How will you look to mitigate Labour’s tax hikes? (Part deux)

[EverythingAllatOnceAllTheTime]

How will you look to reduce the impact of Labour’s seemingly endless (imminent) tax hikes?

Are you keen on your income tax to rise to pay for it?

Not only the increase but to fill the gap if people do change behaviour based on other tax changes

You still don't get it do you?

Why do you think you'll get £1000s pp worth of extra public services whilst only contributing extra £100s yourself?

Taxes going to the government don't magically multiply themselves!

Other people are paying £10000s extra tax, so that you get £1000s worth of public services whilst only contributing £100s.

Great return on investment for you - because you're being given other people's money! Not so great for the people subsidising everyone else.

Well those people you're trying to get to pay for all the extra things you want - but don't want to pay for yourself - are saying that they've reached their limit of what they're willing to give.

If you want extra public services, then you need to actually pay your genuine per person share of the extra money for them yourself. Not steal 90% of it from me using newly-invented taxes upon extra taxes upon taxes.

As pointed out most of it, for very many people is the gain on real property. That's not taxed and neither is investment gain - unless you sell.

IHT needs to be reformed with a wider spread and a lower rate. Or taxed in the hands of the recipients.

Genuine per person share? Do you really believe that “fair” is someone on minimum wage paying the exact same amount as a multimillionaire?

Do you really think that a tiny percentage of the population will keep giving you more and more and more?

I'd be happy if the cost of the extra services was added to basic rate income tax. Then the cost is shared between 36million people instead of just 6 million higher rate tax payers, or 800k additional rate payers.. or about 300k people when it's an random group you want to penalise like private school parents.

Oh don't worry, higher earners would still be paying more. They pay whatever percentage is added onto basic rate tax on the whole £37k band. An average £35k earner will only pay that percentage on the £23k they pay tax on, and someone working full time on mimimum wage will only be paying the extra percentage on about £5k.

So each 1% added to basic rate tax would cost someone on NMW £50 a year, in contrast to £370 per year for a higher rate tax payer.

But at least everyone would actually be contributing.

One thing we could do is just tax benefits as well. Given we are all so keen on high taxes and making sure everyone contributes.

Some benefits are taxable, the main ones are the State Pension, New Style ESA/JSA and Carers allowance too.

The more I think about this, the more I edge towards the conclusion that Reeves would raise more money, more fairly if the basic rate of income tax were to rise 1.5% across the board.

Totally agree, the problem is they have backed themselves into a corner.

Completely agree.

Reading the replies on this thread is very interesting. What appears to have happened over the last fifteen years is that lots of people seem to have been persuaded by the Tory Party that they are wealthy and have been protected from onerous taxes by a benevolent government.

So when they hear about ‘wealth taxes’ or taxes on high earners they think- that’s me! I’m going to be taxed more and I already pay loads.

In actual fact the really wealthy don’t earn a monthly wage, don’t have mortgages or worry about energy bills. If you have all these things then you aren’t the target of the tax increases. Yet people have convinced themselves they are wealthy and being unfairly targeted.

They just don’t get it that those with the “broadest shoulders” won’t pay. They are either internationally mobile or can afford to change behaviours and pay less tax. The only ones that will pay in reality are those in modest to ok incomes on PAYE

And there are some of us, to which your arbitrary definition of really wealthy applies.

That said, you’ve heard of fiscal drag I assume.
You understand that some of the ‘pretend wealthy’ send their DC to PS I assume.
You understand that some of the ‘pretend wealthy’ are liable to IHT I assume.

I could go on, but, in summary, you are wrong.

Spot on.

I just don’t understand how people who are actually “really wealthy” don’t understand that the seemingly constant stream of whining about tax increases that haven’t even been announced yet, VAT on school fees and weird pointed comments about poorer people needing to pay their fair share just comes across as totally tone deaf. Is this just a sign of the post-Trump world we live in now? Maybe this kind of behaviour is now just totally normalised by the fact that we have (to paraphrase Obama) spent the last decade listening to an incredibly high profile, 78 year old billionaire whine non stop about his problems and how unfair the world is to people like him.

