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?

I am under no illusion that I'm the "really wealthy". But I'm also under no illusion that Labour are absolutely coming for me.

Within 2 months of being elected they've already introduced a very significant, targeted, possibly illegal tax against just 300k people (including me) which won't raise any money and was only introduced for political capital.

They're talking about removing the mechanism I use to avoid paying a marginal tax rate of 62%. Which I use to invest in companies in the UK and abroad in order to provide for my own old age. 62 fucking percent. Fuck that.

Reducing my obligation to a mere 32% income tax now - for the privilege of tying it up until retirement... losing more through whatever other bullshit they come up with like forcing pension investments to be UK whilst simultaneously destroying UK economic growth... and then having to pay a second lot of income tax when I actually get what's left. That's just not going to cut it.

They are dreaming if they think they'll actually get more tax-take that way.

Yes precisely. Labour are now telling people to make sure they are claiming their pension credits, I’m not saying thats a bad thing but clearly it may have been cheaper to just let them have £300. Plus many won’t qualify and will just be pushed into abject poverty regardless. Well done you paragons of virtue.

Labour have form for introducing policies that do the exact opposite of whats intended. Introducing tax credits was one of them, you create a system where people are trying to tread a fine line between working enough to avoid penalties but not too much to avoid penalties. It’s just stupid.

I await further breathtaking stupidity from someone who is supposed to be an economist. The school fees thing is also ridiculous, Adam Smith are suggesting a 1.8 billion loss for government revenues (I know I know they aren’t neutral) but whats the point unless it’s actually going to raise government revenues.

A lot of this feels more and more ideological rather than pragmatic.

Universal credit.

The artificial tax brackets in this country are ludicrous and a complete disincentive to working more or earning the most you can. I looked at my brother’s Swiss canton Zurich tax form, it goes up every few thousand and only peaks out into the hundreds of thousands, you deduct taxes for loads of things like having kids and mortgages and childcare. That is a far better system. They should be rewarding people to work full time, be successful and have 2-3 kids that that the educate to the best of their ability. What they are doing is the complete polar opposite here and they know about the demographic time bomb. It is all a complete farce, given no social care plans either and no state pension people can actually live on. My brother is staying in Zurich now because their pension is actually worth something.

What on earth are you on about?

The Hunt NI cut cost 9 billion this tax year, with a total cost of 55bn over the next 5 years (according to the OBR) Yet each individual worker, as an average saves just a few £100 per year

£4bn would resolve the Dentist issue per year, £11 billion would fix potholes and road mtce, according to the Local Govt Association.

Now Labour are going to have to cut that 55billion from public spending, rise taxes or increase borrowing or even less likely "Grow the economy"

Rough figures but i think you are the one who doesn't "get it".

What Labour and some posters are missing is that people have a limit

Get that wrong and it won't be the 'whining' that is the issue, it will be people opting out and changing behaviour

Then the tax burden may fall to you instead

Then I reckon people will have something to moan about

@EverythingAllatOnceAllTheTime

Working people= people who derive their income
from a job rather than investments.

That was easy.

I’m going to point out now that I derive most of my income from investments. Anyone who does this will tell you that you always have to be prepared for the prospect that investments can go down as well as up and that taxes are inevitable.

My point is that the government aren’t after people’s monthly earnings. They are looking at those deriving high incomes from investment (the truly wealthy). High earners on PAYE are not the focus.

And if you can’t afford the fee rise then you couldn’t avoid private. As someone who was removed from private when my parents business crashed, I would never put my child in such a precarious position.

Moving country is pretty extreme! 🤣🤣🤣

You must be tighter than a ducks arsehole if you are really going to those lengths just to avoid tax!

@Bontonbonbon broadly, I agree with your definitions. However, you seem to be overlooking the tendency to shift into income-producing asset based investments with age. My capacity for work isn't what it used to be, so I have shifted money into assets that yield.

How do you know what people have?

This thread is actually really illuminating. Unusually, it hasn't been hi-jacked by Labour adherents telling everyone that they are wicked for not wanting to fund those less fortunate. Even so, I don't form the view that everyone here wants to tread on the less successful.

