To ask how much you think income tax will rise by?

[Wonderofwimbledon]

We’re absolutely financially at our limit… I’m so incredibly stressed. An income tax rise will break us and we won’t be able to afford it. We won’t have money to eat.

What do you think it’ll be? I just want to curl up and cry- we can’t take anymore increases our bills , mortgage everything has increased we have no spare money at all

Exactly. Well over 50% of my council tax is spent on social care, and the majority of that goes on the care of children. It's unavoidable, whichever party is in power at local or national level.

And is paid out of income which has already been taxed at a higher rate for higher earners.

Layer upon layer of redistribution...

Not just for higher earners. It applies to numerous taxes - never heard of VAT?

The expression " working people" can be shorthand for working class people.I do not think it is being implied that people earning over 45k do not do any work.

And VAT disproportionately affects lower earners.

VAT is flat - based on what you buy.

It's the progressive tax- ie redistribution - multiplying up that is deceptive and wrong.

No, it really doesn't. That's a trope.

Think about it: everyone pays it, based on what they buy. The things you don't pay VAT on - food, children's clothes - are essentials bought by everyone.

You just don't like that isn't yet another layer of redistribution, and everyone has to pay at least a little bit of tax!

In a previous thread on council tax we saw that the per person ££ take on larger properties ( not H as that’s a wider variety of prop sizes and impossible to calc) based on number of bedrooms was was higher

So those larger properties are already paying in excess per person

Of course it does. It's harder for people on lower incomes to afford things in the first place. And there are some things they have to buy that incur VAT and it takes up a larger proportion of their income.

Labour didn’t mean working class people. They clearly meant working people
ie those who work and live off their income

Say someone in a smaller house - which we tale as proxy for having less money pays 2k council tax versus someone in a big house (proxy for having more money) pays £4k. And the house size is just a proxy for having more money - and a way of squeezing in more redistribution - they're certainly not consuming any more council services!

Great - say the socialists- those with more money are paying twice as much!

But the sting is that it came out of taxed income. The lower earners pays 20% tax, so they needed to earn £2500 to pay that tax But the higher earner pays 45% tax, so they needed to pay £7300 to pay the tax.

The redistribution has multiplied up: the higher earner is actually paying 3 times more council tax, rather than twice as much. But some of that ratcheting up is hidden away, in the multiple layers of redistribution.

The really galling thing is that those who benefit from the ratcheting up redistribution often aren't good enough at maths to understand it. So they still parrot the 'rich people need to pay their fair share' nonsense, which is through-the-fucking-looking-glass backwards.

Whereas those who are paying far, far more than their fair share are often good enough at maths to see right through it.

It works for the populist socialists I suppose. Just not for the economy.

Plus based on bedrooms those in larger properties already pay more per person

a larger proportion of their income

So you're expecting yet another layer of redistribution? 😂

It isn't an income tax, it's a sales tax. You pay it based on what you buy.

The redistribution already happened on the income you are using to buy stuff.

True but councils need to fund their services somehow.

I know it's a sales tax. And it's harder for those on lower incomes to afford that expenditure.

If you understand it's a sales tax, then why are you complaining that people on lower income pay more VAT as a proportion of their income, which is simply because they spend more of their income?

Why not instead recognise that they pay less VAT as a proportion of their purchases, because their purchases skew more towards non-VAT items.

And that making essentials exempt from VAT - which lower income people buy proportionately more of - is already redistributive.

And that making essentials exempt from VAT - which lower income people buy proportionately more of - is already redistributive.

That would only be true if VAT was levied only on products above a particular price point. As it is people at all income levels have to clothe themselves, fill their cars with petrol, buy cleaning products and replace worn out household items. It’s a regressive tax that hits those with the least money hardest.

Exactly - people at all income levels have to clothe themselves, fill their cars with petrol, buy cleaning products and replace worn out household items.

Lower income people don't have to do those things more than higher income people.

So how can it be regressive?

As a proportion of what they buy, remember. Since it's a sales tax.

Income tax has already been applied to take from people based on their income.

I’ve just explained why it’s regressive. I’m not going to repeat myself ad nauseum.

Agreed. There's no point.

Looking at VAT in the long term it’s questionable whether it is regressive for the majority of people in their lifetime

Lifetime income vs. current income:
Some analyses suggest that VAT is less regressive when considering a person's entire life. Over a lifetime, a household's expenditure must equal its income (excluding bequests). Those with temporarily low incomes who are spending a lot are likely borrowing or using savings, and their lifetime VAT burden is closer to proportional to their lifetime income.

Proportionality by expenditure: When measured against a household's total consumption rather than its income, the VAT burden is more proportional across different income levels.

Mitigation policies: To reduce the regressive impact, governments often apply lower or zero VAT rates to essential goods like food and children's clothing.

Therefore
While the simple answer is that VAT is regressive based on current income, a more nuanced view shows that the effective burden is more complex, varying based on the time period analyzed (current vs. lifetime) and the inclusion of tax relief measures for necessities.

Regressive as a proportion of income, not as a proportion of sales. On a sales tax.

Is selling things in a shop regressive, would you say?