In a word, no.

Most of us are more discerning than you would give us credit - we know who/what Trump is/is not. I dont see the correlation at all.

Speaking of tone-deaf, open your ears - listen to the rhetoric coming from Labour. Perhaps then you will understand how many of us feel.

OK so tell me why some of us would work more to fall into the 125k plus bracket, lose every allowance and pay 45% tax? I make sure I stay under the 100k bracket for a reason. So I work part time. There is literally zero incentive to work more. I live in London, that kind of salary here does not make you rich because housing is so expensive.

@Takoneko , you might look at our family balance sheet (although I am not offering you a glance) and conclude that our shoulders are broad. What it will not show in the current snapshot is the periods when we went without to keep our core team employed and on proper salaries. Right now, we are in a downturn, so we haven't taken a penny from the business in several months. But our order book says that there's new work coming in again. Being in business is world's away from being employed.

And, as I said above, we are nearer 70 than 60, so if we fail to save for the future, it will be a bureaucrat choosing my care home on price. No thanks, I'd rather pay personally and make my own choices.

Also I thank my lucky stars that I decided to get my DC into state grammars rather than send them to a private school because I have 4 as I would be currently screwed if we would have to pay the VAT plus uni maintenance costs. Plenty of my friends in exactly my position who made slightly different choices are now between a rock and a hard place, remortgage to insane levels/compromise their pensions completely vs take kids out of a happy environment. The taxman keeps coming for those in our bracket of just about successful professional who has not accumulated loads of assets, yet in other countries we would be better off. So some of us are most definitely encouraging our DC to look abroad for a place where middle class professionals can still have a family and a good quality of life and are valued. Why would we not? It seems successive governments have it in for us, in particular. So even if we are not rich enough to be mobile ourselves, our DCs are. And that will be an issue further down the line given demographic changes. It absolutely is something the powers to be should worry about.

@Papyrophile - I think I would rather move to somewhere cheap like Thailand or India where the healthcare is good and cheap and I can pay a live in carer? I think people are increasingly doing that, if they have just about enough money to do so, especially if they have some connections of any sort to a place like that.

We've thought about it @Araminta1003 . In Sri Lanka which we both like, while the civil war was still in progress we "invented" the Great Marigold Hotel for our ageing parents, and then they made the movie!

@EverythingAllatOnceAllTheTime

High monthly income doesn’t equal wealth if it being over spent. Just sending a child to PS doesn’t equal being wealthy. Having a big house (and being massively over leveraged) isn’t wealth. If you earn 80k and spend 90k then you aren’t wealthy.

I think this is why there is so much hand wringing about taxes and VAT for private school. People have over leveraged themselves to live a lifestyle they can only afford if they continue to have high monthly earnings: huge house, new cars, private school, luxury holidays, designer clothes, private health care. That’s not being wealthy because you’ve got no investments outside of a single property. It’s a disaster waiting to happen.

so my point is that people have been persuaded to count themselves in with the truly rich because they live vaguely ‘luxury’ lifestyles. Unless you are the kind of person who derives their income from shares and investments then capital gains is not going to effect you. Inheritance Tax only affect a tiny number of estates. Especially since most people currently sitting on that single high value property are going to use a lot of the equity to pay for care because the social care system is so abysmal.

So, unless you are making an annual income from considerable investments and have a sizeable estate beyond a single property then this is not about you. High spending does equal wealthy.

This is exactly it. Your children- the doctors, teachers, lawyers etc that the country needs won't be here. Why would they stay for being crippled with the graduate tax, not being able to afford a house, being disincentivised from saving for a pension, not being able to afford nice schools for their kids etc? And still being demonised as the "rich" in the wider narrative?

What is the actual point in them staying?

Ok, lets change tack.

Labour have said that they will not tax ‘working people’ (lets believe them on this occasion).

Please can you define ‘working people’ for me.

Thanks