To think the UK unfairly taxes families?

[OwnGravityField]

I have just found out that the UK is an outlier, in that it completely stops collecting a form of social tax (NI in the UK) once someone gets to pension age.

In every other country, pensioners’ contributtion as a proportion of income is much more similar to working households.

Example of disparity in the UK:

A working person earning 25k pays:

• Income tax: £2,486
• NI: £1,002
• total = £3488

A pensioner with an income of 25k pays only:

• Income tax: £2,486
• no NI
• total = £2486

So, a UK worker on 25k pays 40% MORE total tax than the pensioner (the difference between 2486 and 3488).

Let’s compare with a beloved utopia of fairness, such as Sweden: worker on similar salary pays 9% more tax than a pensioner.

Yes, other countries have slightly larger differences, but none except France come anywhere close to the UK difference in tax treatment between workers and pensioners.

In the interests of balanced sharing of info: France is tax and spend basket case. France taxes workers roughly twice as hard as pensioners. It’s obscene and the country is practically bankrupt.

Most other European countries narrow the gap by keeping small health or social contributions on pension income.

You might be thinking most UK pensioners don’t have 25k coming in? Nope. 3 million have individual incomes of 25k or more.

Anyway, I think it’s shocking that people at the most expensive time of their lives (kids, mortgage, food) are taxed so much more heavily. AIBU?

They pay tax on their pensions. Are you genuinely too thick to google this?

I agree with you. Poll tax, which was based I think on numbers in a household, was much fairer. You could have a multi generational household with several adults paying not much more than a single adult household. A house with say 4 adults and 6 children will use a lot more council services than a house with 1 adult and 1 child. More cars on the roads which councils maintain, create more rubbish for council to collect, need more school places for council to fund. But there was a huge revolt against that!

@Bushmillsbabe

We were in a different world when the poll tax was introduced. Prior to its introduction rates were included in rent. Once the poll tax was introduced renters had to pay this significant additional charge on top of their rent. Of course landlords didn’t reduce the rent to reflect the fact that they were no longer paying rates.

So homeowners and landlords either the same or better off (especially landlords)

Renters, all without exception, worse off to a significant degree. People just didn’t have the money to pay it.

This was before the “buy to let” market existed. If you rented it wasn’t through choice. You were already poor as if people had the money in those days they always bought. This is what Mrs Thatcher tapped into with RTB.

i do think it potentially could be revisited now as we are not moving from a situation where “rates” were inclued in rent. Everyone now pays their own council tax whether owner or renter.

Poll tax was grossly unfair. Two pensioners paying the same as couples with school age children and using a fraction of the services. Anyway it was enough of a disaster for it never to be on the table again.

The poll tax was the epitome of a regressive tax so it was very 'fair' to the wealthy widow rattling around in a mansion. Meanwhile, the family who were forced to live frugally, three generations together, say 6 people paid 6 times as much. It was literally a punishment for the poor who were trying to live frugally, within their means.
With regard to the single person, it depends. Should the wealthy widow in the huge mansion have a larger discount than the poor widow in a tiny flat? That's clearly not fair.
I agree with @GertrudePerkinsPaperyThing's point about CB for single households though. It's particularly unfair to those parents who have been widowed at a young age and have no possibility of CM.

The difference is the ease of broken relationships. Previously, if you left your husband you paid for yourself whilst now they expect the tax payer to fund their choices. This fuels that option and people choose relationships with little thought of the long term.

Why, if they leave should they get government help? They should get the same help a long term single person gets. We have a two tier society of single people.

I believe the two child benefit cap should stay. What should happen is increased tax breaks for those in long term employment. Not benefits.

I think the poll tax was fair. Councils are not receiving enough council tax now because of too many exemption. Remove all exemptions and make each individual pay. It is ridiculous that a house consisting of couple with three adult children pays the same as a couple.

Ah, but what happens if the man leaves you? What happens if your husband dies? Should we have a three tier system for single parents based on your judgement of the morality of an individual's single status? In all your judgement, you seem to forget that it's actually called CHILD benefit.
No one gets extra child benefit because they leave. In fact, the current situation is that the single parent has half the household threshold of a household with two parents. It's a major disadvantage. A single parent, whose husband left her, for example, who works really hard and earns above the income threshold loses her child benefit.

