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The Great Squeeze: Cost of Living Crisis 2022

The argument that taxing the rich disincentivises earning more is for the birds.

There are no circumstances where income tax takes half of ones earnings, therefore the worker will always receive the lions share of their earnings. It's a deliberately disingenous claim made by the super-rich to rile up those who aspire to have a salary which would even touch the top rate of taxation.

You could increase the additional rate of taxation by a further 5 % points and the same would remain true, incidentally.
 
WillPS said:
The argument that taxing the rich disincentivises earning more is for the birds.

There are no circumstances where income tax takes half of ones earnings, therefore the worker will always receive the lions share of their earnings. It's a deliberately disingenous claim made by the super-rich to rile up those who aspire to have a salary which would even touch the top rate of taxation.

You could increase the additional rate of taxation by a further 5 % points and the same would remain true, incidentally.
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That isn’t correct, you seriously think the super rich pay anything like even 40% of their earnings in tax? No they use dividends to cut their tax bill to 20% or offshore accounts to cut it to 0%.
Its a silly argument saying the rich should pay more and then suggest putting up the top rate of tax that they don’t pay anyway.
The people paying the top rate are Doctors, Headteachers, engineers, sales people etc etc, hardly super rich.
 
BigT said:
That isn’t correct, you seriously think the super rich pay anything like even 40% of their earnings in tax? No they use dividends to cut their tax bill to 20% or offshore accounts to cut it to 0%.
Its a silly argument saying the rich should pay more and then suggest putting up the top rate of tax that they don’t pay anyway.
The people paying the top rate are Doctors, Headteachers, engineers, sales people etc etc, hardly super rich.
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I didn't suggest putting the top rate of tax up, I was challenging the notion that taxation disincentivises work and pointing out that what I was saying would remain true even if that rate were to increase.

Headteachers earn up to £125k so do not pay the additional rate of taxation
NHS consultants earn up to £115k so would have to be doing a considerable amount of private work to get very far in to the additional tax band.

None of these will pay anything like 50% of their earnings in taxation as most/all of their earnings will be in the higher rate of tax. In order to get close to half of your earnings going to income tax you need to be earning £600k+

I agree that more should be done to stop tax avoidance and go after tax evaders.
 
Just while I am here, not a criticism but just wanting to point out - there will not be a Headteacher of a school in the UK on £125k. My head is on less than half that. The headteacher of a large secondary school with 2,000 pupils may be pushing £80-85,000 or £90-95,000 in London - but that sort of money is absolutely nowhere near the norm.

The only people on fat salaries like that in education are Multi Academy Trust CEOs, which have of course been created by the Tories.

Just for clarity!

Agree with points raised about tax.
 
Could the £125k salary for headteachers possibly be referring to private schools? I’d imagine the staff might get paid more at those establishments than in a state school, as surely the part of the tuition fees that aren’t reinvested into the students’ education goes towards staff salaries?
 
Matt N said:
Could the £125k salary for headteachers possibly be referring to private schools? I’d imagine the staff might get paid more at those establishments than in a state school, as surely the part of the tuition fees that aren’t reinvested into the students’ education goes towards staff salaries?
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No. Private sector pays no more in education - it's not like health.

£125k is, in theory, the highest pay point for a school leader in the UK. But... in theory, if you were paying that - you'd probably have to justify any salary over £100k directly to the Ed Sec.


@Matt N - most private schools are broke.


Sent from my SM-G991B using Tapatalk
 
AstroDan said:
No. Private sector pays no more in education - it's not like health.

£125k is, in theory, the highest pay point for a school leader in the UK. But... in theory, if you were paying that - you'd probably have to justify any salary over £100k directly to the Ed Sec.


@Matt N - most private schools are broke.


Sent from my SM-G991B using Tapatalk
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Wow; that surprises me! I’d have thought the tuition fees would make the schools richer, in a similar vein to universities.
 
