Which taxes should Burnham put up?

[Toohotforwork]

It seems pretty clear that in the Autumn we are in for another massive tax rising budget. Starmer has done of the ground work to show what we need to spend and how there isn't any money, I'm sure the "blackholes" were co-ordinated with the new team for messaging. Labour don't have it in them to cut the welfare bill and to be fair the Tories didn't either - so I can't see that changing.

Which taxes would up increase to fund the country properly?

Personally I'd go the easy route and put 1 or 2p on the basic rate of income tax. It would break the manifesto but one short sharp initiative has got to be better than death by a thousand small increases.

I think the care proposals of getting rid of inheritance tax and replacing it with a 10% charge on everyone is very sensible.

Equalising income tax and capital gains tax seems an easy win as well.

Absolutely we need much more social (and truly affordable) housing to replace those sold off by right to buy under Thatcher.

If we want to scrap private landlords we need far, far more social housing.

Not sure anyone said that ? Nothing wrong with private landlords. There is everything wrong with a system which drives the poorest in society to have to fuel their profits though.

I am not sure what your point is? The “poorest in society” do need to live somewhere. And if we don’t want the housing element of UC going to private landlords, we need to provide suitable, affordable housing. Which we currently do not have anywhere near enough of. Disincentivising private landlords whilst simultaneously knowing that we don’t have enough social housing stock to cope with demand is a decision by the government which I frankly do not understand.

We spend more or less the same on welfare as a proportion of GDP as we did in 2010 under austerity and as we did in the 80s under Thatcher. We spend vastly less than many comparably advanced nations - and are roughly average overall. This proportion of spending didn't slow economic growth under Thatcher so I don't know why it would be blamed for doing so now.

I agree though that it would make sense to raise taxes on middle income earners if we can't find a way to tax the super rich who are getting away with contributing very little. Middle earners do pay very low tax rates compared to other comparable nations.

I’m familiar with that welfare statistic. What I would say is that the number of net economic contributors (taxes paid vs benefits received) is falling, and we are borrowing more and more to keep the show on the road.

That’s depressing. And the question has to be asked….why? Why are there now so far fewer net contributors?

Increase VAT by 2.5% so we all share the burden

Because what’s the point of working when my dh and I are leaving for work and nursery drop off at 730am… paying basically a grand for nursery and holiday childcare.. when others don’t work, get to stay at home and with the baby, be
there for all school runs and sports days and concerts, get extra money in the school hols?…

Lots of reasons, ageing population (less workers), larger ethnic populations many who don’t work (especially women), benefit tourists (free NHS use), many who work for minimum (16hrs) for pocket money and no real benefit for the economy, abuse of the sickness benefits system, and generally a welfare system that’s just been far too generous.

A welfare system that is too generous nails it for me. When society makes it easy to do nothing and still pays benefits, then it is unfair to anyone funding the benefit payments. I know there are people who can't walk or talk and who need 24x7 care, and I am excluding anyone in that category from this post. But most of the rest could, under slight duress, work harder and earn more. I don't hate disabled people (that's normally the riposte) and there do need to be accommodations and workarounds. If you can work, you should work.

They shouldn’t have raised the 2 child cap.I am so sick of this c**p party who do nothing for working class people

And that’s why as a 59 year old higher rate taxpayer who has been paying tax continuously for 43 years I’m reducing my hours so I no longer pay higher rate tax. I’m sick of paying for this yet if I want a gp appointment I have to wait weeks. The money is being spent wrongly and isn’t helping me.

i have many friends doing the same. People are so fed up with this.

We spend more or less the same on welfare as a proportion of GDP as we did in 2010 under austerity and as we did in the 80s under Thatcher.

Context is everything.

I wrote this earlier:

A fairly stable welfare spending figure as a %of GDP is useful, but it doesn't tell us what happens next. It doesn't tell us what happens as the population gets older, healthcare costs rise, people live longer, or there are fewer working age people paying into the system.

