To think the problem with wealth inequality is that rich people don't know how rich they are?

[Neeroy]

Article in the Times today saying that people earning six figures 'don't feel rich'.

Because they are surrounded by six figure earning peers they are comparing themselves to people who have more rather than the 90% of the population that have far less. This is why the budget is poorly received in the news, because rich people think they already shoulder too high a burden when in fact compared to everyone else they still have far more disposable income. Even if they have to cut down on the number of holidays they go on. They aren't sitting in the dark under a blanket. Or only making food that doesn't require turning on the oven.

I don't think they realise how so many people have to live.

www.thetimes.com/article/1fb46414-8f65-436f-8f95-451d69626148?shareToken=8061d939633164c0dfbd805240c8e008

The only way to have any form of a functioning society is to have competitive capitalism.

Do we have that though or does the government often have to step in to prevent certain companies collapsing?

I really wish people would quit their envy and realise that just because someone has money, it is not stopping you having money. It is not a pot with limits, it can grow - and then there is more to go around for everyone.

I would argue that it's a lot harder for the young of today to accrue wealth seen in older generations. Successive government policy has prioritised the young over the old which again has hampened productivity.

I am not sure many people are really thinking through what will actually happen if we keep punishing people who make money with more and more punitive taxes.

Who pays though? I feel I get a raw deal as a higher income family and think costs should be more spread around.

We have an ageing population and a tax model that doesn't support that.

Is there though, is what I'm asking? How many model villages were there? How many people living in those model villages lived into their 80s (life expectancy today)? How many of them lost limbs in machinery? How many died of black lung or similar industrial illnesses?

I suspect that you might be idealising the past; that's why I'm asking for your data on this. We do have a tendency to idealise the past, and that's why I want to understand the empirical data on which you are basing this. Happy to be told I'm wrong, but not on the basis of feelings and anecdotal evidence.

@pocketpairs that poster is looking at a one bed flat, why would that be a big house?!

@HornungTheHelpful sorry you have lost me? What are you asking for data on? Have you confused me with someone else?

You are arguing there is no exploitation today, I just said imo there is nuance.

I haven't said the past was perfect but we were certainly more productive. Housing is a big part of increasing productivity or do you disagree with that?

Being a high earner and being rich are different. Taxing earned income is different to taxing assets. It’s too simplistic to look at wages to define if someone is rich - wealth inequality is created by people who are not wage earners, but investors and business owners. Find creative ways to generate income for the nation from those things. Close tax loopholes, reduce tax avoidance. At the moment, there are so many legal ways to hide income and assets, it’s sickening. Listen to the patriotic millionaires movement. So much stuff, people just misunderstand the root causes, which isn’t people earning wages , not really

I'm not arguing for no regulations, but certainly there is a level, which I think we have reached, where there is too much regulation and it starts to stifle growth e.g. the new employment rights bill stops small businesses taking risks on new staff and simply just won't bother growing - not helping poorer people

It is not game over for young people. I have DSs aged 23 and 20 and they are just the same as I was at that time in terms of progress - decent jobs, working hard and able to pay rent (in London!) and just living hand to mouth. I didn't have a house or bags of cash at that age either - why do we expect them to now? That comes with time, mostly kicking-in in your 30's? I am not worried about them in that sense - the boomer money will all be passed around soon, and a new dawn will appear!

On the taxing - we need to lower taxes all round and generate some proper growth and enterprise which will overall increase tax revenue - higher taxes do not mean more revenue in the long-term, quite the opposite. And obviously reduce the insane levels of spending. I don't think it is fair to keep coming back to the higher income households, like yourselves.

It is not game over for young people. I have DSs aged 23 and 20 and they are just the same as I was at that time in terms of progress - decent jobs, working hard and able to pay rent (in London!) and just living hand to mouth. I didn't have a house or bags of cash at that age either - why do we expect them to now? That comes with time, mostly kicking-in in your 30's? I am not worried about them in that sense - the boomer money will all be passed around soon, and a new dawn will appear!

Who has argued a 21 yr old should have a house? People did buy houses younger in the past but I guess you will ignore that.

And for those who don't have boomer money to be passed on? You shouldn't an inheritance to access secure housing.

And obviously reduce the insane levels of spending

But how do you do that against a backdrop of nearly 2 decades of little growth?

And again the ageing population issue, the majority pay nowhere near enough tax for a state pension & universal healthcare. It's a problem when the demographics change.

I'd like to see what all the people bleating on Mumsnet would do with a £100k+ salary of they had it. So many of them saying they 'could only dream of such money'. That may be the case. But what do you dream of?

A bigger house with a bigger back garden for your children? A house in a safer area with more green spaces for your wellbeing? A car that's not always on its last legs? To pay for nursery days so you can get back to a career you want to? A couple of holidays a year to make memories with your family? Tuition for your kid who is failing maths? Piano lessons for your little girl? Private healthcare being you've been waiting on that NHS surgery for 6+ months?

Do you dream of that and then coming online to read forums and the news and be told you're greedy, unreasonable, not worth your salary and that you should should give it away in tax instead and shut up about it because other people earn less that you.

