Taxing the rich to pay for the poor

Unfortunately not all private pensions can be inherited. Some die with you. I have read that private pensions are likely to come under Labour’s microscope. Nothing new there, of course.

maddyone I’m not sure about who is rich but I believe it includes some singers, pop groups, novelists. There are people with vast inherited wealth whose families go back generations, land owners

Retired teachers, social workers, solicitors, journalists, doctors -not rich. They’ve worked hard throughout their lives. Not lived vastly beyond their means, managed to buy a house, paid lots into their pension pot. They’re ‘comfortable’ and usually count themselves as fortunate.
I’d happily tax Elon Musk till his pips squeak. Why these mega rich people (yes you Mick Jagger) don’t contribute some of their vast wealth to Good Causes is a mystery

A lot of them do donate Iam64 they just do it quietly, sometimes it comes out after their death.

Germanshepherdsmum

I remember MIRAS and, like all homeowners I have benefited from house price inflation, though when buying another house of course I had to pay the inflated price, and I expect we will move yet again. I was not a partner in a firm which managed its cash flow and partner profit shares in the way you describe, though.

This firm was one with over 100 partners many years ago

Wealthy is anyone who benefits from the arrangements as most people won't. eg X's house is worth £3million as a conservative estimate, she's given it to her grandchildren and then she is paying a market rent to enable her to continue living in it tbh I don't know exactly how much, lets say £50K p.a. She can absolutely afford to do this without comprising her ability to pay for care should it be necessary but in the unlikely event that she starts to run short of cash, she will just buy a cheaper house say £1million and move out The money all goes into a trust as the GKs are still quite young. As things stand ATM she's saving £800k IHT on the house, divesting herself of money that if she dies will be taxed at 40% and potentially she'll be able to rid herself of another million in the future which she'll be able to pass on without IHT. fwiw the London flat got sold when her own kids bought houses previously they had lived there rent free and the family house got sold when she decided to live in the holiday home, money got passed on to her children and is now free of IHT. She's not a billionaire, just wealthy and there's lots like her (met a few!) If we need to raise more money then these are the ones to target and we need to do it by looking at IHT and the ways people pass on wealth before they die (quite legitimately). fwiw I am not the slightest bit jealous of her money, i have more than enough for my needs but these arrangements fuel the disparity between those who have and those who don't, added to that her lovely grandchildren have the best education, fantastic holidays, lovely family and are more than capable of making their way in life without big trust funds etc.

Labour have said they will not tax working people more but it seems they are going to tax pensions. They are keeping very quiet about it of course!

Do you mean tax the money that is paid into pension funds?

Jaxjacky

A lot of them do donate Iam64 they just do it quietly, sometimes it comes out after their death.

Didn't Muk fight his wife in the divorce court over her financial settlement because she wanted to donate a large su to charity.

He was on the news yesterday, dancing around because his pay package will total $55.8 billion?
But is that taxable here?

Sorry, should have quoted this from Iam64
I’d happily tax Elon Musk till his pips squeak. Why these mega rich people (yes you Mick Jagger) don’t contribute some of their vast wealth to Good Causes is a mystery

Poor old Mick Jagger . He’s always being quoted as an ‘unneedy’ pensioner, but I can’t imagine him thinking he’d love to see more of Keith, if only he could get his hands on a bus pass. The chances of his claiming free prescriptions or going for an OAP special in the caff are vanishingly slim. By all means tax him, but he’s very much a special case.

Doodledog
Mick Jagger……….going for a pensioner special in the caff
I’m sorry, I know it’s a serious subject, but that really made me laugh.

Germanshepherdmum. My figure of 20% was for illustrative purposes only. Though do you really think that having marginal rates of tax at 72% is a good incentive to work hard. Or for two earners on £ 40000 each to be better off that 1 earner on £80000 with a stay at home wife looking after the children. Our tax system is totally unjust and sometimes borders on the bizarre. It’s time we had a simple system and doing away with divisive tax rates would be a start. I’m not an economist but some of them say really interesting things.

Well, the rich got rich by exploiting the poor so yeah, fairdo's

Aveline

Rich people are people who have more money than oneself! Hence everyone's happy to hear that rich people will be taxed as they don't think it applies to them!

Exactly.

Iam64

maddyone I’m not sure about who is rich but I believe it includes some singers, pop groups, novelists. There are people with vast inherited wealth whose families go back generations, land owners

Retired teachers, social workers, solicitors, journalists, doctors -not rich. They’ve worked hard throughout their lives. Not lived vastly beyond their means, managed to buy a house, paid lots into their pension pot. They’re ‘comfortable’ and usually count themselves as fortunate.
I’d happily tax Elon Musk till his pips squeak. Why these mega rich people (yes you Mick Jagger) don’t contribute some of their vast wealth to Good Causes is a mystery

Thank you Iam64. Thank you for trying to explain who the rich are. I actually know who the rich are of course, they are people such as you mention, and like the lady/family foxie mentions, but the term the rich is bandied about so much, that I wondered who GNetters actually think the rich are. The problem as I see it is that if taxes are to rise (and it’s said that whatever either party are saying now, that whoever wins power, taxes will have to rise) then it’s fine and dandy to tax the super rich more, but the actual truth is that in order to actually bring in enough in raised taxes, then ordinary people, such as you mention, will be the the payers of the raised taxes. It won’t be the super rich, because they can move their money, and even if they don’t move it, there simply aren’t enough of them. So it comes back to the question asked on another thread, are you willing to pay more tax? Actually it doesn’t matter if you’re willing because you will be paying more tax, whichever party takes power.
If we had (fantastically) improved services I wouldn’t mind, but I’m not sure that will happen.

