To think we can’t revive the country on the backs of the poor, the struggling, or the middle class?

[ForBreezySloth]

Every time there’s an economic crisis, it seems like the burden always fall on the same groups - through tax hikes, cuts to services, and stagnant wages, while the wealthiest remain untouched. Surely a country can’t truly recover if the majority of its people are struggling just to get by? Yet time and time again, we’re told we all have to “tighten our belts” - except, conveniently, those at the top.

AIBU to think this approach isn’t sustainable or is it just the reality of how economies work?

I just checked and was shocked to learn that the top 1% earn 160K or above. Obviously there needs to be a new tax category because by no means is that super rich.
My apologies. Perhaps the OP was not aware of that either.

Ok we’ve recently had a GE that used the same lines on ‘broadest shoulders’ and teachers plus food backs and taxes have gone up.

Taxes on businesses which isn’t working, it’s squashing growth which means you’ll need to tax more. Why is that good?

If the answer to higher taxes not working is just load up with more you’d have to hope that’ll actually work not just squash growth even more. On the plus side there’s a new party who is saying what you are, so there’s people to vote for.

I’m not a ‘high earner’, my DH is. This really explains it so well. I agree that everyone should pay a ‘fair’ share of tax. Unfortunately the very wealthy will always find a way out of paying their way so you are mainly left with high earners to pay these high taxes. We have to pay our own nursery fees and we can’t afford
to have another child but in a team that I was managing where everyone was earning less than me, they had more children mostly 3 each, and more benefits. I’m also on statutory maternity pay cause I feel pregnant after changing jobs so that is a full deduction in pay on us as a household. It’s so sad, but I think you can only know what’s fair when you know what the other person is going through. I wouldn’t consider my husband being asked to pay more tax at this stage to be fair cause we really can’t afford to stretch ourselves anymore. Right now a family with 2 individuals earning full pay and getting extra benefits, nursery paid for, with housing paid for by the government is probably better off than someone in my situation. Some of my husband’s colleagues have left the country and some have cut down hours and the stories are the same everywhere.

We could go the Nordic model and tax everyone, including the poor, more........They have higher VAT and lower tax thresholds, more people pay higher rates if tax, but get better services.

Your posts are impressively well reasoned. You're kicking ass. xx

Fair point on the GE, it’s true that tax hikes alone won’t solve deep systemic issues, especially if they’re poorly targeted. But the real question is what kind of growth are we prioritising? Growth that concentrates wealth or growth that strengthens the foundations, like healthcare, education and affordable housing?

Raising taxes on working people while allowing capital gains, large inheritances and mega-corporations to slip through lightly isn’t a recipe for sustainable progress, it’s imbalance. The issue isn’t just tax levels, it’s where we tax, who benefits and how we reinvest. I’m not against growth, I just don’t think it should come at the cost of a functioning society.

I suppose I agree OP, but I don't really think it can be done on the backs of the rich, either.

The ones that are in the highest tax bands are already paying an extraordinary proportion of their income into taxes. At a certain point, more will mean people are disincentivised to work, or they move away - especially people in key careers like medicine where there is a lot of demand. (Or, they will see the many years of training and slog to do it, and decide it isn't worth it.)

And there is an issue of fairness, I think.

With the super-risc, they are not going to stay and be taxed, that class of people are effectively international, and their sources of income aren't straightforward in the way they are for most of us.

And this, imo, is the real problem. Not the international people, it's the international economy. Globalism is the reason industry and well paying jobs don't exist at lower levels as well, and why unions have no serious ability to negotiate for more for the working classes.

No country really has much ability to affect their national economy, they are too enmeshed in the larger global economy and banking system. Nowadays, even the left wing parties seem desperate to maintain the globalist consensus, so it doesn't look to me like anyone is trying to change it. Maybe the Americans, but god knows how that will turn out.

It’s a catchy story but it misrepresents how taxation and public goods actually work. In real life, wealth isn’t just “earned” through hard work and beer rounds - it’s also concentrated through inheritance, capital gains, tax loopholes, and access to opportunity. The poor aren’t freeloaders at the table - they’re the ones pouring the drinks, cleaning the bar, and still struggling to afford a seat.

very true

Those with the broadest shoulders carry pretty much everyone else. They're also mobile.

This is such 6th form "tax the rich" politics.

I earn in the top 1%. I'm also a single parent of two small children who cares for an elderly parent. I can't take any more tax; I'm barely breaking even with the various pressures I'm under.

The whole top 1% pay 30% of tax is based on income tax. The cliff edges are wrong. However as I said a lot of the rich are not on PAYE hence why

"the average rate of tax paid by people who received one million pounds in taxable income and gains was just 35 per cent: the same as someone earning £100,000. But one in four of these paid 45 per cent – close to the top rate – whilst another quarter paid less than 30 per cent overall. One in ten paid just 11 per cent—the same as someone earning £15,000. The rich, it seems, are not all in it together."

just checked and was shocked to learn that the top 1% earn 160K or above.

And this is the issue. How can 160k make you the top 1%? because that's based on income tax. A MC law firm partner earning 2.5m a year is not on PAYE.

THIS !!

im no expert but I think statistically the only way to raise tax revenue is to lower taxes. Walk down the streets of London. Dubai is chuffing hot in summer!! People want somewhere to go.

I’m not really getting the first part. The growth we need is incentivising a stronger private sector to pay for the public sector. This Labour are quite new in not doing that as even the last Labour gov realised you needed a private sector growing to do much spending.