Matt N said:
Wow; that surprises me! I’d have thought the tuition fees would make the schools richer, in a similar vein to universities.
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Yes but because they are private schools I'd assume they don't get the standard money per students that the department of Education usually hands out meaning they actually are just relaying on tuition fee's although @AstroDan will probably know more.
 
There probably are a small number of headteachers on £150k+, but to suggest that the additional rate of taxation is a burden carried by headteachers, doctors and sales people is disingenuous in the extreme.
 
Spare a thought this winter for those caught up in the cladding scandal as well. Those who live in blocks where the cladding has been removed, have had no other insulation put up to replace that in the cladding that was removed. With their energy costs spiralling, many simply can't afford to heat their homes. For many of those where the cladding is still there, they're facing extremely high insurance premiums and a flat that, if owned, is almost completely worthless. With their mortgages going up on properties in serious negative equity.
 
Matt.GC said:
Spare a thought this winter for those caught up in the cladding scandal as well. Those who live in blocks where the cladding has been removed, have had no other insulation put up to replace that in the cladding that was removed. With their energy costs spiralling, many simply can't afford to heat their homes. For many of those where the cladding is still there, they're facing extremely high insurance premiums and a flat that, if owned, is almost completely worthless. With their mortgages going up on properties in serious negative equity.
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You raise a really good point and something I didn’t think about. I wonder how long it will take until eventually all the cladding has been replaced?
 
So let’s get this straight - if your in low income you can get a £200 loan plus £150 of your council tax

so help for the poor
The rich won’t be bothered

what about the working man? I’ve worked hard to get my house, and with four kids sometimes things are tough. There is no way I can sustain a £100 per month rise
 
Jb85 said:
There is no way I can sustain a £100 per month rise
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Not sure what I've missed here, but what is it you are expecting a £100 per month + rise in? The average expected rise in energy costs is around half that, I appreciate you have a bigger family but surely you are not doing to hit twice the average?


But yes, those in the middle ground always seem to get shafted.
 
Jb85 said:
we’re council tax band E….. :-(
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According to Crispin Blunt on QT, it's bands A to E that get it

It's the interest rate rise as well I'm worried about. They're going up to control inflation but it seems like too little too late. We'll still see inflation of 7% this year either way
 
pluk said:
Not sure what I've missed here, but what is it you are expecting a £100 per month + rise in? The average expected rise in energy costs is around half that, I appreciate you have a bigger family but surely you are not doing to hit twice the average?


But yes, those in the middle ground always seem to get shafted.
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My total energy costs will have gone up by over £110 a month by Easter, simply increases in fuel for my car, and gas and electric.
 
WillPS said:
There probably are a small number of headteachers on £150k+, but to suggest that the additional rate of taxation is a burden carried by headteachers, doctors and sales people is disingenuous in the extreme.
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I was actually talking about the above 100k bracket that had been discussed previously.
Even now once you start earning over 100k you start to loose your personal tax allowance, once 125k is achieved it’s all gone, then at 150k the 45% tax comes in so above £100k you start paying more, quite a lot more.

You might agree with this but at the same time a company director is earning the same amount but paying around 20% on everything, that isn’t right or fair.

The whole income tax system needs a complete rethink, some out of the box thinking.
The fairest way is to actually work out a percentage that everyone pays regardless of what the salary is, somewhere around 30% on everything you earn regardless of how you earn it.
Abolish NI and personal tax relief as they are so too costly to implement, no tax codes nothing just every time money hits your bank account automatically deduct the “30%”.
There would have to be safe guards put in place of course to stop cash payments but we are moving to an almost cashless system anyway soon.
 
Just no.
Income tax needs to be progressive and proportionate...those that can afford to should pay more.
As a proportion of disposable income, a fixed single rate is great for the fat rich, but lousy for the lean poor.
Progressive rates of income tax up to 70% for those on more than half a million a year.
Stop all company directors fiddles.
 
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