COVID-19: Those earning above £19.5k should pay more tax after pandemic to help fix UK finances, says think-tank

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Your thoughts on this?

news.sky.com/story/covid-19-those-earning-above-19-5k-should-pay-more-tax-to-help-fix-finances-12130088

How should the debt be clawed back? What would you do if you were government to raise the money?

@Dongdingdong

Many will live to their means

Well of course, but they have a heck of a lot more “means” than most. A wealthy person can afford to pay more tax - the vast majority of low income families cannot spare a penny more.

There aren't enough top earners to cover the costs - it's going to be a fairly broad based tax rise across the board because a 1% rise in tax for 30 million people brings in more than a 5% rise in tax on 300000.

"A single percentage point increase in the basic rate of income tax from 20 to 21 per cent would raise £4.7bn in 2020-21, the HMRC calculations forecast.
Increasing the higher rate from 40 to 41 per cent would lift the tax take by about £1bn, reflecting the smaller number of taxpayers in this band of earnings.
Yet an increase in the additional rate band from 45 to 46 per cent would only raise about £105m."
(Article in the FT May 2020).

The government is going to fix tax boundaries which seems sensible si the first £12.5k will still be tax free, but this won't increase with inflation

It’s outrageous that people think furloughed employees should foot this bill. We’ve had our jobs removed from us and our ability to work in order to facilitate keeping the country safe! It’s because the government have ordered lockdown that this has happened. You can’t simply order people to stop working and expect them to just exist on fresh air alone. Or maybe those relentlessly clamouring for lockdown should foot the bill, after all they wanted this didn’t they?

I have worked throughout the pandemic, back office NHS, working more hours than I ever have had to in the past to ensure that our frontline colleagues were able to do their jobs and look after patients effectively. Although I am a key worker, school would not take my child as I can work from home. So I have been getting up at 4am to start work, fitting in home schooling my 7 year old daughter whilst working 14 hour days at work. Finishing work at 11pm, ready to get up at 4am again the next day. Work has been relentless. I am physicaly and mentally broken. I have followed every single rule throughout. And now I’m going to be taxed more.

Tax those who broke the rules and prolonged the shit that we’ve all had to go through this year.

But somehow the government have to shore up the finances of the country because frankly the money that they have had to throw at this is terrifyingly large.

It has to be paid back somehow :(

I wasn’t furloughed but in order to keep my job the whole company (apparently everyone ..) has had to take a pay cut - for me it’s £250 which is quite a chunk of my wages. So a tax increase as well will be a double whammy.

But I don’t know how to make it fair, yes I feel everyone should pay a little back within their means sliding scales but I do feel that the wealthy people spend a lot of effort avoiding tax :/ so it always seems to land at the middle/ lower end to pay it back.
Whether that through supermarket price rises or increase in other areas and taxed on wages.

Due to my pay cut I’ve had to reduce the small amount I was paying into a pension it’s could be putting me in a vulnerable position when I’m older and that’s a worry.

Besides, won't we be rolling in money now we've left the EU. That's what we've been told by Boris and Co for the last five years. Hold them to that.

EVERYONE needs to pay something, every single working adult, furloughed or not, earning 16K or 160K.

@LurgyOnTheLoose

I didn't vote for this corrupt, inefficient, incompetent government that let coronavirus rip through this country in Feb/March/April/May and then reopened things recklessly and now we are back to square 1 for the whole winter. We are paying for their mistakes financially and with health and lives. It would have been a lot cheaper to lockdown properly (not let tens of thousands of infected people into the country between March and June without any quarantine or restrictions). Those countries that took a hard line against the virus have had much better economic outcomes.

Agreed. It would have been cheaper to pay people to isolate when covid+ and to have stopped such a rampant spread so lockdowns did not have to be so long and so harsh.

I hope not, my DP lost his job through Covid and because I earn just over the threshold and I have some savings (not him, me) he isn't entitled to anything so that would hit us even more. With WFH being so popular I can foresee an additional tax there somehow - I've already seen the assessors updating their information to say part of your home (if you have a specific space, not necessarily a room) needs to be classed as business use so will have a rateable value.

To answer the question - it should all be paid for by a one-off wealth tax.

To answer the question - it should all be paid for by a one-off wealth tax.
I agree and would personally be really stung by this. We can't just keep lumping debt into the backs of the young and poorest.
A wealth tax will never happen though, we are far to selfish, it'll be the as mentioned, young and poorest who are made to pay.

