To be confused by 'high earners' complaining about taxes?

[tutuland]

So high earners pay lots of tax. The top 20% pay for 70% or whatever the numbers are.

But (beyond printing more money) isn't the money there high income people make just coming from the paying public? No matter who you work for, your company's profit is just an accumulation of normal people paying for things.

So ultimately, isn't it all our money anyway? Just beacuse the game is rigged and you get paid 400K for management whatever, it doesn't mean you're more deserving of that money than anyone.

The concept of "wealth extraction" refers to the critique that certain high earners—particularly executives, shareholders, and investors—derive disproportionate income not primarily through creating new value, but by capturing (or "extracting") surplus generated by workers, consumers, taxpayers, or societal systems.

This view, rooted in labor theories of value (e.g., classical economics from Marx or modern inequality scholars like Thomas Piketty), argues that frontline labor produces goods/services, while elites skim profits via mechanisms like low wages, monopolistic pricing, financial engineering, or tax avoidance.

, this manifests in examples like care home owners profiting from low-paid carers (whose wages are indirectly subsidized by taxpayer benefits), Amazon's warehouse workers enduring poor conditions to fuel executive/owner wealth, or CEOs earning hundreds of times more than median employees despite relying on collective effort.

Proponents see this as systemic: capitalism incentivizes extraction when returns on capital outpace economic growth (Piketty's r > g), widening inequality. Nuances include "rent-seeking" (gaining wealth through manipulation rather than productivity, e.g., lobbying for subsidies) versus legitimate profits.

Implications are profound: rising inequality erodes social cohesion, reduces consumer spending (as wealth concentrates), and fuels populism, while potentially stifling innovation if talent chases extractive sectors like finance over productive ones.

Counterarguments emphasize value creation over extraction: high earners often bear outsized risk (e.g., entrepreneurs facing bankruptcy), allocate capital efficiently to scale operations (enabling jobs and growth), or innovate in ways that multiply productivity (e.g., Jeff Bezos turning a garage bookstore into a global logistics empire employing millions).

Marginal productivity theory posits that pay reflects contribution—scarce skills in leadership or vision justify premiums, as poor decisions can destroy value (e.g., a failing CEO tanking a company and jobs).

Evidence shows mixed realities: UK FTSE 100 CEO pay ratios averaged ~109:1 in 2023 (High Pay Centre data), down from peaks but still high; yet many firms argue executives deliver shareholder returns exceeding wages.

Edge cases highlight distinctions—productive "wealth creators" (e.g., tech founders building sustainable firms) versus extractive ones (private equity loading companies with debt for short-term gains, then exiting).

In the UK, corporate tax avoidance (e.g., multinationals shifting profits offshore) exemplifies extraction from public coffers, costing billions in lost revenue for services. Broader implications: if extraction dominates, progressive taxes or regulations (e.g., windfall taxes, pay ratio caps) could rebalance; but overreach risks deterring investment.

But then poor people can't afford to call an ambulance

Or insulin

But do you actually feel like you are living in a safe and secure society though? Genuinely asking because that’s a bit the point of your thread and as a non-white gay woman with an immigrant background I wouldn’t say I feel
« secure » in the UK or even in most high-tax countries, and as per my previous post, I don’t necessarily feel like healthcare, housing, education, nor safety is at the standard I would expect for the amount of tax expected from me/people like me, or even just the general population.

If you feel 100% secure in the UK then you are pretty privileged because I do feel the average citizen feels quite insecure in this current economy, with the current healthcare system, current housing situation and the current political climate/sentiment.

You think a night worker at mc’ds should earn the same as a surgeon?!

Thats ridiculous. You obviously dont think that.

So if im paying your company for services or goods, your salary is my money?

I thought OP wants nurses to be paid the same as surgeons. So why can't nurses be highly paid according to their level of skill? Apparently that prices ordinary people out of health care so they cannot afford ambulances or insulin. So pay ordinary people more because they have the same skill as nurses and surgeons in order to afford ambulances and insulin.

Doesn't money grow on trees?

That’s a pretty good summary of things. I do agree some models are exploitative. Both of workers and the consumer… looking at you Amazon!

But I do think people forget that 99% of business in the U.K. is SME… the majority of those micro!

I am just going to leave these facts here…

Top 10 must-know UK small business statistics for 2025

• There are approximately 5.49 million SMEs in the UK, accounting for more than 99% of all businesses.
• The number of small businesses in the UK grew by almost 23% between 2010 and 2024.
• Construction has more SMEs than any other UK industry, at 870,000.
• London has the most SMEs of all UK regions relative to its population (1,367 per 10,000 adults).
• SMEs employ around 60% of the UK workforce.
• Roughly 15% of UK SMEs are led by women.
• Around 7% of UK SMEs are led by a managerial team where at least half are from an ethnic minority background.
• SMEs contribute more than 50% of the total UK business turnover in the private sector, amounting to £2.75 trillion.
• The median average revenue for a small business in the UK is £295,000.
• The average profit for a UK small business is £70,000 per year.

