Agreed. However, if you create good infrastructure and an environment with a high standard of living and good trade links and fair tax rates they will pay more than they are paying currently in order to access this. As for all other voters they will do what they perceive to be most beneficial to them, but these ones generally do tend to make logical decisions because they have a host of professional advisors ensuring that they are told what is the rationally beneficial decision and rather than voting at the ballot box they vote with their feet. Meanwhile we can reform things like transfer pricing to ensure that profits are taxed in the country in which they are generated and other similar measures that are proportional and reasonable could be implemented in a non-damaging way that would be accepted (as opposed to the madness proposed of trying to tax non-doms inheritance tax on their worldwide assets - which genius came up with that idea? This is the type of thing that shows the level of cluelessness we’re dealing with here in the political leadership. What did they think would happen!?).
People in the middle who own properties that the Government deems to be expensive (like they really wanted to take out huge mortgages to have a secure roof over their heads and had any control over this) or who earn decent salaries that used to be comfortable but on a PAYE basis are easy targets but the limits of taxing these people more and pretending that they are “rich” have been pushed to the extreme already and have been shown to be having a “Laffer curve” effect with people retiring early, cutting hours, emigrating etc. In HMRC data there is “bunching” between each earnings threshold where more punitive measures kick in, showing the adverse behavioural effects of these policies and that they lower overall tax revenue. These are our most productive people, often in skills-shortage areas, and those whom the UK is currently very disproportionately reliant on for tax revenue in comparison to other countries due to our top-heavy tax system, and this approach to revenue raising cannot be pushed much further (if at all) because, as we’ve seen in recent years, raising further taxes on this group above the already high levels actually reduces overall tax revenue rather than increasing it because they simply cut hours/ leave/ retire etc. Ultimately, nobody is going to work for free.
Similar disincentives exist at different levels of earnings due to the withdrawal of child benefit, and for those claiming universal credit because the taper rate is far too high still. Tax policy should incentivise work, not the opposite. But none are as bad as the £100k cliff-edge which is patently absurd and does a lot of economic harm, as well as increasing the need for immigration (which many posters seem to not want…). No other country I’m aware of structures their tax system like this. The way tax law around employees and contractors has been designed similarly distorted the market. There are so many examples, all entirely within Government control to fix and well evidenced, so tax reform should be a top priority to smooth out rates and remove disparities between different types of income (with still some incentives for investment that carries risk) and also to ensure that households are taxed or given welfare based on household income, not individual income, otherwise you end up with immense distortions which is why, again, no other comparable developed country that I’m aware of structures things in this way.
It isn’t a question of people’s moral beliefs or preferences but economic and mathematical fact that the UK can’t possibly fund the type of public services which the UK public is demanding unless lower and middle earners pay more because of the numbers of people in each group. It’s literally a mathematical impossibility.
The only credible options are:
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cut public services significantly;
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raise taxes on middle and lower earners significantly;
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reform public services and institutions so that you can redirect public spending to productive parts of the economy that will generate growth and higher productivity and raise living standards (i.e. a healthcare system more similar to those in France or Germany, means-test state pensions and mandate auto-enrolment with higher contributions (including from self-employed people), reform the tax system to remove cliff-edges and disincentives harming investment and economic growth and investment in new technology, remove unnecessary trade barriers that are harming economic growth, invest in a proper industrial strategy, total reform of education with a much increased budget and with focus on diversification to different routes through technical training and meaningful apprenticeships designed in partnership with companies that lead on to proper career routes for those who aren’t academic, a very large investment in our infrastructure that’s been run into the ground, provide support for small businesses to export and form clusters of start-ups in the sectors where we have a good knowledge base and competitive advantage… etc). And, meanwhile, reform the tax system per my comments above so that it actually encourages economic growth, work and investment.
Nobody likes 3) because it’s “too complicated”, can’t be put into a three-word-slogan, will take a while to have effect and will mean that some people have to give up some things that they like receiving currently. But given that 1) or 2) actually wouldn’t improve things sufficiently to make the long term sustainable anyway - only provide a short-term reprieve if they were implemented, which isn’t happening anyway because “CAKE!!!” - 3) really is the only viable option if the country is to have a positive future trajectory and I just wish that any political party would have the decency to explain this reality to the public and put forward a sensible policy prospectus before it becomes impossible and option 3) becomes almost unachievable.
I like to think that if they did so a sufficient enough proportion of the UK public, who are fed up with all of the extremist nonsense, would get behind it, because what alternative is there? I like to think the “silent majority” is actually the bulk of sensible, normal people who just want to get on with their lives and have a competent Government in place that they can trust to be making sensible, rational, moderate and not ideological decisions. But perhaps I’m being too optimistic to think that. Or perhaps all of our politicians are just too self-interested and don’t care about what the country actually needs but only their own careers and elections hence the extremely damaging short-term thinking.
Based on the discussions here, I won’t hold my breath for there being any positive change and fully expect the doom loop to continue, and most likely accelerate.