Rather than make sure individual people are walloped, can they not share the burden out across everyone in a way that's fair and certain people/industries aren't unfairly burdened?

Increase fuel duty by 2p. This hasn't been increased for years, and many people have significantly reduced their commuting costs by WFH so it wouldn't have the same hit that it would have had 18 months ago

Inheritance tax. I know this is controversial but no one is ever guaranteed an inheritance

Increase VAT for non-essential or luxury items

Increase duty on alcohol/tobacco

Add an online sales tax for online retailers

Make sure that bigger firms pay their fair share by closing loopholes

I know we have to pay for this so I’m just having a grumble before I start

I’m in Scotland so I already pay 41% tax for a Parliament I never asked for thst have done fuck all useful to help in the last year (read the stats not the rhetoric if you doubt)

I can absorb a tax raise and I’ll take it on the chin but fucking seriously, we’ve screwed the economy we’ve screwed the mental and physical health of the nation and to top it sll what have we achieved, one of the highest death rates in the world .

And now I have to pay for the shit show despite working in the public sector endlessly to try to keep things going through this?

Oh do fuck off!!

Sigh.

@BeakyWinder

Furloughed workers aren't scroungers, but some have had the best part of a years free wage to sit at home! I've worked every sodding day, not even a 2 week isolation, why should I pay for this and not them?

Because they didn't choose to be furloughed. (And I wasn't furloughed, in fact I had more work to do due to Covid.)

To answer the question - it should all be paid for by a one-off wealth tax.

Agree

shocked at how bitter some people are about furloughed workers

That's because they bought into the 'isn't my life fantastic' mantra being plastered on social media not realising that the picture of someone sunbathing on furlough was just a tiny snippet of someone's day. They forget about other the 95% of the day that didn't fit the narrative - sitting in the garden was all you could bloody do given there was a stay at home order, and all that fantastic baking that was really just a money saving exercise in using up what was lurking in your cupboards now your salary had been cut. They are bitter and resentful of being excluded from the so called 'party' because they haven't stopped to think about what that actually entailed.

my 15yr old solved the gordius knot simply: anyone who has wealth beyond 2m in non-frozen assets (eg not in house) should pay. Anyone earning above 200k/year should pay 1-5% more tax.
Love it how simple life is at that age :)
But he does have a point.

People who have 2m in non frozen assets are mobile though, same for lots of those 200k plus high earners.

There's clearly going to have to be tax rises, and though I'm slightly resentful about them as I didn't support the policy, we're all going to have to pay for them. We will all be significantly poorer for quite some time (probably the rest of my lifetime) with worse public services. Some of us did warn about this, but we were generally called granny killers.

However... I live in a democracy. That's a massive privilege. And if the price of that privilege is to pay more tax because the majority of my fellow citizens wanted the policy we followed, ok. Fair enough. I'll say, "I told you so," possibly more than once. But at the end of the day, we've got to deal with the current situation, not a different one that would have happened if...

People who have 2m in non frozen assets are mobile though, same for lots of those 200k plus high earners.
Wouldn't it be great if all countries did this simultaneously though. All countries need the money to pay for covid and rich people/companies have been able to play countries off against each other for far to long.
It'll never happen though.

Absolutely agree we need global joined up thinking & it would be a great thing but they won't do it.

I think the US are pretty good on getting taxes though, not sure why we can't be more like them.

Although there is also the question why someone with property worth millions should not pay more & someone earning lots should.

Those on furlough who have basically been on holiday for a year at 80% are the ones who need to stump up, not the people who have been working throughout.

@lockeddownandcrazy

Those on furlough who have basically been on holiday for a year at 80% are the ones who need to stump up, not the people who have been working throughout.

Bollocks. Every day stressing about whether you have a job to go back to is not a "holiday."

I think we should put the basic and higher rates of tax up, but leave the threshold the same at the bottom of the basic rate. That would be a progressive way of doing it with most of the working population contributing. Wealth taxes sound easy and quick, but it never quite collects as much as you think it does, and there are perverse incentives not to invest in things if you do that. That's dangerous as we've never needed investment and innovation more than now.

@lolulop

Absolutely agree we need global joined up thinking & it would be a great thing but they won't do it.

I think the US are pretty good on getting taxes though, not sure why we can't be more like them.

Because I like a system that raises enough taxes to fund the NHS