UK Politics General Discussion

[Bert2theSpark]

You can't keep hammering the rich - it's a fine balancing act, and increasing taxation leads to increases in tax avoidance. Remember that these are generally the wealth creators (jobs, indirect taxes from property, business, employee tax, etc).

We live in a global environment - just remember if you can "work from home" you can work anywhere on the planet. Tax 45% on income and people will suck it up. Tax 65% and people will move to somewhere it's 25%.

Someone has swallowed the neoliberal pill, trickle-down economics is just as mythical as a unicorn. Tax rates need to rise for everyone across society, personally I'm willing to see my own tax rates rise 10-15% to get a public sector that actually works and delivers. If I'm going to have to pay tax all my life, I want my taxes to be spent efficiently now, which would mean more taxation, especially if we're heading towards higher taxation with the cost of services rising regardless of the outcomes that weget out of the system.

I don't want to live in a society where all of my taxation is upkeeping dysfunctional services that just keep things ticking over. I want the priority to be investing in public transport improvements, preventative healthcare investment, community services and green energy investment will decrease my bills and improve my lifestyle holistically over the long-term.

 

[Mick]

Any time that you cut a group’s benefits or raise their taxes it’s going to create negative press - we’ve seen it with the private schools VAT, we’ve seen it with the business NI increase, with the winter fuel allowance and now with the welfare payments.

Up to recently I’ve been relatively comfortable with the economic decisions being taken, felt like they’re not ideal but the pain of the current economic situation was being shared around.

But something about these welfare cuts, in addition to the rumoured upcoming Spring statement containing huge public spending cuts has me very concerned about the decisions being taken by the government, and more importantly whether they still actually have a direction and a vision.

 

[Smiley]

How much more would you like to tax people?? Isn't 47% enough (62% from £100k-£125k)?? Not content with that, tax them on their company car, on their pension, on their private school fees and private health (both of which reduces the burden on the state). 20% on everything they spend. Plus 40% on what's left when they die.

Most of what I leave my kids will have been taxed at 70% - what I spend taxed at 56%+. There comes a point when work doesn't pay - better to move to Bermuda (or other tax haven) and work 6 months of the year.

 

[Matt N]

I apologise if my earlier comments caused any offence. I did not say what I said with any ill will or malice intended, but I admit that I lack first hand knowledge of the welfare system and acknowledge how this may influence my view.

Ultimately, I think the problem is that the politicians in this country are in a situation of having to convince us that we can have both low taxes and world-class public services, and that ultimately isn’t true. At some point, a politician needs to open an honest conversation with the public about this and make the electorate choose, as it’s becoming increasingly clear that we can’t have both.

If we want low taxes, we have to accept a weaker welfare state. You can’t fund a full welfare state on peanuts, so if taxes are lowered, we would have to accept sweeping public service cuts, and at its extreme, I dare say this approach would potentially have to lead to the likes of the NHS being privatised.

If we want a stronger welfare state, we have to accept higher taxes. Personal income taxes would likely have to rise at all tiers, and higher earners would likely be taxed an awful lot more highly.

At some point, the fallacy that we can have both needs to end, and I think we can all agree on that regardless of what side of the political fence you fall on.

Given that lower taxes has been tried for decades and evidently isn’t working, my preference would be stronger public services. I’ll admit that I don’t think either approach would work if taken to its absolute extreme, but in the likely moderate scale it would be implemented at here, my view is that there’s much more room for redistribution and a more egalitarian tax system than there is for public service cuts at present.

 

[Smiley]

Not a big vote winner though.... The problem with just hammering the wealthy is that they are the most socially mobile. You only have to look at the LSE vs NASDAQ to see how taxation is starving the UK of investment - the global economy of manufacturing has been around for decades. Now it's moving to the intellectual economy.

What's needed is a productive society. You can't get there with the "few" holding up the masses. The world has become too small for that to be successful.