So what is the argument about young people?

In the 90's literally everyone I knew of the same age was skint, scraping by, trying to make a go of it. What is different? You can still do that. Maybe people in the 60s and 70s bought houses earlier, but not from the 90's onwards. I was 28 when I bought a house, and I was second to do that amongst my friends, most were around 30?

ALL boomer money will be passed on - taxed at 40% - all the big houses that people got lucky with will be sold and back in the government coffers, and hopefully spent wisely - I doubt that will happen of course.

Lower taxes = more industry and growth

You cannot tax your way to prosperity, you have to go low tax to incentivise people to take risks

People are too burdened by regulation and taxes to take huge risks at the moment, some risk maybe, but unless you allow people to take a risk on businesses, there will never be growth ever again.

That will always be the case

What needs to change and why Labour are not tackling this I don't know and its very disappointing that they are not is the ridiculous number of loopholes and tax incentives that allow the richer to get richer

ffs face head on taxing the super wealthy on their investments as they do in other countries and close the loopholes that are making the very comfortable more comfortable

What loopholes do you mean?

foreign investment with property
allowing extra properties you own to be run as a business so you pay a lower tax than you do on your wage
Tax relief on investments

thats a few to work on

I'm guessing quite a few benefit a number of MP's

foreign investment with property
The government has introduced the Register of Overseas Entities, requiring disclosure of the true owner (Boris)

allowing extra properties you own to be run as a business so you pay a lower tax than you do on your wage
This one is about holiday lets right? I happen to have a holiday let. It is a business, so why wouldn't I be taxed as a business? It makes no sense that this is not a business and should therefore be taxed as a business? I don't understand the argument at all for not doing that.

Tax relief on investments
If you mean things like EIS where people invest in small start-ups and get 30% income tax relief on the amount invested, plus exemption from capital gains if held for 3+ years - I literally don't see the problem. What would you prefer super wealthy people do with their money other than support start-ups? .
We want growth right?

@HRTQueen

Conversely maybe the 100k plus high earners should imagine what it is like to earn minimum wage?

Standing on your feet all day serving customers, looking after residents in a care home, hurting your back from cleaning schools etc etc to then go online to see you are an underachiever, lazy, stupid and didn't work hard enough at school.

The people who are really truly rich are laughing at us all.

Maybe if the risks weren't so awful and we could encourage the super wealthy to invest even more in start ups by giving them a tax break, some of those people could set up their own care home or their own shop?

Why assume that people on £100k haven't also lived with much less money than they have now?

How often are we going to divide people up until we get the exact subset that it's justifiable to think less of? Who is that subset? It it people that have never worked on minimum wage or below national average while supporting themselves? Is it people who live in the south-east and are disproportionately affected by tax rules?

This post isn't about taking away from people who earn minimum wage, so no one has to imagine anything. It's about the sheer obvious fact that wealth does not equal an income, so people should stop trying to subscribe an income to it.

I think what you said was ‘nuance’ could be supported by data. How many workers, for example did live in model villages? What % of the work force 40 years ago had sick pay that was better than ssp (don’t know when that came in tbh) compared to now? These are things there is highly likely to be government data now - so not sure that’s nuance or if, it can be supported or disproved with data, so I’m not convinced without data. I’m quite interested so might look myself if I remember but feel free to find the data and support your conjecture yourself

My household income is £200k but I don’t need to imagine what it’s like to be poor. My mum used to line us up outside Kwik Save and get us to go in one by one to stock up on 4p tins of beans and 14p loaves of bread. We would eat baked beans on bread (not toast - guess why?) for every meal for weeks on end. In fact, I would say half my wealthy friends grew up poor. And we may now be on six figure salaries but we’re still shopping at Aldi and driving second hand cars, certainly not wiping our arse with £5 notes. I’m certainly not poor anymore but I “feel” rich in the same way that someone on NMW feels richer than a poor person living in a third world country.

Perhaps some people are better with impoverishment than with money. I don't have very much at the end of the month, but I am able to get by without feeling deprived. I don't have an overdraft.

Not sure what you’re talking about but income from uk situate real estate has always been within uk income tax whether it arises to a non uk resident or not. Gains from uk situate real property and property substantially deriving its value from uk situate real property arising to non-uk residents have been subject to CGT here since 2018 or 19 and property “representing” uk residential property has been non-excluded property for inheritance tax purposes for even longer (maybe 2017?!) and so in the scope of iht irrespective of its owner.

It’s really hard to reduce tax on real property; I don’t think people are “getting away with it” on that front anywhere near as much as you think they are

Please identify the loopholes. Please also define “loophole”. Some “loopholes” are deliberate to incentivise behaviour (e.g. EIS mentioned above or treatment of ISAs). That is not - in my view a loophole. That is a tax incentive. You may (rightly or wrongly, I have no view on that) think the government shouldn’t offer such incentives, but you can’t really blame people for accepting freely offered tax incentives. Well, I can’t.

Lots of people work hard yet don't earn high salaries.

Rightio.