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?

I can't believe someone actually said to deduct money from people on benefits.

I'm sure it was a sarcastic comment.
On the other hand, some people on benefits get more than 19.5k p/a. Why should they be exempt?

Targeting those who have benefited most from Government money would be a good place to start. So furloughed workers, restaurants who took part in eat out to help out, etc.

I'm a key worker & wasn't furloughed but completely disagree with the above.

I'm actually quite anti income tax rises also it's targeted at the 1% (although that's quite difficult in practice). Increase CGT. increases taxes on 2nd homes, foreign ownership.

Many people were not too bothered that public sector workers were hammered to pay for the banking crisis, despite having absolutely nothing to do with it.

And no one in the private sector was impacted? They are not all bankers you know.

We need a wealth tax, not an income tax. Plenty of people have made millions off the back of this pandemic, and I bet they will avoid the hell out of any income tax.

How about targeting tax avoiders? The companies who make huge profits but pay disproportionate amount of taxes. Start going after the Russian oligarchs who buy up half a street of prime residential streets in London leaving them empty. Close the bloody tax loopholes and stop penalising the poor to subsidise the rich.

Rant over.

I really hate the idea that people have on furloughed workers being scroungers. More than 9m workers were furloughed during the peak of the scheme. Some jobs were saved from furlough others weren't but it ensured that some could get money for a period of time.

I honestly dont understand why people think this. The government also wanted to encourage compliance with lockdown. Plenty of people furloughed would have paid tax & many would still have seen an income reduction.

@scottish83

Targeting those who have benefited most from Government money would be a good place to start. So furloughed workers, restaurants who took part in eat out to help out, etc.

Those of us who have helped kept the country running (we aren't all key workers, though a lot of us support key worker activities) by working and paying taxes should be insulated from such debt repayments.

Yes let's target those who have already taken a hit to their income this year

And furloughed workers did pay tax and NI on their income.

We need a wealth tax, not an income tax. Plenty of people have made millions off the back of this pandemic, and I bet they will avoid the hell out of any income tax.

Yes exactly. Think about who paying income tax, generally younger people who also have to face higher house prices, virtually no interest on savings, unlikely to receive a state pension & probably by the time they are old a NHS that is no longer free.

It's only a think tank proposal and not policy (yet).

I think we will all need to pay a bit extra. I remember when the basic rate of income tax was 33%. Hopefully it won't go up to that level!

Maybe an increase in VAT on non essential goods would be one way?

No you can't just tax people more, everyone will resent this and many don't have the financial capacity to pay more without detriment to other essential financial commitments.
The government needs to stimulate the economy to create a climate where commerce can prosper and employment rates climb this way they will generate tax receipts. Filling the financial deficit is going to be a long task and should not fall on one generations shoulders.
The government also needs to plan for future sucesdive pandemics aswell. Wouldn't it have been great if previous governments had created a wealth fund from the tax income of the North sea oil and gas reserves ( As Norway and the gulf states have) Unfortunately it was squandered by one generation leaving preceding generations with nothing.

Maybe an increase in VAT on non essential goods would be one way?

A poster upthread mentioned luxury items, that's not a bad shout. Although I wonder how easy it is to administer n

Totally unacceptable when lots of it was squandered on failing corps, actual free lunches and a boost to people selling their homes, I mean FFS.

One of the legacies of the 08 recession was wage stagnation. That will likely happen again. Wage stagnation & income tax rises are not great for consumer spending.

Here's a thought. Ignore the fact that its reference is Australian, the principles are the same:

www.abc.net.au/triplej/programs/hack/coronavirus-covid19-how-australia-is-paying-for-welfare/12133292

Interestingly when we are starting to discuss who should pay the DM (sorry) has gone with this story.

www.dailymail.co.uk/news/article-8975691/Major-probe-reveals-public-sector-squanders-5-6bn-cash.html

Someone has to pay for the furlough scheme. The people still in work obviously need to pay a bit more each, naturally one would expect to pay more if earner more. £19.5 is an extremely low salary but if only peanuts more then no doubt will get back in tax credits/UC anyway.

Basically if anyone thinks someone earning £19.5k a year can afford to pay more tax is deluded. They don't even start paying back at 10% the university loan

And the proposal to tax non earned income against a reduction is NI conts is a scam to hit pensioners.

The problem we have is that no government has fixed the roof either when the sun was or was not shining. The last Labour govt blew the bank up financially, conservatives elected to sort it out but in reality were half hearted as couldn't stomach austerity such that Ireland etc had to and Sunak in reality has few palatable options.

Ie two person household plus two kids....earns £40K and basically paying paying 32% on tax and NI. Assume minimum 5% on pension and then 10% on student loan repayment. Marginal tax rate of 47%.

If said one earner hits £50k...add in additional 20% tax on any earning above threshold means tax rate of 67% for a "hard working family". How much more can you tax them?

I would love an enquiry into the fortunes given to tiny companies set up by mates of the cabinet/Cummings.
If they had to pay that back if they didn't perform as contracted, that might help.

@Sunflowergirl1

Basically if anyone thinks someone earning £19.5k a year can afford to pay more tax is deluded. They don't even start paying back at 10% the university loan

And the proposal to tax non earned income against a reduction is NI conts is a scam to hit pensioners.

The problem we have is that no government has fixed the roof either when the sun was or was not shining. The last Labour govt blew the bank up financially, conservatives elected to sort it out but in reality were half hearted as couldn't stomach austerity such that Ireland etc had to and Sunak in reality has few palatable options.

Ie two person household plus two kids....earns £40K and basically paying paying 32% on tax and NI. Assume minimum 5% on pension and then 10% on student loan repayment. Marginal tax rate of 47%.

If said one earner hits £50k...add in additional 20% tax on any earning above threshold means tax rate of 67% for a "hard working family". How much more can you tax them?

Your maths is seriously flawed here, on 40k they’d only pay income tax on 15k of it. NI and income tax come to just under 14% of their salary. That’s without any deductions for pensions, expenses or other allowances. On 50k you’d take off the 5% pension and they wouldn’t even be in the higher rate band.

I can't see how this can be paid for without both raising taxes and cutting spending. But I think £19.5k is too low a threshold, there are parts of the country where people earning that are barely scraping by and can't afford more tax. I'd support higher taxes from maybe £30k upwards or something, reluctantly.

I'd support higher taxes from maybe £30k upwards or something, reluctantly.

I wouldn’t. I earn more than that but just scrape by due to paying stupidly overpriced private rent as a single parent.

In the last week we’ve had headlines like £21m given to a ‘PPE broker’ and the Tax Payer Alliance uncovering £5.6bn of excess spending in the public sector on luxury travel, dog beds and takeaways. Hospitals advertising for diversity directors on £70k when healthcare workers are going to see a pay freeze,

So I’m feeling less than in the mood for a tax rise when the public sector pisses money up the wall on non jobs and expenses. Time for government spending to be regulated and audited before taxpayers can be asked for a penny more.

When they start closing the loopholes of the large tax avoidance companies such as Amazon etc, then come to me and tell me you want more tax!

When they start closing the loopholes of the large tax avoidance companies such as Amazon etc,

The trouble with that is it involves global thinking. The easiest way to make Amazon change its policies is for consumers to not shop there but people won't 🤷‍♀️