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?

No no no. This is too low a figure to start with. Esp if your paying private rents (no social housing here. Waiting list could be years) no support with uc or tax credit top ups

We should all pay more apart from people on MW.
Some posters on MN are obsessed with trying to get get money off people who they think are wealthier.

All adults should help pay it, not just the wealthy. They likely use less services anyway. Those on low wages likely had more financial help and were claiming state assistance anyway so shouldn’t not help pay.

Realistically, the "cost" has to be shared over everyone. Every tax needs to rise by a small amount, so say an extra 1% on income tax and corporation tax, 1% on VAT, 1% on fuel duty, insurance premium tax, tobacco and alcohol. At the same time, benefits need to be held back slightly, so instead of, say a 2.5% inflationary rise, scale it back by 1% to just 1.5%.

Then remove some of the exemptions/reliefs on inheritance tax and capital gains tax.

Big tax rises for any particular demographic will have adverse unforeseen consequences - we really don't want to end up with less tax revenue by making an ill-informed tax rise, such as when Gordon Brown brought in the 50% top rate of income tax that caused an overall reduced tax take from those in that bracket!

Benefits don’t rise by 2.5% per year, I think some of them have actually been frozen for a while.
The problem with raising VAT is that people will spend less, which creates a vicious cycle. Maybe tax internet shopping purchases, level up the playing field a bit for all those undercutting the high street. I think any tax rises will be very unpopular without a corresponding crack down on tax evasion and tax avoidance. Might be easier to do now we’re not part of Europe. And a tax on foreign investors buying properties that then stand empty...

Means testing the state pension may save money in the short run but it certainly won't save money in the long run, unless it is combined with much stronger laws regarding savings towards private pensions (because means testing the state pension heavily devalues private pensions).

You can understand why some people will feel resentful about this. Yes no one chose to be furloughed and the majority of those on furlough have taken up new hobbies to keep them occupied. However a very small tiny minority have taken furlough as an opportunity to party and be anti social. Meaning all their neighbours who work from home and pay taxes are not getting a decent sleep and are suffering because of their selfishness. Of course this is a tiny minority of people but with things like that you can see why tax payers would be really unhappy to pay more tax to support those people

@Sunflowergirl03

You can understand why some people will feel resentful about this. Yes no one chose to be furloughed and the majority of those on furlough have taken up new hobbies to keep them occupied. However a very small tiny minority have taken furlough as an opportunity to party and be anti social. Meaning all their neighbours who work from home and pay taxes are not getting a decent sleep and are suffering because of their selfishness. Of course this is a tiny minority of people but with things like that you can see why tax payers would be really unhappy to pay more tax to support those people

People need to get a grip and look at the bigger picture then.

Maybe so, but if it affects your daily life and is affecting your sleep and mental health then it’s harder to think “but at least I’m paying more in tax to help others”

19.5 seems an incredibly low starting point. Surely it would just push more people into poverty. Be better to start at 30k. But start by focusing on tax evasion by huge companies.

@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.

I completely disagree. These people have already been disadvantaged through no fault of their own. They didn't choose to be furloughed.

And no, I haven't been furloughed. My husband was for 3 weeks right at the beginning.

I have no problem with increasing income tax a small amount. By the nature of it, those that earn more will pay more. But I do think there needs to be a way of getting the retired generation to contribute in an equitable way too. Throughout this whole pandemic we have been told we are all in it together, regardless of the risk to us (which I think I the correct way of doing it). Young people would argue they had made sacrifices for the benefit of the over 70s. So for just the working age population to contribute back, whilst my parents generation don’t have to (whilst many would say much of what was done was to protect them), seems quite unfair. A scheme for everyone to help a little seems fairest.

I agree @beckypv working people should be taxed slightly more but retired people should also contribute, since they have benefitted the most from these measures and been affected the least financially.

Disagree. Those that had assistance should be the ones to pay it back. Lots didnt get furloughed, didn’t get benefits, didn’t get business help so shouldn’t be penalised because others did.

Percentage tax is the fairest way then everyone pays something. The more you earn the more you pay.

I'm above that but not much hardly an high earner. I'm not paying for this and I didn't agree to bankrupt the shop because of panic over a virus

@IceCreamAndCandyfloss

Disagree. Those that had assistance should be the ones to pay it back. Lots didnt get furloughed, didn’t get benefits, didn’t get business help so shouldn’t be penalised because others did.

Thats not how things work. People who are ill and spend a lot of time in hospital, don't pay extra tax to cover it. Someone whose house burns down doesn't pay extra tax to the fire service the following year. Overall there will always be some people who are net contributors and some who are net costs, but that's the way our society works.

sorry, thread too long. If it's 4% extra on the amount over £19.5k, then on a £39.5 salary (well above median) that means
4% on £20k, or £800 (per year).
£67/month. That's a lot less than the extra income tax bill I was expecting.

Far too low a threshold. My husband and I are on 25k each and just about manage to keep everything going and our mortgage paid. We have worked all the way through this pandemic and received no additional help or support.

@Pbbananabagel

Far too low a threshold. My husband and I are on 25k each and just about manage to keep everything going and our mortgage paid. We have worked all the way through this pandemic and received no additional help or support.

Same here

@Sunflowergirl03

Maybe so, but if it affects your daily life and is affecting your sleep and mental health then it’s harder to think “but at least I’m paying more in tax to help others”

No one is paying more tax yet though.

@Beaniecats

I'm above that but not much hardly an high earner. I'm not paying for this and I didn't agree to bankrupt the shop because of panic over a virus

We're all going to pay for this.

One way or another, like it or not.

@Pbbananabagel

Far too low a threshold. My husband and I are on 25k each and just about manage to keep everything going and our mortgage paid. We have worked all the way through this pandemic and received no additional help or support.

My husband earns £40k. I earn £6k. So between you, you earn more than us. We have worked all through the pandemic too, with no additional help (as have millions of others). Would you say that a 40K limit would be too low? These things don't work on individual circumstances. The government don't look at people and say "oh well they do earn more than the threshold but they've worked really hard this year so let's give them a break".

@Beaniecats this is the thing, I appreciate we all have to pay it back somehow, but for us our childcare is around £80 per day- it would more or less force me out of work and end up with us needing benefits assistance whereas currently we receive basic child benefit and that’s it. In the long run, we’d contribute less to the state whilst having decreased opportunities for our family and quality of life. So it just makes no sense.

@ChocOrange1

I agree *@beckypv* working people should be taxed slightly more but retired people should also contribute, since they have benefitted the most from these measures and been affected the least financially.

😂 good luck with that proposal!