What's a good salary?

[west didsblue]

There's some horrible unfairnesses in our current tax system. One such is the difference in household take home pay, if you have 2 people working versus 1.

I am the sole earner in our household and therefore I get one personal allowance (if I get any at all) and one lower rate band and most of my income is taxed at the higher rate. As compared to my neighbours who both work and who both earn roughly half what I earn. They get 2 personal allowances and at the same time, most of their income avoids higher rates of tax.

The net effect when I last worked it out was that they were about £35 per day, better off than us, every single day. A free meal out, on us, every day. And this is with their household earning precisely the same as ours earns. How can that be fair?

And incidentally, we have no kids, so unlike them we didn't get child benefit either, whereas they do.

Yet I am on of the "rich" who Corbyn wants to tax further, whilst leaving my neighbours untouched. Incidentally, my NHS-employed, 12 weeks holiday year, Labour voting neighbours.

I've had 3 days off this year and had to work weekends and actually on the days off as well. But I am not paying enough tax, apparently??!?! Whereas my neighbours who pay £10k+ less tax are paying more than enough and in fact deserve more benefits.

I can assure you that the extra £12k they receive per year will be more than used up on bringing up their children and they will have less disposable income per year. Any additional benefits they get for having children would also get swallowed up by the costs of bringing them up.
If you were to say that it's their choice to have children and why are you penalised for not making that choice, remember that their children are the taxpayers of the future who will keep the economy afloat so it is actually them that are doing you a favour.
If you had children, you would also save a fortune in child care compared to if your wife was working. A second income often covers not much more than child care costs.

 

[taleofbluehalves]

There's some horrible unfairnesses in our current tax system. One such is the difference in household take home pay, if you have 2 people working versus 1.

I am the sole earner in our household and therefore I get one personal allowance (if I get any at all) and one lower rate band and most of my income is taxed at the higher rate. As compared to my neighbours who both work and who both earn roughly half what I earn. They get 2 personal allowances and at the same time, most of their income avoids higher rates of tax.

The net effect when I last worked it out was that they were about £35 per day, better off than us, every single day. A free meal out, on us, every day. And this is with their household earning precisely the same as ours earns. How can that be fair?

And incidentally, we have no kids, so unlike them we didn't get child benefit either, whereas they do.

Yet I am on of the "rich" who Corbyn wants to tax further, whilst leaving my neighbours untouched. Incidentally, my NHS-employed, 12 weeks holiday year, Labour voting neighbours.

I've had 3 days off this year and had to work weekends and actually on the days off as well. But I am not paying enough tax, apparently??!?! Whereas my neighbours who pay £10k+ less tax are paying more than enough and in fact deserve more benefits.

Totally agree. Mad how 2 people can earn more and be taxed less.

 

[SWP's back]

I can assure you that the extra £12k they receive per year will be more than used up on bringing up their children and they will have less disposable income per year. Any additional benefits they get for having children would also get swallowed up by the costs of bringing them up.
If you were to say that it's their choice to have children and why are you penalised for not making that choice, remember that their children are the taxpayers of the future who will keep the economy afloat so it is actually them that are doing you a favour.
If you had children, you would also save a fortune in child care compared to if your wife was working. A second income often covers not much more than child care costs.

It’s nothing to do with the children mate and everything to do with the tax he’s paying compared to them based on two incomes rather than one, not about tax credits or child benefit. You may have skim read and missed that.

 

[west didsblue]

It’s nothing to do with the children mate and everything to do with the tax he’s paying compared to them based on two incomes rather than one, not about tax credits or child benefit. You may have skim read and missed that.

I think the point I was making that if he had kids, he would still have the benefit of no child care costs due to his wife's availability to look after them which would offset much of the difference. If he compares himself to a DINKY couple he has a point, but he was comparing himself with a family with kids which, from experience will need every penny they can get. The fact that his neighbour earns half his salary would likely force his wife to work if they wanted to live their lives to a level they might want due to the fact that it costs a fortune to bring up kids. If his neighbour earned what he earned, his wife might have the option of staying at home.
So although he might be saying it's nothing to do with kids, he shouldn't be ignoring the fact that his neighbours have them.

 

[SWP's back]

I think the point I was making that if he had kids, he would still have the benefit of no child care costs due to his wife's availability to look after them which would offset much of the difference. If he compares himself to a DINKY couple he has a point, but he was comparing himself with a family with kids which, from experience will need every penny they can get. The fact that his neighbour earns half his salary would likely force his wife to work if they wanted to live their lives to a level they might want due to the fact that it costs a fortune to bring up kids. If his neighbour earned what he earned, his wife might have the option of staying at home.
So although he might be saying it's nothing to do with kids, he shouldn't be ignoring the fact that his neighbours have them.

Ok I get you.

 

[west didsblue]

Ok I get you.

Thinking about it further it’s not his neighbour’s fault that his wife doesn’t choose take advantage of the tax allowance available to her if she chose to work.

 

[Chippy_boy]

I think the point I was making that if he had kids, he would still have the benefit of no child care costs due to his wife's availability to look after them which would offset much of the difference. If he compares himself to a DINKY couple he has a point, but he was comparing himself with a family with kids which, from experience will need every penny they can get. The fact that his neighbour earns half his salary would likely force his wife to work if they wanted to live their lives to a level they might want due to the fact that it costs a fortune to bring up kids. If his neighbour earned what he earned, his wife might have the option of staying at home.
So although he might be saying it's nothing to do with kids, he shouldn't be ignoring the fact that his neighbours have them.

The kids have nothing to do with the argument tbh. I don't begrudge them the kids, nor the child allowances. But their tax advantages are not dependent upon them having kids, and it is a seperate point.

And anyway, their kids have now grown up and left home and they are now DINKs So the point still stands, that the neighbours earn more or less the same as me and pay vastly less tax.

 

[Chippy_boy]

Your problem Chippy Boy is as much down to your circumstances as to the tax system. I assume you work for someone under PAYE. There will be someone in exactly the same position as you but running their own business. How they get round the anomaly, is to either form a partnership and split profits 50:50. (There is no tax law that states profits must be shared on exactly the same basis as effort) OR, they form a limited company. Pay wifey a salary, but that can be challenged, if she is doing nothing ( but difficult to prove that) or, make her a 50/50 shareholder. Again no tax laws state dividends must be in pro portion to effort. If you were able to do this your overall tax bill would be lower than your next door neighbour if you went down the dividend route. As it stands if you are working for someone else under the PAYE system your stuffed. So your gripe is genuine.

Spot on.

 

[Chippy_boy]

Thinking about it further it’s not his neighbour’s fault that his wife doesn’t choose take advantage of the tax allowance available to her if she chose to work.

I appreciate people are coming to this discussion late and not catching the nuances. I have no beef with my neighbours. My beef is with the taxman. I do not want to penalise my neighbours - the tax system is working perfectly fine for them. It's not working for me.

 

[Chippy_boy]

So the problem there is that the single person would be paying more tax in that system while you would be paying less tax per person in your household while working less hours.
Hardly seems fair to punish someone because they aren't married for whatever reason that may be

But the single person has less outgoings than 2 people. I thought the point of a progressive tax system is that it's supposed to be vaguely geared around peoples' ability to afford it? And as it happens I'm working 100+ hours a week, so yours is a moot point anyway.

The government's defence in seeking to justify this injustice might be that we are both individuals, taxed individually and they don't want to change it to a system where we are taxed as a couple.

So in that case, and since my wife has no job, why can she not get unemployment benefit? So it's perfectly fine to treat us as a couple when it suits the government, but not when it doesn't suit?