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/

I got 55% effective tax!

Some of the categories are a bit dodgy (I’m not sure the incidence of corporation tax sits with me) but in contrast to PP I think employer’s NI is an entirely reasonable category to include. Most studies conclude that employer’s NI is effectively a tax on employees. I’m confident at my company it is.

Including stamp duty is a bit odd but on balance understandable. In most years stamp duty will be nil. But last year it was around 25% of our household income. Our blended tax rate was about 75% 😪

Interesting they don’t include CGT.

This was set up by James Watts who founded Brewdog. Big fan of the offshore bonds to minimise his tax. He quite happily took over a million quid from the Scottish government to plant a load of trees which all seemed to die
https://www.thedrinksbusiness.com/2024/04/brewdog-in-forest-fail/

No, I agree now after review and consideration from other posters that it has a number of flaws. I was interested in seeing my hidden total tax bill and the calculator did give me an insight into what might be included in it.

I feel the calculator needs some adjustments to be accurate for sure, but the main point is that I really feel tax on middle earners has got out of hand and is not a fair system.

How much tax would you like to pay @Lovingthehamsterwheel?

I’m a higher rate tax payer. I grew up in borderline poverty, but am fortunate to have had the education and health to be successful at work. In a civilised society the weak are protected by the strong. If you don’t like that, if you want to tar all benefits recipients with the Tabloids’ Brush of Sensationalist Lies, then it says more about you than about anyone else.

The calculator linked shows the PAYE and NI charge to the employee, the NI charge to the employer as well as all the other 'hidden' taxes like the various duties, VAT, council tax etc etc etc :)

No, as I have income protection, I have saved, have a mortgage and pay considerably for a variety of life, critical illness and health insurances.

How do you know your children will put in more than they take from the tax pot, or even that you will? We are all one accident or illness from needing help. All your tax (and more) could be needed to cover you or your children. But we all hope that doesn't happen.

You won’t use the NHS evenly throughout your life though. As a working age adult your cheaper to treat ( on average) 2/5 on NHS budget goes to over 65s. The average over 85 year old is costing the NHS over £8k a year.

Out of curiosity why do you think this is silly?

I didn’t refer to them as I know that I pay them, they’re not hidden though, I literally get a council tax bill every year and see the best part of £400 leave my bank account each month.

I object to calculators attributing employer’s NICs to individuals, or suggesting that SDLT is paid by everyone and in some way hidden.

Dont get me wrong, I pay a shitload of income tax and NICs, an absolutely a net contributor, and I think SDLT and council tax need serious reform.

But these calculators aren’t seeking solutions as to how we can best raise the taxes that we need for a functioning country. If we got rid of SDLT, what would replace it? “Corgi” have no suggestions, no research, no thought pieces. They’re just disingenuous outrage merchants.

YABVU to say that that is the tax you pay on £75k, as if that’s a yearly tax reducing your take home pay. For starters, the calculator includes NI paid by your employer.
And stamp duty? How often do you move house? I get that it’s expensive, we’re moving right now. But I don’t view that as tax I’m paying on a certain salary.

Saying alcohol is optional is missing the point. A person who earns and wants to use their money to get some pleasures in life is pretty much what the money is for. It's no use saying there's no tax of you keep the money under your pillow. Great, but what if I do want to have a drink and go on the occasional international holiday?

Its not silly, mortgage interest means that the banks are earning in many cases double the original loan value in interest, this should be offset against the welfare and housing tax to reduce payments.
It would support the property market.
If I am paying for private healthcare, why should I not be able to reduce my NIS as I am taking strain off the NHS?

You already did 😆

It’s completely inaccurate. It includes employers’ NI contributions, corporation tax(!), vehicle excise duty (which people without cars don’t pay), I could go on. It really amuses me when I see people complain about the amount of tax they pay when the basic rate of income tax was 33% when I started work with 9% NI on top.

10k on welfare but the state pension is around that, so for each pensioner we need someone on 75k just to pay for one of them!
Not to mention all the other people who rely on benefits.
In a way I'm surprised it's so little, but I guess higher earners would pay for more than one person.

But it bases all the other taxes on income, not on lifestyle.

For example mine included tobacco tax. I can guarantee I've not paid this in my life. Also alcohol tax, I do drink a bit, but not enough to be that amount. Council tax, it isn't the right amount and doesn't take into account that I live alone with 25% discount. Conversely, the car tax is too low. It doesn't include tax on utilities which would actually be quite useful. But none of this in real life is based on your income. I pay the same tax on alcohol now I've gone part time at £25k as I did at £83k.

Then it adds on taxes no individual pays like corporation tax and employer's NI.

It's nonsensical.

(Btw, there is no such thing as "pension tax". Pension is income, you pay income tax on it if you're over the threshold)

Well, tax is about 40% of the size of the economy, so on average you'd expect that to be where income goes.

@SlipperyLizard the OBR and most other economists are clear that employer’s NICs are mostly paid by workers through lower headline wages. The OBR thinks about 76% of the recent rise will be paid by workers over the medium term. So the calculator probably isn’t unreasonable to include those in household tax rates.

https://oxfordtax.sbs.ox.ac.uk/article/will-workers-pay-employer-national-insurance-contributions-rise#:~:text=Additionally%2C%20when%20employer%20NICs%20changes,if%20companies%20raise%20consumer%20prices.

As for employer's nic, say you want a wage of £20ph but the employer can only afford £20ph. You'll only be getting £17ph because that's effectively £20ph for them. That's even without taking into account that companies pass along costs to customers.

Diddums

Oh I agree with you. But I’m also open to different perspectives that come from experiences that are different from mine. I think that if you are lucky/privileged enough that you get to be a high earner you end up paying a lot of tax but don’t really get any back - and that can be frustrating!

I don't think I pay enough tax. So I donate to charity instead.

That's a calculator designed to make the tax rate seem much higher than it actually is so that you use it to push a right-wing, anti-spending agenda and get people fired up about those dependent on benefits. It includes as 'our' contribution Employer's NI contribution. No wonder you didn't want to post the breakdown. Nice try, OP.