The poll tax was only 'fair' to the wealthy in huge houses. It was completely unfair to the frugal poor. It was a hugely regressive tax (see post above). So many of the population agreed that even Thatcher had to back down.

Disagree. couple v couple plus 3 adult children. Both examples live in £350K property and pay exactly the same council tax. How is that fair and none of them are wealthy.

Insurance? The point is the current system encourages this behaviour which means there are far too many cases.

I think pensioners should pa NI. But thepersonal allowance should be raised for everybody and means test more benefits.

Well the couple are wealthy enough to live in a 4 bedroom house. They have the option to downsize to a smaller home and pay less tax. The family with the couple plus three adult children are likely to be all living together because none of the adult children can afford their own home. They have no other options. As I said, the poor, who are trying to live frugally and survive should not be punished.

The system does the opposite of encouraging 'this behaviour' doesn't it. As has been discussed, the single parent has a lower income threshold, even if they strive and strive for pay rises!

I've no idea what behaviour you are referring to. The stupidity of losing your husband to cancer in his 30s? The foolishness of having a cheating or abusive husband? It's not for any of us to play God. As I said, child benefit is for children, not a tool to punish single mothers or fathers with.

The two child benefit cap is nothing to do with child benefit which can be claimed for an infinite number of children. The cap is on the child element of universal credit.

If you have children and a husband, it is always prudent to invest in life insurance.
As for fathers who do not support their own children financially, our system is far too lax. HMRC should have a lien on all their earnings. Take it straight out of PAYE or benefits from father directly. The risk should not be on the taxpayer.

I think the older generations have been grandfathered into life, but the downside is that entire generation of people are dying off now. Future generations won’t benefit from the same level of financial freedom.

What does this mean, please?

If you read my posts, you will see that I haven't mentioned two child caps at all. I've made several other points though.

Absolutely, absent or non resident parents (usually men) should be forced to support their own children. As you say, it should be taken direct from their wages/benefits and they should be punished if they try to avoid this responsibility.
It's interesting that @Marshmallowsoftness didn't make this point but was keen to cast judgements on single, female parents.

Actually I think the father should pay. BOTH parents are responsible. Neither should claim benefits.

If you were to draw a pie chart of where people spent money now compared to the 80 & 90's some things like housing would be much more expensive now after adjusting for inflation. Some things are much cheaper, I remember BT phone bills easily being over £100 a quarter, whereas you can have unlimited phone calls now for £5 a month.
my parents spent £500 in early 90's on a Sony video player whereas today a fire stick is less than £50. So it's not surprising people have more cheap stuff. You can't live life nowadays without a smartphone. The government expects you to have one.
Were my boomer parents wrong for spending money on luxuries like this? They were a fairly careful single income family in the southeast on a good salary. We could have nice two week summer holidays in the UK or abroad.
They're now the kind of pensioners who can take a few % increase in income tax. Remember 25% of them are millionaires. Maybe next time that might mean they chose to buy an iPad rather than an iPad pro, but their heating is on as high as they like.
The winter fuel allowance if had been removed from pensioners like them would not have caused the same upset.

In my view, all men should have to pay a tax levy (maybe 0.5% or 1%) to cover the costs of:

• male violence to people & things
• male irresponsibility re paying for their own children

My utopian tinking is that within a generation, it would become so socially unacceptable among men to cause expensive damage to people/things, or to abandon your DC, that we wouldn't need the extra tax, in say 100 years. THe good men would put pressure on the irresponsible violent men.

But, - one may say I'm a dreamer.

Bloody glad you're not in charge then.
Most men are not violent or desert their families. Some do / are, sure. But not most.
FWIW my mother deserted us when we were kids. Moved to another country and left our dad to deal with the fallout. We were aged 3 & 7. Its not only men that do these things, nor is it most men.

It really depends on whether we consider council tax as use based

and it already does. New buildings are taxed on bedrooms. More bedrooms = a higher tax band
because the occupancy will be assumed to be greater.

Council tax services increase in need by population