 

[Matt N]

Not a big vote winner though.... The problem with just hammering the wealthy is that they are the most socially mobile. You only have to look at the LSE vs NASDAQ to see how taxation is starving the UK of investment - the global economy of manufacturing has been around for decades. Now it's moving to the intellectual economy.

What's needed is a productive society. You can't get there with the "few" holding up the masses. The world has become too small for that to be successful.

The problem there, though, is that the UK has lower taxes than many countries in Europe. Income and corporation taxes are often higher on the mainland, yet those countries still manage to attract investment. Germany, for instance, has a successful financial services sector and lots of engineering companies, yet has higher taxes than we do. To offer another example, our top tax rate is 45%, while France's is 55.4% and they aren't exactly a poor country; France still has lots of thriving big business.

Even with British taxes currently at their highest in 70 years, many European countries pay more taxes than we do while still having thriving economies and businesses.

I agree that taxing the rich ad infinitum wouldn't necessarily work and there is eventually an inflection point where the drawbacks outweigh the benefits. But I feel that Britain is pretty far from that inflection point, realistically, and that there's plenty of room for redistribution in the UK tax system at present.

Our choice is between tax rises and spending cuts, and given that spending cuts has been the status quo of at least the last 15 years and appears to have left us high and dry, I feel that tax rises are the lesser of two evils and far more worth trying, on balance.

 

[Quantum]

The problem with any tax is that there is so little trust the government will spend it well or people will visibly see the benefits of it.

I'm paying more taxes than ever but things seem to be getting worse year on year. More litter everywhere, hollowed out town centres, higher crime rates and more and more homeless on the streets.

 

[Smiley]

The problem there, though, is that the UK has lower taxes than many countries in Europe.

Europe isn't the world! And tax isn't a simple headline rate. It is maybe for an individual (probably not for a HNWI) and definitely not for a company. Take your board meetings in Bermuda and before you know it - reduced taxes! I'd suggest most people thinking tax rises on the rich are a good thing... Well probably they don't pay a lot of tax.

Without trying to sounds contrite, the wealth creators (and largest tax payers) can easily afford to pay their way out of excessive taxation. Don't double dare them to do it!

 

[Benzin]

If most of the wealthy actually paid their taxes rather than do some economic nonsense of being technically based in a tax haven.

Horde the wealth, make sure the shareholders get paid at an ever increasing profit margin by any means necessary. And yet the only way forward is to make sure benefits and services aiming to help people get cut down?

Those yelling loudest about fuel payments and private school VAT aren't doing the same for the upcoming disabled changes. Presumably because it doesn't affect them and years of media attacks on the small minority of claimants cheating the system but generalising every disabled person whilst at it.

The last changes to Universal Credit hurt a lot of people. There's potential for more of the same here. And the last thing many on benefits need is more anxiety and fear about losing their only income, then being forced into work where many places just do not provide the right adjustments or allowances for those who need it.

 

[rob666]

How much more would you like to tax people?? Isn't 47% enough (62% from £100k-£125k)?? Not content with that, tax them on their company car, on their pension, on their private school fees and private health (both of which reduces the burden on the state). 20% on everything they spend. Plus 40% on what's left when they die.

Most of what I leave my kids will have been taxed at 70% - what I spend taxed at 56%+. There comes a point when work doesn't pay - better to move to Bermuda (or other tax haven) and work 6 months of the year.

No, for high earners, 47% is nowhere near enough.
In my humble opinion, with the gross "Gross" income of some industrialists and media giants, the top rate should be 95%.

Off you go to Bermuda, there are lots of wealthy people here with social responsibility for the less well off in this great nation of ours, who have stated openly and willingly that they should be paying more tax.

Tax those that can afford it, and help all unemployed into work with decent support.

Lets try and make our society a little more equal, not heighten divisions berween rich and poor, which is what has happened for the last forty years.

Private health and education only help the rich, don't kid yourself that they reduce the state burden.