I hope I have enough money to pay for surgery if I ever need it. Does this mean I’m rich?

A lady was on the News the other night, been waiting over 2 years for a knee op, struggling on with crutches and in pain.

I thought, well, if that were DH or me, I would be paying, that’s another reason why you need some savings behind you nowadays.

I noticed Keir Starmer said the other night he wouldn’t pay for private treatment.

Bet he would if it were his knees.

GrannyRose15

Germanshepherdmum. My figure of 20% was for illustrative purposes only. Though do you really think that having marginal rates of tax at 72% is a good incentive to work hard. Or for two earners on £ 40000 each to be better off that 1 earner on £80000 with a stay at home wife looking after the children. Our tax system is totally unjust and sometimes borders on the bizarre. It’s time we had a simple system and doing away with divisive tax rates would be a start. I’m not an economist but some of them say really interesting things.

Wherever did you get 72% from?!

The current tax bands are not unjust, and I say that as someone who paid additional rate tax. You earn more money, you pay a higher rate of tax.

Btw your hypothetical could earning £40k each will both pay 20% tax. The person earning £80k will pay 40%, ie 20%x2. They will however pay different rates of NI, which as you know the Conservatives want to phase out.

Calendargirl

I hope I have enough money to pay for surgery if I ever need it. Does this mean I’m rich?

A lady was on the News the other night, been waiting over 2 years for a knee op, struggling on with crutches and in pain.

I thought, well, if that were DH or me, I would be paying, that’s another reason why you need some savings behind you nowadays.

I noticed Keir Starmer said the other night he wouldn’t pay for private treatment.

Bet he would if it were his knees.

I bet he would too. I don’t believe that statement.

maddyone

Doodledog
Mick Jagger……….going for a pensioner special in the caff
I’m sorry, I know it’s a serious subject, but that really made me laugh.

Well, I wasn’t being entirely serious , but people get so hung up on the thought that there will be those (like Mick) who might get something they ‘don’t need’ or won’t have to pay for something they ‘can afford’. It’s ridiculous.

Of course we all see things in terms of what we (as individuals) do, and what is important to us- that’s perfectly natural,

But many people seem to lose sight of the fact that those who have different incomes (or spending power) also have very different lives. People get hung up on protecting their own access to ‘perks’ and often see the best way of doing that as denying them to others, without realising that some of them aren’t universally important.

Similarly there are those who revel in their ability to ‘rise above’ needing concessions and love pointing out that they would happily ‘go without’ so that other ‘more deserving’ sorts can have them, and they don’t see the parallels.

Really wealthy people don’t virtue-signal about their willingness to forego free prescriptions - the idea of queuing in Boots for haemorrhoid cream is as alien to them as getting a discount on mince and potatoes with a free ginger sponge would be to MJ. The government is happy to encourage people to feel superior by refusing their rights though - the upshot of that is obviously that those whose lives are enriched by accepting little bits of help will feel bad and it will be easier to cut them.

Mick isn’t ’going without’ his bus pass - he’s highly unlikely to want one . Tinkering with who is ‘entitled’ to things they have paid for in taxes anyway rarely makes a difference. It just distracts from real inequalities and allows genuine inequality to flourish.

I’m pleased you were amused though - everything is so relentlessly gloomy just now. We need a bit of light relief.

Excellent post Doodledog!

Just to clarify, the top rate of income tax is 45% which kicks in at £125,140pa, however once you earn over £100,000 you start to lose the personal allowance of £12,750 on a sliding scale basis (£1 for every £2), losing it completely by the time you earn £125,140. Any interest earnings are also part of the calculation but not ISAs as they are tax free. This effectively means you are paying a much higher rate of tax of over 60% on some of your earnings. It is quite complex. Owners of successful businesses or directors can choose to take dividends rather than a salary which will usually reduce their tax burden considerably, if you are on PAYE you can obviously choose to put up to £40K into your pension pot so avoid tax altogether. I'm not a tax expert or an accountant, so apologies if I have got anything wrong, please correct me. Putting money into a pension is not tax avoidance btw as it is government approved, just like ISAs.

You are currently able to draw 25% lump sum of your pension pot tax free, the rest will be taxed at the going rate according to your income.

Dividends are subject to tax once they are over the personal allowance, not liable for NI though.

I can't comment on the pension complications (other than to say that I think it should be the same rules for all, or if not that people on lower incomes should get more incentives than those on higher ones), but I agree that the additional tax rate is badly thought through.

Yes, people on higher incomes should pay more tax, but disincentives to earn more by means-testing in this way are divisive and unfair, whether at the bottom of the scale or the top. Just as people working full-time should take home much more than those who work part-time and get top-ups, those who earn over £100k should take home more than those on £99k and there shouldn't be a gap of £25k before they see a return on their efforts.

GG13 much lower rates aren't they?

Given the increasing number of older people in the population needing more health care I think at some point its inevitable that we'll have to raise more taxes in the future to some extent.