I run a micro business. We turned over just under the VAT threshold last year. My partner and I took home a completely normal wage. However we are the beginning of the chain. We designed £2 million worth of output which was commissioned. That’s suppliers, workers, companies. Thats a big chain of wealth we have created.

Yes I think I deserve a very good tax break. Perhaps we should calculate tax like that. Your contribution to wealth creation divided by your take home - I think I am due a rebate 😂

my husband is a highly intelligent man and he does not have even the slightest idea about inflation, tax efficiency, even how interest works and what is the best way to do a mortgage nothign at all like that. he lets money just accrue in his current account

Good reasoned posts from @TheMerryJoker

Thanks for setting out the concepts of wealth extraction and wealth creation. The picture in reality is not binary but more nuanced.

So ultimately it's our money anyway 😂 😆 😂 😆

I’m a high earner and don’t complain about the tax rates. However, I also work reduced hours so I don’t go into the next tax band. The salary improvement from working full time is fairly marginal due to the increased taxation and worth a lot less to me than the value of having my non-working time.

My employers are perfectly happy with this - the work gets done, even if it is slightly slower than it would of I worked FT. It does mean that there is a reduction both in employment (no one else covers the hours I don’t work - my employers do not employ an additional person one day a week) and taxes versus working full time. I’m content with that position but having it multiplied across a lot of people because of tax thresholds doesn’t help the country as a whole or encourage growth.

Yes I’m confused by this statement! Does OP want it back or something?

Who makes a post saying "I'm a high earner but I don't actually deserve it. It's not due to hard work"

That's not the way these threads tend to go though is it? Of course we shouldnt accept the waste. 13 years of Tory miss management has left us up shit creek. But all these threads seem to do is pit us against each other, high earners complaining about the amount of tax they pay and how hard is it for them to a bunch of people who earn a fraction of what they do. It always ends in a bun fight between the two when the real people at fault are the Tory party.

I'd rather still have had Sunak as PM than Starmer.

Reminded of a tweet I saw. In the US if you see someone with a nice car you think "oh that's nice, maybe if I work enough I'll have one one day". In the UK you think "I'll have that off him"

What you’re saying is so illogical. I understand it’s personal to you but surely you can take the emotion out of it and see how the two things don’t marry up - you want lower taxation, but you also want to drastically increase the benefits bill….

you’ve misread my comment and possibly hers too.

@InWithPeaceOutWithStressthe comment about not wanting higher taxes was in response to someone saying that what would have helped me, would increase the welfare bill and in turn taxes, aka higher raxes

I'm not saying taxes should go even higher - because I think most people can agree there is a lot of waste, not just with welfare but previous and current Government screw ups and mismanagement.
I would not object to the taxes I pay IF those taxes helped everyone .
The taxes, and welfare system in their current set up do not, and that's why I dislike our current system and why I understand people who complain about high taxes. Countries with a tax rate typically have a far better, healthier happier society....we have the high taxes for some and they are screwed over.
Either tax everyone as we do and fix the system so everyone gets help when they need it.
Charge everyone a flat 50% tax, like elsewhere, and ensure we all have support.

If not, stop raising taxes, expecting those who earn the most to pay not just an in incremental increase (based on a flat percentage) but a HUGE cliff edge increase that decentivies

Well it's certainly odd that someone motivated enough to Google the percentage of care home staff in the UK on UC seems to need the concept if income generating human capital explained.

The people getting the money from the system never think they get enough and that the people paying it are selfish, likewise the people paying it think they pay too much and the receivers are selfish. It’s about balance and the current balance is towards those receiving, leaving the country in an unsustainable financial position.

You are not pointing anything out “sweetie”. You are patronising somebody you don’t know with a made up narrative about her future to suit your own imaginary version of the world,
or maybe just to have a go at somebody who has made pro-social choices you don’t agree with because you are so entitled you think you should get the world on a plate without making a contribution.

Don’t claim to be pointing out risk. You cannot assess risk from a position of ignorance of the full situation.

Whats with with chatgpt copy pastes? @TheMerryJoker

Countries with a tax rate typically have a far better, healthier happier society

This is absolutely true, but the key difference is everyone pays more tax. Not just the top10% earners or groups we decide we don’t like : farmers, landlords, prep school kids, employers, pubs etc. whilst 52% of the country effectively don’t pay any tax (are net receivers).