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.

This would never work and would be grossly unfair. If dividend tax rates were the same as personal tax rates Limited companies would close and everyone would become self employed. Before a director is able to take a dividend the company has already paid between 19-25% in corporation tax. I hate this whole tax everyone twice mentality.

If capital gains tax rates were increased you could wave goodbye to any form of investment in this country. Anything that could be subject to CGT and been paid for wil tax paid income.

We need to stop this race to the bottom mentality.

Same, or holidays. Completely unfair when so many FT working families struggle. Gravy train needs to stop. Benefits only for those who meet means test way forward. It should be a safety net not a hammock.

Both parents incomes used in benefits calculations for children with an expectation that parents will endeavour to provide. No “I run my own company so only earn 1p a year” or “I only work 16 hours”. When you aren’t entitled to benefits you are expected to work overtime and second jobs to provide for your family. Dads who don’t earn enough should be allowed a managed payment system where the money is paid for the dc via taxation but collected with interest over a longer time period - through tax codes or like the student loan system.

Widening VAT to cover all shit food eg ready meals, cakes, upf sauces, all crisps. Removing children’s clothes exemptions except school uniform, which I admit is difficult to police but why should a Versace jacket be VAT free for a 14 yo? Tbf I think the vat rate is far too high and business would be relieved hugely by a reduction but lots of the exemptions are daft.

Increasing the threshold for depression and anxiety as a reason to claim benefits. Inpatient and acute care, psychosis etc fair enough. “I get anxious if I have to talk on the phone” - too bad.

The school transport system needs to be tackled. £2.3 billion per year. £12 million for every school day.

People need to accept that if they work reduced hours in a zero skill job then they will be on the bones of their arses. It’s not the taxpayers job to bring your standard of living up to that of someone working full time in skilled work.

More Road/vehicle tax - particularly for big/heavy cars. but better subsidised public transport.

IHT on all estates at 10% - you don’t need it and all this hoop jumping to avoid it is ridiculous. Exemption for surviving spouse but it is due of the 2nd partners death.

I work in the NHS, and yes, missed appointments are an issue. It would be very difficult to collect fines for missed appointments and even more difficult to prove they have been actually given the correct info. As soon as you move away from paper/post to digital systems you get “whatabouteried” back again.

The bigger issue is obesity, followed by unfitness, followed by rocketing levels of alcoholic liver disease. Charges should be introduced for people refusing to change their lifestyles in a timely manner. Money is a much bigger motivator than just being generally healthier.

How will aggressively taxing the super rich work? I doubt any of them are doing anything illegal but so many have already left the UK because of the tax situation and this will have heavily reduced the amount of tax received by HMRC and has contributed to the dismal state of the economy.

We need to encourage these people to invest in the UK and therefore tax should be fair, at the moment so many other countries are a more favourable proposition.

Well, they could separate out dividends from passive investing and equalise that. Dividends paid in lieu of salary are a completely different thing, I agree and are, in effect, double taxation.

Taxes on dividends have been increased a few times over the past years. There's no long much difference in tax between where, say, a tradesmen is a sole trader compared to where they have a limited company and take the "optimum" mix of wages and dividends. At some profit levels, the wages/dividend route now produces a slightly higher tax liability, so the "stampede" for tradesmen etc to convert to limited companies as started by Gordon Brown is now over, with lots of people closing down their limited companies and reverting back to being sole traders.

Agree. We need to get over “all businesses are run by fat-cat baddies” and realise that supporting business is the only way to growth and job creation.
The VAT threashold in small businesses should be revisited - they encourage criminality and disincentivise growth, but people earning above minimum wage for grafting in a small business that they have set up is not inherently bad. We can’t build an economy solely on public sector, benefits and “foreign investors”. Someone needs to run independent shops and restaurants unless we want a sea of Tescos and Nexts with the occasional Greggs.

Passive income should be taxed is a way that still makes people want to invest, but doesn’t mean people are earning more than actual working people tax free. Encouraging investment is really important.

The VAT threashold in small businesses should be revisited - they encourage criminality and disincentivise growth, but people earning above minimum wage for grafting in a small business that they have set up is not inherently bad. We can’t build an economy solely on public sector, benefits and “foreign investors”. Someone needs to run independent shops and restaurants unless we want a sea of Tescos and Nexts with the occasional Greggs.

God, absolutely. Where is the investment in home grown start ups, small and medium UK businesses, growth? The VAT threshold is too low especially given the huge rise in inflation.
I know the restaurant business well, and so much fiddling goes on to stay under it!

Until people realise that socialism is incompatible with economic rationality, it won't happen. The most sensible economic policy is the one that encourages people to work more and for themselves because they want to earn more and realise that they will keep a decent % of the profits. That persuades a young chef that they should open their own food truck or restaurant, or a builder or mechanic or plumber or electrician to go it alone. Someone who has watched their employer providing a service poorly may decide they could do better and set up in competition, like DH did 34 years ago.

Hardworking people who are genuinely good at their jobs will prosper and the rest will opt for the security of paid employment. I'm not talking about doctors and teachers who need hospitals and schools, just the ordinary run-of-the-mill companies that actually employ more than 55% of all employees in the UK

I think this is the issue. Ultimately almost all of the super rich have the option to be globally mobile and people will go to nice places that have favourable tax regimes. This is why places like Dubai have seen an influx of wealth and Britain has seen a flight of millionaires and billionaires. The same goes for businesses. Why set up in the UK when you can set up in Ireland? You might have noticed that Ireland charges less corporation tax and has more favourable tax regimes than the UK. Look who has the enormous budget deficit and who has the surplus. Yes we will still get lazy left wingers banging on about taxing the rich and businesses more.