Otherwise it’s tax and borrowing loops, which we’re starting to see.

On who to tax corporation tax is high enough, look to lower CT countries and how they benefited, or did you mean something else? CGT was just increased and it reduced tax take as behaviour changed. Not sure about inheritance.

If you’d like system change Corbyn’s party is pretty much saying the same, but remember you can’t close off people leaving for more attractive tax countries do you and he will need to think about that.

I agree with you. The rich employ a lot of people to work in or on their big houses.

They spend a lot on eating out, invest a lot, give money to charities and good causes and their staff and the businesses they use, then go on to do the same.

Plus a lot of rich people own very profitable businesses, and those businesses buy goods and services from
other businesses, they also employ people from senior executives and managers to office staff and cleaners - can people not see a pattern?

Not only will these rich individuals
and their families up-sticks and leave the UK, their personal staff and trades people lose jobs, we also run the risk that they will take their businesses with them to another country and so the above lose jobs, lose trade, lose contracts, and they then have to make people redundant.

How can people not see this? We need wealthy people in this country as people on low income and benefits pay hardly any tax, certainly not enough to make a difference.

Amazon, Facebook, Google and their ilk do not pay their fair share of tax in this country. They use loopholes. What would be far better is to negotiate a tax with these countries. If they don’t comply then ban them.

rather than go after families that do earn 6 figures but pay a lot in income taxes, why not talk about these companies instead?

I'm a SAHM but my DH earns in the top 0.1% in the UK. We left for another country a couple of years ago. In the aftermath of brexit and covid it was easy to see the UK's economy would struggle, and I predicted high inflation, higher taxes and a reduced standard of living for everyone. We made the decision to move abroad, basically anywhere else would have worked. His income was less at the time (still in the top 1%) but we have a bigger house, more disposable income, better access to healthcare (yes it's private, but what we spend on private healthcare is vastly less than our tax contributions to the NHS, and we can see our GP in person the next day, another GP same day, specialists 2 weeks out and surgeries are booked at our convenience).

The money we spend on a cleaner, gardener, private school is now spent on those things in another country, not the UK. Why shouldn't we prioritize our family's well-being? Had we stayed, the salary my husband is on would be substantially less - UK salaries are low, cost of living is high, taxes are high. It's a global world and the UK is not looking attractive to those with options.

I don’t disagree that a strong private sector is important - we do need productive businesses and innovation. But growth that relies on shrinking real wages, precarious work, and weakened public infrastructure is a short-term fix, not a long-term strategy.

On corporation tax and CGT: it’s not just about headline rates, it’s about loopholes, exemptions, and avoidance structures that allow the wealthiest and biggest firms to shift profits or reclassify income. Plenty of small/medium businesses pay proportionally more than multinationals. That’s the imbalance I’m getting at.

And sure, some might move but we shouldn’t be held hostage by that threat. If the price of a fairer society is that some ultra-wealthy individuals opt out, maybe we’re asking the wrong questions about loyalty, responsibility, and what kind of country we want to be.

I don’t disagree. There are also plenty of builders. (Some earning millions) gardeners and cleaners working cash in hand. A tax system is only fair when everyone pays it. (Rich and poor)

I actually agree with a lot of this. Multinationals like Amazon and Google exploiting loopholes while benefitting from UK infrastructure is a massive issue. Closing these gaps would raise billions without touching ordinary earners.

But I don’t think it has to be either/or. Talking about fairer taxation isn’t about “going after” people earning six figures, it’s about asking honest questions across the spectrum, especially at the top. Because right now, we’re told nurses and teachers need to tighten their belts while corporate profits hit record highs and real wages fall. That’s not sustainable or fair.

This and RR has already driven so many non doms put of the UK. They were already higher rate tax payers, now they pay lower taxes in other countries.

We should be doing the opposite to attract wealth and money into this country not scare wealthy people off.

We need to offer cheaper corporation tax to attract more businesses into the uk and these businesses will therefore employ British people.

Reducing NI to lessen the financial burden on businesses would help too.

Ultimately, taxing people does not and will not fix the deficit in this country and never will.

The only way to generate money and bring prosperity and wealth into any country is by supporting its businesses and making this country attractive for wealthy people.

I am curious how this affects their economy more generally? Does it mean people have less to invest in things like business, or homes, for example?

If you are taxing business more, how do you think that is going to make them pay higher wages?

For public companies, higher corporation tax and the closing of loopholes and avoidance methods could perfectly well be borne by shareholders, not employees. I'm sure there are levers that govt could pull to encourage that.

Random other points:

There will be a taper of 1%ers leaving. They won't all suddenly go overnight. It's moot how much 1%ers spend in the UK other than on property speculation. Trickle down is not a fact.

Do we really think Amazon are going to leave the UK if we raise corporation tax and - more crucially - close their loopholes. Of course they won't, we are a huge market for them. This will be the price of doing business for them - like a tariff, haha. And if they are forced by tax hikes to raise their prices below the artificially low ones they have now, then some of that spending will go to smaller UK businesses instead and create growth at that level.

Multinationals in particular should not be subsidised by the UK taxpayer via Universal Credit to top up the unsustainably low wages they pay the UK taxpayer.

The shadow economy - cash in hand etc - is 10 (TEN!) percent of the UK economy. We need a change in culture (no more middle classes paying cash for their extension) driven by effective communication to voters about who's benefitting and what it costs the rest of us, combined with a couple of years of very targeted HMRC prosecutions to get the message across to the self-employed business owners that we're all subsidising.