And when we die, why should our unequal wealth be passed on to the next generation of silver spooners, didn't do us much good with Donald and Elon getting the family money did it, inheritance equals continued inequality in many peoples eyes.

 

[Matt N]

Interestingly, the Centre for Social Justice (CSJ), a key think tank, actually seems to have approved of Labour’s benefit cuts, saying that “for too long, it’s been sickness that pays”: https://www.independent.co.uk/bulletin/news/welfare-cuts-pip-disability-csj-b2717991.html

However, they argue that the cuts “don’t go far enough to address the overmedicalisation of mental health issues”, with 84% of GPs apparently feeling that excessive medication is prescribed for mental health issues and that “everyday life challenges are now overly medicalised”.

I’ll admit to not knowing if the CSJ has any particular political leanings, but it is intriguing to hear a think tank come out in support of the measures when so many have been opposed (albeit far less than to the Winter Fuel Payment and private school VAT changes, interestingly).

 

[Dave]

Europe isn't the world! And tax isn't a simple headline rate. It is maybe for an individual (probably not for a HNWI) and definitely not for a company. Take your board meetings in Bermuda and before you know it - reduced taxes! I'd suggest most people thinking tax rises on the rich are a good thing... Well probably they don't pay a lot of tax.

Without trying to sounds contrite, the wealth creators (and largest tax payers) can easily afford to pay their way out of excessive taxation. Don't double dare them to do it!

Just some points to consider:

1) Germany has a higher tax rate than the UK with higher industrial investment.

2) The VAT on private schools has had zero impact on the number of private school users and no increase in request for state school placements.

3) In the last job figures the number of jobs increased despite the NI incoming.

In my opinion we should increase tax on the wealthy and have the US model whereby if you maintain your citizenship you must pay tax on your earnings no matter where you live. If you want to give up your citizenship then fine don’t pay tax here, but the UK passport has a lot of benefits and I suspect with that stick many would rather pay the tax.

It’s very sad to see people who are not millionaires swallow the propaganda these rich people spew out.

 

[Plastic Person]

I’ll admit to not knowing if the CSJ has any particular political leanings, but it is intriguing to hear a think tank come out in support of the measures

Literally 4 seconds of Googling to reveal perhaps the least intriguing information ever recorded:

"The Centre for Social Justice is an independent centre-right think tank based in the United Kingdom, co-founded in 2004 by Iain Duncan Smith, Tim Montgomerie, and Philippa Stroud."

In other news, the Ronald McDonald & Grimace Foundation for Culinary Development has just published their most recent studies, concluding that burgers and nuggets are, in fact, delicious.

@Matt N to echo the wisdom of a person pretending to be a goose on a discussion forum, your instincts are often bang-on, but you need to check your sources. There exists a cottage industry of 'think thanks' who would legitimise charging fifty pence to use your home toilet if you gave them an inch.

 

[GooseOnTheLoose]

You can't keep hammering the rich

They've yet to be hammered.

Interestingly, the Centre for Social Justice (CSJ), a key think tank, actually seems to have approved of Labour’s benefit cuts, saying that “for too long, it’s been sickness that pays”: https://www.independent.co.uk/bulletin/news/welfare-cuts-pip-disability-csj-b2717991.html

However, they argue that the cuts “don’t go far enough to address the overmedicalisation of mental health issues”, with 84% of GPs apparently feeling that excessive medication is prescribed for mental health issues and that “everyday life challenges are now overly medicalised”.

I’ll admit to not knowing if the CSJ has any particular political leanings, but it is intriguing to hear a think tank come out in support of the measures when so many have been opposed (albeit far less than to the Winter Fuel Payment and private school VAT changes, interestingly).

The CSJ was considered to be the most effective think tank (let's be honest, private interest lobbying group) of the Cameron administration. Its previous members include Ian Duncan Smith and William Hague. The CSJ was also instrumental in the creation of Universal Credit in the first instance.