I do think Burnham is going to have to get to grips with the cost of pensions and benefits. There is, for anyone with access, an interesting article in today's Daily Telegraph about how Slovakia has managed to taper the rising costs of pensions without a revolution.

I think most reasonable people accept that the triple lock has to go. Slovakia has kept the link with average earnings and wages, but capped it at 95% of the annual increase. This is modest enough to be acceptable to most, and probably also just enough to encourage even those on fairly low wages to save a bit more towards their older years.

but where does all the profits come from, when you already have various established industries and companies and globalisation ?
how many high street names are going under ?

That, to me, is the problem with deciding which taxes should be raised under this Government. I have little confidence that AB will make the difficult decisions needed to control public spending, and even if he wanted to, I doubt the backbenchers would allow it.

As Pat McFadden is reported to have said:

"Every meeting I have is: 'Who can we tax in order to pay benefits to others?' They're asking the wrong questions."

So why should a rational taxpayer trust that higher taxes will be spent wisely? I need a bit more than blind faith.

A lack of trust has real world consequences. Just look at the number of people who started drawing from their pensions early because they feared the Government might reduce or remove the tax- free lump sum. Whether those fears were justified or not is almost beside the point. The mistrust alone changed people's behaviour, given that some people may blow through that money there is likely to be a longer term cost to taxpayers that might not otherwise have existed.

I have a few years until I can retire, and the uncertainty has certainly influenced my decisions. I'm not putting another penny into my pension until the Government stops playing around with them. I don't care about the compounding I'll miss out on. I work to support myself and my family. The state benefits from the taxes I pay, not the other way around.

I'd say it should be reduced! Part of growing a business is that it needs to be sustainable. Too many business seem to grow to the threshold and then determine that they aren't really viable but continue to sort of fudge along. If they took it down to say £40,000 hobby businesses could continue without but then businesses would be proven to work earlier and then not face the cliff.

Johnson has a similar problem with his backbencher, called an election and deselected all the ones that didn't agree with him, but he had a single issue he had to deal with. I just can't see that happening again - an MP's never going to get deselected for being too soft on benefits.

Windfalls like lottery wins could be taxed like they are in other countries.

Death by a 1000 cuts it is then.

Agree 100%. This politics of spite and envy against entreprenneurs, self employed and business owners is doing massive damage to the economy.

The VAT threshold really has to be increased. Several of my clients are deliberately holding back their small businesses so they don't get caught by it, including shops, guest houses, tradesmen etc. The thing is that once you exceed it, you have to pay VAT on ALL your sales income, not just the excess, so you can end up several thousand pounds worse off by a very small increase in turnover. I've got clients who are shops that have cut down the number of days they open, a guest house that's shut down it's top floor of rooms, a takeaway that doesn't open at lunchtimes anymore. It's utterly stupid that our tax system is a barrier to growth.

@Badbadbunny its the typical spiteful “who do they think they are… think they’re doing so well don’t they!!”

generally said by those who are net takers, have never contributed and see tax payers as idiots for working, but are happy for their lifestyle and the generations before and after them to be fully funded by them, cos entitled init.

Whilst I think there is some spite on both sides, I thinking conditioning has a big part to play in that mindset. It's also not helped by the people (government) who should be helping you up just giving you hand outs and effectively legitimising your frustrations.

I would ALWAYS prefer to buy anything from someone local and in business for themselves than from any global scale business. Okay, it's not easy for some things, but I would never buy a new car, and I prefer to stay away from the big dealerships for servicing. I eat seasonally where possible and prefer to shop in my local market town for food, trying to take as many links out of the food chain as possible. Detergent and loo paper come from the supermarket.

I think 1,000 cuts would make people happy. Death by 1,000 tax rises!

Quite. You have to turnover thousands and thousands more just to stand still. Why bother? Take 3 months off instead.

I can see an arguement for lifting the threshold massively, but also reducing it to barely anything - say £5k a year, so basically everyone pays it and the cliff edge is gone. The rate is spectacular too. In Germany hospitality pays 7%, France, Spain and Italy pay 10%, Ireland pay 13.5%. People can afford to go out an eat and businesses are still profitable. We pay 20%. No wonder so many businesses are laying off staff and shutting down. 20% of sod all is what gets paid as businesses close. I would be so on board with a 10% hospitality tax on all hospitality and dump all the faffing about for receipts to deduct the 18p VAT you paid on x/y/z. People wouldn’t be bending over backwards to save 7-10% of a proportion of their turnover the way they do to stay under the threshold to not pay anything at all.

What about tax avoidance vehicles for wealthy families? Check out FATFIRE subreddit, it is eye opening.

One chap with £15 million was told exactly how to set up an FIC so that he could essentially leave it to his kids without inheritance tax rules applying. Also meant that he could earn and take out loans against the company, essentially tax free.

Whereas a comfortable couple who aren't as financially clued up on this, with say a £700K house and £400K pension/other assets between them, will have an estate that will require the payment of inheritance tax.

I would also make the categories for what you can spend PIP on more limited - and proof that it's being spent on that

That would be very expensive to administer. Currently there are no "categories". What categories would you suggest? @SirChenjins