To not be happy about paying this much tax

[Lovingthehamsterwheel]

Name changed to enable objectivity.
I just saw this new tax calculator that shows you how much tax you are paying in total, including all hidden taxes, council tax etc

For a Person on 75k a year, 44 percent of earnings go on tax.

10k of that is spent on welfare.

Am i being unreasonable to think this is absolutely a terrible time to be alive in terms of taxes in the UK. And it is no wonder higher earners are leaving the country.

tax.corgi.global/

Well it is really. You have to have 35 years contributions - and then carry on paying for the rest of your life. It makes a complete nonsense of the qualifying years.

But you don't stop paying after 35 years now - sorry am I misunderstanding your point maybe?

The whole system is a nonsense already for several reasons.
A lot of pensioners seem to think that they have a special pot of their contributions waiting and, therefore that the state pension is not a benefit when it is. They were admittedly 'mis sold' things rather. Also, people who have claimed a range of benefits and have taken rather than contributed also get their NI contributions. People who haven't worked are still able to claim pension benefits, housing benefit, etc so the whole contributions linked thing doesn't make sense there either.
I think it's been established that the current pension funding is unmanageable already and unsustainable in the future and will therefore need to change to the detriment of the young. I suspect they will merge the two taxes (IT and NI) and make everyone pay them, which would at least be fairer in terms of everyone paying the same tax rates. I think the Tories tried to reduce NI gradually with a view to doing this. Unfortunately, there is a big concern. As many younger people have realised, they simply won't be eligible for a state pension, despite paying all their tax. I think the Tories were effectively introducing this via the back door by reducing NI, so decoupling it from the state pension.

Exactly. So paying for the rest of your life would be even more ridiculous.

A lot of pensioners seem to think that they have a special pot of their contributions waiting and, therefore that the state pension is not a benefit when it is.

This is a complete myth. That isn’t what any pensioner I’ve ever known thinks. But it wouldn’t be surprising if they did given the link to NI contributions. If NI was abolished/incorporated into general income tax a new way of ascertaining entitlement to the state pension would be needed. I’ve never seen a credible suggestion as to how that could be done. And anyone who thinks any government could get away with increasing income tax for pensioners by 8% is living in lala land. Look what happened when they had £150 taken away from them last year.

The thing is though WHY should pensioners be paying a lower rate of tax than everyone else? (and landlords and investors) maybe it might be tricky to figure out how to make it work but surely a tax code could just have a letter added to it on HMRC systems to show that someone had now paid enough contributions to be eligible for full state pension. I really don't see that it's an insurmountable issue. And for generational fairness it's something that really does need to be looked into.

Once somebody reaches a certain age they get put onto a C code and don't pay any more national insurance. That seems fair. I don't see why they should not have to pay tax as well.

Presumably you and your friends are more educated/intelligent than most then but you are not the majority. There was a recent thread on here complaining about this and whenever this issue is raised on SM, there is a multitude of comments about how the state pension isn't a benefit.
It's inevitable that the way the state pension is delivered will change but, of course, no government wants to say this. Nor do they want to tell pensioners that they will need to pay more tax, even though they will. I agree with you that a lot of pensioners (not all) are very entitled when it comes to their benefits. There was a crazy amount of drama over the WFA. It's likely that politicians will essentially be forced to cut down on benefits as well as increasing taxes by some sort of crisis.

It would be easy to affect but no government has the balls to do it so far. As I say, I think only a crisis will lead to these sort of difficult changes.

Well I think we're well on our way to a crisis so you never know! If the government would bring in compulsory voting it would help balance out the pressure from the grey vote and make everything fairer. They won't though.

It wasn’t just pensioners who created drama about WFA, the outcry in mainstream and social media about “freezing pensioners” was insane. That was about £150, no government having seen that would ever entertain the idea of a tax increase of 8% that applied virtually solely to pensioners. It would be electoral annihilation.

Unless we had compulsory voting...

And actually the WFA allowance is nonsense anyway! Why are pensioners more vulnerable than say newborns? If pensioners get it then households with an under one should as well! No skin in the game here. My youngest is 11.

You’re assuming everyone below pension age would vote for a government that made that change. It’s perfectly obvious from the outcry about WFA across all age groups that isn’t the case.

Now go at look at what the tax would have been on the equivalent income in the 1980s. 50%+.

We are comparatively lightly taxed in the 21st Century.

My parents are in their 70's and still run a very successful business. They are millionaires. Why the hell should they get a winter fuel allowance or not pay tax on their income?

Their current bug bear is inheritance tax, mum never stops going on about Starmer anihilating their pension (which at age 72 she isn't even drawing yet) and inheritance tax. Why is she worrying about inheritance tax, she'll be dead. Either spend the money and enjoy it whilst they are here, save it for the best possible care should they need it in the future or leave me to worry about inheritance tax.

That’s always been my rationale about inheritance tax @Comefromaway. It baffles me that people are so angry about a tax they’re never going to pay!

Labour will v likely lose the next election anyway. I always assumed, before they won, that they would serve one term and then Reform would have a chance to fail too! As I said, no party will make 'difficult choices' by choice but because we have a financial crisis.

