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?

Given these seemingly endless and imminent tax hikes haven't even been announced yet, I can't say!
And neither can you.
But IHT or CGT are irrelevant to me and I expect the rich will find ways to get round it as usual.

People have a personal tipping point. They put up with tax and other deductions for a while, but the time comes when they hit the point and say sod it and start taking actions which ultimately reduce tax take, whether going part time, refusing promotions, taking early retirement, putting into pensions or emigrating.

Its classic behavioural pattern where you can put up with something but ultimately something will tip you over the edge, sometimes even the slightest thing. It’s not the last thing itself, it’s the cumulative effect.

Tax hikes also make people think - they look at their payslips more, they think of their tax demands more. People live busy lives and don’t really notice lots of small things but when they do notice, or see things on the media, it highlights the issue and triggers them to consider changes etc.

The clients I’ve had who have emigrated have never done it on a whim - it’s something they’ve been thinking of for years, but it’s often a relatively small thing that triggers them to actually do it.

Hi, Wanted to share a example of our tax rules hurting UK manufacturers.
I work in UK manufacturing, we are investing/growing. To do this we offer extra hours to our machine operators etc, As wages have grown with inflation many of our team are hitting the next tax bracket and see any extra hours as not worth it anymore as the treasury takes the extra. Our output is then restricted and economic growth is slowing. We have many job opportunities but manufacturing positions are hard to fill with current/younger work force.
I hope the new government does not hit workers/savers with extra tax.
A wealth/asset Tax for the Top 2% is something I would like to see introduced but think we are a few years off that as it's a global approach.

And despite all the anti-wealth rhetoric, you can be sure that anyone earning that much is providing something pretty useful.

@EverythingAllatOnceAllTheTime
I understand you don’t want to pay more tax. Can I ask why not? What is it you wouldn’t be able to afford anymore? Would it mean you would struggle?

If you’re paying tax then you’re not economically inactive. Economically inactive will refer to people who pay no taxes at all.

I get that

There are plenty of countries who will try to attract people who do leave

There's no point in trying to shame anyone as in pp, they are long gone anyway presumably enjoying their new residence and giving the admonishment from an mner no thought

Look to the politicians unable to foresee the consequences

If they do muck this up and keep asking for higher taxes from everyone, well nearly everyone, then look at that.

@Haroldwilson

Since 2009 NHS workforce has increased 30%, it's 1.5m people now (1.3m FTE). At the same time UK population has only increased 10% and proportion of elderly hasn't increased much.

We're now paying 20% of total tax take on NHS yet service is much worse than it was.

Isn't this obvious that throwing more money isn't the answer? that it needs fundamental reform?

The definition of economically inactive is that you're neither working nor looking for work not whether you pay tax or not.

And don't get me started on people who think that becuase you pay no income tax you pay no tax at all and are some sort of second class citizen.

If that’s true then I can see why the figures look so high. Many early retirees live off of income from trusts and investments and pay tens of thousands of pounds in income tax whilst doing this. I wouldn’t consider that to be economically inactive.

I regard economically inactive as not working and doing something like providing a service or making something. We’ve a worker shortage crisis so everyone who can work should be incentivised to do so. Paying a bit of tax isn’t really helping when we can’t fill vacancies. And unless you’ve got massive investments and paying thousands in tax, you’re not paying your way in terms of public services and benefits you’ll benefit from.

@Fluffypuppy1 I am an example of a person who could be economically inactive.

I'm under State Pension age but have an occupational pension I could live on. I choose to work 3 days a week for some extra cash to put away for a rainy day and support my caravan habit!!

Was austerity such a failure that now we get more austerity just re branded?

I heard an interesting discussion on the radio with various experts.
Country debt is not uncommon most rich countries have debt and that actually the debt v gdp was normal. Same in States etx

Economically inactive is defined as 'People not in employment who have not been seeking work within the last 4 weeks and/or are unable to start work within the next 2 weeks.'

There are 9.2 million, which is 700,000 more than before covid.

It does include retired people of working age, as well as students It doesn't include the 336k unemployed people @Anonym00se mentions.

You can see the breakdown of reasons here: https://www.statista.com/statistics/280292/uk-economic-inactivity-by-reason/

Likewise, I’m just turned 60, son has left home and is fully independent. OH has cancer but still working. I could retire as we have low living costs and decent savings. I’ve cut down my working hours and work flexibly around OH caring and hospital appointments, etc. I feel working is important for my health and sanity and ai don’t intend giving up even at state retirement age as long as mind and body allow. It doesn’t stop me pursuing other interests and hobbies. But then I come from a family with a string work ethic as does my oh. But a big tax hike would probably mean I’d say sod it and just give up the work.

THIS IS SPOT ON.

Interesting viewpoint, thank you.

IHT is the one that concerns me, currently within the 1m limit but if things change will be looking for advice from a professional in how to get around this. I find it totally wrong to tax on wealth a family have built which for most will just be from rising house prices (in other words property rich rather than cash rich)

I’m one of those who agree with you.

Income taxed on the way in, on the way out, and then assets hit when you die.
IHT is morally reprehensible.

Isn't this thread very MN? Most of all because it's full of fearful moaning.
Secondly because it's rich people talking tax reduction.

At least, very old MN, how it was before the anti-men brigade flooded in. Refreshing change from that misandrist obsession, I suppose.

Well the higher tax burden may well be yours soon. So you can enjoy at leisure

France is flat rate 19%, plus 17% social charges, reductions over time asset is held for.
Germany 28.63%...

Both countries exceed UK productivity and investment.

UK can never ever match zero rate jurisdictions.

Super Rich? Subjective but not anyone primarily on PAYE.

I would have several rates for both IHT and CGT, do you think Sunak should pay more than 20% on his investment income from his USA investments?

I want better public services. I want the Army to be well equipped, junior doctors to be fairly paid, potholes to be filled, libraries to stay open, kids to find a school place. Definitely would like to enjoy those things getting closer to reality.

And how do you propose to fund it all?

Squeeze the existing tax base until the pips squeak? Cut services elsewhere? Get the out of work, into employment?

We are already at a post war high tax burden.

There is no point saving a few £100s in tax if it means you pay out 1000s for dental treatment or have a large repair bill for suspension damage when you hit a pothole.

Having more money to spend as you wish, is all very well for some people but for the majority it actually means it ends up costing more.

We also need to look at the bigger picture, business won't invest in the UK, if we have poor health services, expensive housing, rubbish public transport and a badly educated workforce.

These things matter to business as much as tax rates do.