When looking into policy announcements, always be cautious of the think tanks blowing the trumpets. They're professional cheerleaders for their donors' interests.

Edit: @Plastic Person beat me to it.

 

[Smiley]

I wonder how many people commenting have a personal tax bill in 6 or 7 figures each year??

Come back when you think you don't pay enough tax...

"We can't tax and spend our way to higher living standards and better public services. That's not available in the world we live in today"

Rachel from Accounts said this. Even she gets it!

 

[Plastic Person]

I wonder how many people commenting have a personal tax bill in 6 or 7 figures each year??

Come back when you think you don't pay enough tax...

I'm not going to be able to "come back" on that, because even working in the private sector, the chances of such a bill occurring in my lifetime are increasingly slim. It should be possible to live a satisfying personal or family life on even a median income, but the trickle has stopped flowing. Meanwhile, the lives of the 6 or 7-figure crowd continue to thrive while the rest of the country is hollowed out continually. People are forced to adopt the increasingly psychotic neoliberal mindset of a 'wealth driver', but without a sudden windfall or the connections of nepotism, the opportunities and equality just aren't there for the person on the street.

Of course, whenever anyone gets a whiff of how the system is stacked against them, the powers-that-be wheel out the immigrants or the supposed benefit-scroungers. I'm hardly a radical Marxist, but I observed and (un)learned this stuff in the red tops when I was about twelve, and I've had plenty of tax bills since, some fairly hefty. It's shocking to see how the same tricks are still utilized, and especially shocking when they're put into play by the supposed left.

 

[Dave]

I wonder how many people commenting have a personal tax bill in 6 or 7 figures each year??

Come back when you think you don't pay enough tax...

The bill is irrelevant (and before you spout I am in the 40% tax bracket). What is important is the percentage.

Saying someone is taxed 43% is a fallacy in this country, you don’t pay the upper tax band on the entire earnings and often higher earners are not on PAYE so can use tax breaks. It’s often the case that the poorest in our country pay a greater percentage of their wage in tax than the richest.

Classic example Rishi Sunak paid an effective tax rate of 23% on £2.2 million earnings, hardly 43%.

 

[Matt N]

The bill is irrelevant (and before you spout I am in the 40% tax bracket). What is important is the percentage.

Saying someone is taxed 43% is a fallacy in this country, you don’t pay the upper tax band on the entire earnings and often higher earners are not on PAYE so can use tax breaks. It’s often the case that the poorest in our country pay a greater percentage of their wage in tax than the richest.

Classic example Rishi Sunak paid an effective tax rate of 23% on £2.2 million earnings, hardly 43%.

It’s stuff like this that I find baffling about the UK tax system.

Instead of raising income tax or employer NI, why can’t we close the loopholes that cause things like this? Surely it isn’t fair that Rishi Sunak, to cite your example, pays a lower effective tax rate than a great many members of the public earning far less? Why on Earth are high earning individuals like him allowed to dodge the tax system?

I imagine closing these sorts of loopholes could raise a fair amount of money while not really squeezing the lower and middle classes and also not unduly affecting businesses. This is the sort of thing I think Labour should do more of if they want to redistribute.

 

[rob666]

...why can’t we close the loopholes that cause things like this? Surely it isn’t fair that Rishi Sunak, to cite your example, pays a lower effective tax rate than a great many members of the public earning far less?...

Perhaps because our great captains of industry have a strong influence in the corridors of power, and have very good well paid accountants.

 

[Benzin]

I wonder how many people commenting have a personal tax bill in 6 or 7 figures each year??

Come back when you think you don't pay enough tax...

Maybe the rich should tighten their belts then if it's too much? No second homes or holidays. It's like when MPs whine that £80k annual salary isn't enough. Even though half the stuff they do is subsided greatly at tax payers expense.

I'd love to have to pay that much in tax. Means I'm earning far more than currently (roughly 4 figure annual tax currently).