Not so fast.

So, where does that leave a person under PAYE on, say, 100k per annum, who has diligently saved every month, but who derives no meaningful income from it.

The truth is, you have no idea what this Govt is capable of - look what they did to the old folk. When their shit-for-brains reforms fail to generate the revenue forecast, they WILL come for the ‘working’ class - mark my words. You are truly naive if you think otherwise. I’m no fan of Sunak, but boy was he right during the election campaign.

Thanks for the history behind your bitterness BTW - its all clear now,

This year has been a little bit easier but I found 14 years of Tory government policies pretty tough to live under, especially the last few. My mum was diagnosed with cancer in 2010, and I've always been grateful that this happened a few months before the general election as she got referral and surgery within a few weeks under NHS targets which were one of the first things scrapped by the coalition government. She wasn't cured but she had another 6.5 years thanks to amazing NHS treatment, which were important to her and her family.

Other things that were affected included public sector jobs and services, local council and schools funding, years of being squeezed. Entitlements to free school meals for parents who are working but low income/high rents were cut, benefit caps. Then all the COVID misspending, huge inflation in bills and so everything else.

When people talk about how bad public sector borrowing is, there's not much consideration about women/families being buried under a pile of very expensive debt to private companies because of childcare, bills, transport, higher education costs. Maybe if water was taken back under government control, at least tax rises to pay the predicted costs of clearing up the mess left by privatisation could be spent on that - I don't have much confidence in the likes of Thames Water (or other privatised companies).

@EverythingAllatOnceAllTheTime

I’m not bitter. I’m just telling you how it feels to be the child of financially illiterate parents.

If you are saving then you should be investing. 100k a year is great except if you are loving like you earn 250k a year.

It’s really very basic. People have been persuaded to over leverage and not invest it diversify their investments. Loving month to month on 100k shows shocking financial mismanagement.

I take it you at least have a SIP where you can put some tax free savings?

If Labour revoked the NI cuts, then the 'fiscal black hole' would be resolved. And that cost would actually be shared across the population.

But no. Instead of doing something sensible, they'll try to squeeze the same amount of money from 3% of the population instead. Again.

Which means the same suckers are expected to contribute 15 times more than each person would pay it was shared amongst the 50% of the population who work. Again.

Definitely you who doesn't get it.

And if they unwound the NI cuts, and extended it to charge NI on occupational pensions above say £35k, to spare the middle income pensioner, then they would still raise revenue from DH and I who have a bit more fat than that. And they would recoup the £22billion in public sector wage increases.

Let me remind you of the words of a C17/18 French chancellor (Colbert) who said "the art of taxation is to pluck the most feathers from the goose with the least hissing".

I remember that phrase and think it's a good way to look at it

This is totally me right now!

@Papyrophile So sorry for your loss

Your examples of wasteage are frankly laughable. What about 300m for Rwanda, £8m per day for asylum seekers hotels because the Tory Govt chose NOT to process applications, £2.3bn on cancelled parts of HS2, £3bn for Govt use of temp agency staff etc etc

Labour have upped social housing rents To go towards building more homes. But there seems to be obfuscation about whether they are for social rent or "affordable" rent,

@Bontonbonbon so who do you think Labour are going to go after, if it doesn’t include people on £3 / 4/ 500kpa PAYE?

Do you really think Labour includes someone earning half a million in their definition of “working people”? I don’t. I think they mean it to have echoes of “working class”.

There is a simple and fair way to solve this. As Brexit has cost the country 5% of GDP everyone who voted for Brexit should pay higher taxes to cover this cost

No the cost wouldn’t be spread because of all the income types that is nic free. Only workers would pay and only workers earning over £12k. Whole swathes wouldn’t pay, I.e. pensioners, buy to letters, people with dividend or interest income, etc etc.

You're right. Increasing base rate income tax would be better. Let's raise the bar and expect the government to actually do the right thing instead of what's politically expedient.