No comparison with the Thatcher era changes those facts. The UK today has a much older population and far more people depending on those of working age than it did in the 1980s. Looking only at welfare spending as a share of GDP without taking that into account risks drawing the wrong conclusion.

A statistic can be accurate and still not tell the whole story. Without the wider context, it doesn't answer whether current or future welfare spending is affordable or sustainable.

Until the ideal council housing is built, at the huge scale required, I would like to know how you would accommodate people needing housing. I am a commercial landlord, and there is no way on earth that I would be persuaded into letting residential accommodation. There is a reason that private landlords are selling up.

"You get more of what you subsidise", as the saying goes.

Similar age here and I am seriously considering this too - I'm fed up of working full time for what feels like little in return. I might see what benefits I am entitled to.

Well, as commercial rent is not subsidised, and my commercial tenant wants the building long term, they pay the rent agreed in the lease they signed several years ago. As I said above, I would NEVER deal in residential property.

Charge private schools more 🤣

A year or so ago I was personally paying over £50k a year in income tax and employee NI. I have now dropped my earnings to under £100k. Paying 62% marginal income tax and NI for a broken state was just too much.

I'm not even close to earning six figures (an age quirk) but we are at the wobbly point where we are not sure whether we are above or below the published ranges. In our case, it is all earned. Everything we inherited has been transferred down a generation by deed of variation.

"You get less of what you tax"

I don't blame you.

I am sick of people who are largely immune to the consequences of their own policies using the productive as a scapegoat.

There is immense bitterness and hatred of others success in this country.

Just look at the delight in sticking it to the private school parents (that includes me) with VAT.

If you want nice things you need to earn it.

Ah, you missed the memo. The ceiling for nice things is rented accommodation and £39k a year. Do keep up dear.

Absolute bollocks.

The burden wouldn’t be shared fairly.

Hospitality as a sector would be disproportionately affected as they pay close to the VAT rate on all food sales. Almost 0% is claimed as a VAT refund as the stock in (meat, veg, fish, cheese, flour, rice, pasta, sugar, dairy etc) is 0% rated but the product out is currently 20% and by this proposal 22.5% rated). None-alcohol food businesses would be paying over 20% of their turnover (not profit) straight to HMRC on top of the disproportionate impact of NI reforms, energy rises, food inflation, min wage rises etc. Hospitality is already going bust at an alarming rate. I know many on the left sneer at small business owners but every time one of them closes down you get more unemployment and another shop standing empty on an increasingly desolate high street. The pie becomes smaller.

As a proportion on income, the poorest pay the highest rates of VAT. People have to buy basics such as clothes and energy even if they avoid VAT on food by never buying a biscuit or packet of crisps or an ice cream or some sweets. While someone buying a £60 coat will currently pay £12 VAT (proposed £13.50) whereas a rich person buying a £600 coat will pay £120 VAT (proposed £135) so the rich person pays more, there are more options for the rich person to buy a different coat for £500 (VAT £100/£112.50) whereas if you are shopping in the £60 market and want something actually warm and waterproof and that will last a few years you have fewer places to go in the £50 price bracket. I think it’s already a bit of a pisstake that someone buying a £60 coat is actually buying a £48 coat and handing £12 to HMRC as it is without increasing it. The store owner maybe bought the coat wholesale for £30 (VAT £6) so makes £24 after VAT on a £60 sale whereas if it was £60 worth of steak and chips with ingredients costing £30 they would make £18 but would have higher staffing, energy and equipment costs than clothing retail. Tbf, the mark up would be higher (maybe the ingredients would be £20) and their google reviews would be full of economically illiterate half wits saying “I paid £35 for steak and chips but you can buy a steak in Tesco for £9 and spuds barely cost anything. Absolute rip of! Avoid!” without any consideration for any other expenses plus the, frankly enormous and unsustainable, tax burden.