The Labour Government

Chippy_boy said:
It's unrealistic I think for people to expect to pay only 20% tax on earnings up to £50k per year and expect that is enough to pay for all the public services people aspire to us having. We have got used to a basic rate of tax that is IMO too low.
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This is absolutely correct. We currently pay £ for £ less tax than the majority of Europe therefore we should expect to get much less value in terms of services.

What some people want is to pay no tax and somehow expect to get everything, or blame immigrants for the shortfall. Meanwhile the socialists want the rich to pay for everything whilst they implement policies that will ensure they don't stay rich for very long.

The answer is something fair and equitable which is we all must pay our fair share and a little bit more. I don't think there will be too many complaints if public services then suddenly start to work properly.
 
Churchlawtonblue said:
Yep all pensioners should just sell their home and downsize, not that easy when you have a strong emotional attachment to it and the state may require the money for your care at a later date. Many things in life are not straightforward Kobay. I guess you weren't aware of those things ?
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Also costs a bloody fortune to move home with all the fees etc. also, no one should be forced to sell their home
 
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Chippy_boy said:
They reduce maximum pension contributions eligible for tax relief already. The limit is £60k now but if you earn too much it reduces down to £10k (2022/23 tax year minimum was £4k, effectively making it pointless for anyone earning a high amount to bother with a pension. Why on earth put money into a pension and get (almost) no tax relief, for the privilege of having your money taxed again (i.e. twice) when taking it out.

If hell bent on tax increases, I think the best bet would have been to up the basic rate to 22p or 23p something like that. It would raise a shed load of money and if you combined it with an increase in the personal allowance, you would ensure that anyone at the bottom end was better off, middle earners were neutral and only the better off were net losers, but they can afford it.

It's unrealistic I think for people to expect to pay only 20% tax on earnings up to £50k per year and expect that is enough to pay for all the public services people aspire to us having. We have got used to a basic rate of tax that is IMO too low.
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Yes but the taper starts at... wait for it ...£260k !

To quote the government website "The annual allowance is tapered (reduced) for higher earners. It is reduced by £1 for every £2 someone earns over £260,000 (including pension contributions). Tapering stops when the annual allowance reaches £10,000."

By that point you really are in the realms of being able to have a good tax accountant to avoid it.

I've said it before, but the Scottish income tax bands make sense to me and seem fair.

https://www.mygov.scot/income-tax-rates-and-personal-allowances
 
Mr Kobayashi said:
Better than freezing to death though isn't it?
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You surely can’t favour moving a huge part of that unspent asset wealth in to the hands of banks and hedge funds?

That makes the wealthy more wealthy and the treasury loses out on at least two levels; firstly it impacts inheritance and thus reduces inheritance tax (less money for treasury) and secondly it is also likely to impact how much you can contribute to any social care to basically whatever cash you have in the bank (more money out the door for the treasury).
 
metalblue said:
You surely can’t favour moving a huge part of that unspent asset wealth in to the hands of banks and hedge funds?

That makes the wealthy more wealthy and the treasury loses out on at least two levels; firstly it impacts inheritance and thus reduces inheritance tax (less money for treasury) and secondly it is also likely to impact how much you can contribute to any social care to basically whatever cash you have in the bank (more money out the door for the treasury).
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All good points. Which is why it's better for them to downsize. Plenty of over 55 accommodation being built. Or could go for a bungalow.

Newer buildings tend to be more efficient to heat.
 
Mr Kobayashi said:
All good points. Which is why it's better for them to downsize. Plenty of over 55 accommodation being built. Or could go for a bungalow.

Newer buildings tend to be more efficient to heat.
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That’s absolutely the sensible choice, people are emotionally attached to homes though.

All the same arguments that were made when the so called bedroom tax came in.
 
metalblue said:
That’s absolutely the sensible choice, people are emotionally attached to homes though.

All the same arguments that were made when the so called bedroom tax came in.
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That was crazy though. Kids having to move school and all sorts. Another Tory policy now too expensive to reverse.
 
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meltonblue said:
It didn’t go down, it went up but by not as much as they expected even post allowance for changes in behaviour and that rearrangement of earnings.
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It did got down. The 50p rate was introduced in April 2010 as reflected in the 2010-11 figures below, from the HMRC. Look what happened.

Now some of the tax in 2009-10 was due to people hurriedly paying themselves more in that year, in order to avoid the 50% in the following year**. So the effect is exaggerated. But look at 2008-09 as well, still much higher (with a max 45% rate) than 2010-11 with the 50%. Even in 2011-12, at 50% it was still bringing in less.


** which kind of proves my point: A lot of wealthy people have flexibility in their earnings and can rearrange their affairs in order to reduce their tax bills, if rates get too penal.
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Vic said:
That was crazy though. Kids having to move school and all sorts. Another Tory policy now too expensive to reverse.
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I was thinking more about the elderly who, for obvious reasons, didn’t want to move from their social house. In fairness they wouldn’t have had as many options on where to go etc so it’s not exactly comparable but we have huge emotional attachment to our homes.

I agree the bedroom tax was far more complex and policy getting made before capability to deliver it fairly was there.
 
Kompany Car said:
Yes but the taper starts at... wait for it ...£260k !

To quote the government website "The annual allowance is tapered (reduced) for higher earners. It is reduced by £1 for every £2 someone earns over £260,000 (including pension contributions). Tapering stops when the annual allowance reaches £10,000."

By that point you really are in the realms of being able to have a good tax accountant to avoid it.

I've said it before, but the Scottish income tax bands make sense to me and seem fair.

https://www.mygov.scot/income-tax-rates-and-personal-allowances
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Them Scot’s are going to run out of band names if they want to add more…

The bit in the middle band
The bit just after the bit in the middle band
 
Kompany Car said:
Yes but the taper starts at... wait for it ...£260k !

To quote the government website "The annual allowance is tapered (reduced) for higher earners. It is reduced by £1 for every £2 someone earns over £260,000 (including pension contributions). Tapering stops when the annual allowance reaches £10,000."

By that point you really are in the realms of being able to have a good tax accountant to avoid it.

I've said it before, but the Scottish income tax bands make sense to me and seem fair.

https://www.mygov.scot/income-tax-rates-and-personal-allowances
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Sorry, missed the bit about the Scottish tax system. I don't have a problem with the rates generally and certain aspects I like but it does seem overly complicated to me.

Personally I would advocate a system that is as simple as possible.A huge loss to the exchequer in terms of tax revenue collection is incorrectly completed tax returns. People either deliberately, or more typically accidentally, filling it in wrong because the rules are too complex.

So I would go for something really simple like a personal allowance of about £20k. (I don't think anyone earning less than that should be paying tax, because life on those incomes is tough enough as it is. That takes millions of people out of the tax system altogether, which I think would be a great thing to do.

Then I'd have probably a 25% basic rate up to earning of around £60k. And then perhaps a 47% rate over that. And that's it.

I'd have to play with the maths to make it add up. But you could play with the maths to make it add up. Anyone earning less than £20k would win, obviously. The break even point would be around £35K with anyone below that better off and anyone above it, worse off but not by much for most people. Someone on £100k would be £2.5k worse off - and could easily afford that. And of course anyone on much more would be paying a lot of their income at 47% not 45%.
 
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