I totally agree with you and @BIossomtoes last comment. I find the attitude of a lot of pensioners to IHT and their benefits totally bemusing. I also don't understand why the inheritor should be angry about IHT either as this is free money for them. By all means, get angry about paying extremely high tax rates for working hard every day, contributing to the economy and providing a (depending on your job), a useful service. This should be incentivised, not punished. IHT is a windfall.

The calculator isa bit shoddy I agree, but the general point that we pay a lot of tax is very valid. Welfare costs particularly are rising faster than we can afford and if people can work then they should.

As it stands, unless my parents end up needing a lot of care, I’m going to be very wealthy when they die.

but it’s not my money. Yes, they built up their business from nothing having come from working class backgrounds but they’ve helped me a lot in my life with house deposits etc. and they’ve helped their grandchildren. I have a pretty good standard of living, I want to put back into society by paying my taxes. Anything I get is a bonus, not a right.

@BIossomtoes

If NI was abolished/incorporated into general income tax a new way of ascertaining entitlement to the state pension would be needed. I’ve never seen a credible suggestion as to how that could be done.

The existing system provides for that exact scenario. We already have a system in place whereby people are granted "credits" despite not paying NIC, i.e. for periods of unemployment, for periods of caring responsibilities, for lower wage earnings not earning enough to pay NIC (But earning over the lower limit for qualifying for credits) and for self employed to gain credits for class 2 NIC despite not paying class 2 NIC as long as they earn over the threshold.

So your "credible suggestion" is already in place. The system is already in place via PAYE (for lower wage earners). Relatively simple to tweak the existing system so that no workers pay NIC but still get credits by increasing the threshold from the current £12.5k (under which no nic is paid by credits are granted) to either infinity (perfectly easy via software) or keep the 2% additional rate on earnings over £50k but raise the £12.5k to £50k, so that no one pays the main rate of employee NIC.

Nothing impossible as, like I say, we already have the system in place of credits for NIC with no NIC payable. I'm surprised you didn't know that!

A lot of OAPs are a weird bunch at the moment. Their sense of entitlement is astonishing, considering most lived through (and massively benefitted from) the pretend financial growth and largesse of the 90s and 00s with endowment windfalls, windfalls from privatisations and demutualisations (which THEY voted for!), historically high wage increases, historically high returns on investments, buying council houses at a massive discount then selling at a massive profit, etc. They're a generation who were handed money on a plate. The younger generations will be paying for it throughout their lives because it was all built on borrowing and debt. They're obsessed about inheritance tax because they're obsessed about giving huge sums to their kids once they're dead - they'd be far better helping their children and grandchildren NOW, when they need it, and when it would make a massive difference to their family, rather than sitting in bank accounts earning tax free interest whilst their families are struggling to afford to live due to high living costs, stupidly high housing costs, etc. Never understood the "you'll benefit when I'm dead" nonsense of the older generation.

The credits system is one of my biggest issues with it. I'm not from the UK and I find this to be such a fantasy way of designing a retirement system.

People essentially get magic tokens that they "pay in", which are not related to the actual amount of physical cold hard cash required to fund a pension system mathematically, just moral good vibes. I'm not denigrating the moral value of, say, caring responsibilities. But it's not money.

Then they are surprised that there is no money even though they "paid in".

Either just call it a benefit (with moral qualifying criteria if you want), or have it actually linked to the money going in (tax receipts and/or individual payments into their own pension accounts).

This obsession with using the LANGUAGE of capitalism without the corresponding hard financial underpinnings is why the economy is such a shit show and there is such poor financial literacy. How can anyone be expected to understand what's going on, when what's going on is magic beans?

@OneAmberFinch

Either just call it a benefit (with moral qualifying criteria if you want), or have it actually linked to the money going in (tax receipts and/or individual payments into their own pension accounts). This obsession with using the LANGUAGE of capitalism without the corresponding hard financial underpinnings is why the economy is such a shit show and there is such poor financial literacy. How can anyone be expected to understand what's going on, when what's going on is magic beans?

Nail on the head. Especially the magic beans comment. Unfortunately that mentality has gone all through the public sector by using "pretend" money for one quango to pay for goods/services provided by another quango. I.e. the "internal market" in the NHS where trusts compete for money from other trusts and pretend values are assigned to treatments between trusts and quangos etc. Same with the nationalised railways where one govt owned quango is "fined" by another govt owned quango for delays etc. It's all a complete farce. All started with good intentions to try to get the public sector more efficient by enforcing "market" forces, but it doesn't work unless it's a genuine open/free market, which it isn't. So stop pretending you can instill capitalism into the public sector, because you can't unless you have proper competition (between real firms, not quangos/trusts) for which you need an open market.

We're starting, thankfully, to see the disastrous results of applying capitalism to restricted/closed public sector bodies, and sooner or later, the whole thing will have to be dismantled and returned to either proper public sector (without all the pretend competition) or genuine open competition to challenge the stranglehold of the public sector.

Likewise, back to PP, we need a more open/transparent way of funding and paying state pensions. But I think that ship's sailed and I agree with most younger workers who think there won't be state pension for all when they come to retirement, hence them paying TWICE, once paying NIC for which they'll get no benefit and a second time for workplace pensions which is what most will have to rely on in their old age. It needn't have been like that, but successive useless politicians have failed to grasp the nettle and deal with the retirement timebomb.