annual exempt amount Autumn Statement 2022
National Insurance employer threshold frozen Autumn Statement 2022
VAT registration threshold frozen Autumn Statement 2022
Individual Savings Accounts: maintain annual subscription limit at £20,000 for 2023-24 Budget 2023
Starting rate limit for savings income: maintain at £5,000 for 2023-24 Budget 2023

But, yes, it is Labour who are trying to pick your pocket

Yes. How it works in the overseas country I lived in was the rate of tax was set by the borough, taking into account fluctuations in house prices across the country.

This. Totally this.

Which would actually after a short period also reduce any tax burden. So should appeal to both the left and right.

Housing, poverty, and health are interlinked. Insecure and substandard housing costs the state loads in high welfare benefit and healthcare costs.

The way to improve society and help the economy (and lower the tax burden) is by investing in good public services, social housing, supportive benefits system, improved child support system, and jobs education and training opportunities.

People getting timely and effective help need less help and for shorter periods of time.

Question is, do Labour intend to do this? They should.

There's a need to end the false economy sticking plaster approach, that not only harms the less advantaged (and society in general) but also ends up costing more and then higher taxes are needed. So then people get upset and round and round we go, without solving the actual problems by addressing the root causes and main needs.

Yes. How it works in the overseas country I lived in was the rate of tax was set by the borough, taking into account fluctuations in house prices across the country.

@Rubblefrompawpatrol
So unfairly harming the poor who come from areas where housing has been allowed (by government policy) to become too expensive, to the detriment of people from those areas?

Do you think it's right or fair that the millions of lower waged, disabled, and pensioners in London and the SE, suffer even more than they already do?

Fair if someone on the minimum wage renting a shitty flat in the south will pay more council tax, than someone on above average income who owns a nice house in a cheaper part of the country?

Or do you think 'if they can't afford it, they should all just move'? Which ignores family and job commitments, and also large-scale displaced 'blow-ins' would cause huge resentment in the areas they moved to. Pushing up the houses prices there, pricing out other people, adding pressure on jobs and public services. So perpetuating the problems of inequality and poverty and a declining society.

Any council tax changes should be done by taking into account the financial circumstances of individual households (unless people want mass displaced 'blow-ins' which would then increase their house prices and so also their council tax).

Well I could go into why, but I don't think I have the time or the crayons.

I think the concen is not (just) that the rate of CGT will rise but that the thresholds and scope of the tax will change so bringing more middle class people within it's reach. Added to that a worry that use of ISAs and pensions will be limited so that it's hard to put much by in tax shelters.

Of course that is speculation but there are going to be significant expectations for what Labour can achieve for public services (not least from their own ranks), they've ruled out the most obvious taxes and their reliance on growth and clamping down on tax avoidance are also very speculative and won't be immediate. That leaves very few options and the worry that higher PAYE earners who are putting something aside for their future will be the obvious target. Starmer's narrow definition of 'working people' does reinforce that worry.

I wondered if raising money via a city tax for holidaymakers would work here in the UK, as you have to pay it in a lot of European cities when you holiday there. It's obviously invested in that city tho; in Basel we got free transport round the city and reduced entry to some museums; I don't remember getting anything in Rome.
However, discussing this with my dh, he seemed to think that there's no way any UK Govt would let anything stay local and be invested in the relevant city for using their services; if, for example, one city made £3 million from this, he thought any Govt would just say ok, we're reducing your central government funds by £3 million then.
I have a vague memory that Edinburgh were floating this idea but not sure if anything ever came of it.

Is that you Mrs Sunak????

"California, 5th July, plane is booked."

Someone might want to look at the taxes in California :)

Being introduced in Scotland.

I think Labour’s planning to hope freezing the income tax bands and hoping the economy continues its bounce back will fill its coffers. Which is a shame as in order to be truly radical in tax you need a big majority which is fairly rare. He has that, we need better public services, so try radical taxes Keir!

Oh and ‘closing tax avoidance loopholes’ is manifesto speak for ‘we haven’t got a bloody clue how we find this money’. There are no tax avoidance loopholes to be filled that will bring in big money.

As a higher rate tax payer I’m already clobbered as I’m on PAYE. Wealth should be taxed more. CT should be overhauled.

Can any party really fix the issues in this country?

No because most of the population don’t want to acknowledge the issues.

Or, like you, isn't willing to pay to fix them.

I cannot WAIT to have the Tories gone. I’ll pay more tax as long as it doesn’t go towards tax breaks for private schools, to bail out bloody bankers or in some unworkable mad scheme to send anyone to Rwanda.

Yes OP, let's have everything fixed free why not. Two choices. Keep going as things are with 14 years of Tories diverting funds away from essential services as an example of how they operate OR vote them out, pay more tax, get things fixed. Can't have both, your choice.

@Aladdinzane What makes you think changes to council tax. CGT, IHT won’t impact me?

How much more do you think people on higher PAYE tax should pay?

Oh & considering I’ve been paying tax for over 20 years what makes you think I’m unwilling to pay? 😆

Well we could have Scandi rates at the top end?

Labour’s manifesto says they “will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT.”

The manifesto goes on to say “Labour will address unfairness in the tax system. We will abolish non-dom status once and for all, replacing it with a modern scheme for people genuinely in the country for a short period. We will end the use of offshore trusts to avoid inheritance tax so that everyone who makes their home here in the UK pays their taxes here. Private equity is the only industry where performance-related pay is treated as capital gains. Labour will close this loophole.

We will modernise HMRC and change the law to tackle tax avoidance. We will increase registration and reporting requirements, strengthen HMRC’s powers, invest in new technology and build capacity within HMRC. This, combined with a renewed focus on tax avoidance by large businesses and the wealthy, will begin to close the tax gap and ensure everyone pays their fair share.”

I support all of this. Labour’s manifesto does not say they will increase capital gains tax, but I would support that should they as I believe it should be at the same rate as as income tax and not lower as it currently is.

He seemed to say - in fact he did say - ''any one who can write a cheque'' will be taxed - but how, what tax and why? Quite alarming even in the words he used - no explanations - plus the repeated story -
' ''My father was a tool maker and my mother a nurse.... We had to have the phone disconnected because we could not pay the bill....'' .
This is supposed to explain his tax policy? No form of clarification re. what his taxes will be at all.

Well we could have Scandi rates at the top end?

Scandi rates only work with scandi public services though. And to get such services everyone needs to pay more taxes like they do in scandi countries. You need a broad tax base to raise significant revenue.

Did he really mention the Toolmaker thing again?

I genuinely wonder actually if it's increased interest in pursuing a career in toolmaking? Perhaps he could encourage vocational training and apprenticeships for aspiring toolmakers? I'm not being sarcastic. I really do wonder if it's inspired interest.

My fear is that a small number of higher earners on PAYE will be squeezed to death. The rich not on PAYE won’t be touched.

Then all of the money raised will be used to raise public sector pay which hasn’t been increased for a while. Meanwhile there will be no structural or process changes the public will benefit from delivered.

Please do not use facts in this discussion.

Facts had nothing to do with But Jeremy Corbyn, Keir's beer, Angela's house or knowing what a woman is, so why should they with its latest incarnation?

Hiya, close, but incorrect. Have another go.