Universal basic income

The amount of the State Pension has increased Chakotay's income and it's clear that she was already using her personal allowance, so the whole of that increase will be taxed. What I don't understand is what exactly is wrong about that?

Well, I was rather wondering if that had been the case and, like you, I couldn't understand what was the problem.

I thought that if UBI was introduced it would be taxed -possibly at a higher rate.
Single people who lose their jobs are entitled to £73 a week benefit - nothing else at all. That is a disgraceful amount particularly for people who have claimed nothing all their working life.
The benefits system certainly needs to be looked at to be fairer.

MaizieD

Chakotay

MaizieD

the tax I DO pay now is twice the amount of tax and NI combined taken from my wages when I was working age,

Why is it more? Because your income is more?

And part of that income is my state pension, if I was working age and my state pension was UC or tax credits then I wouldn't pay so much tax and those are tax free and I REPEAT there is no way I am going to pay an extra 12% on top of that to incorporate NI, and as due to the new flat rate rules I paid NI from between April 2016 and April 2021 without a penny going towards my pension I am not about to start paying it now not unless my pension increases in pro

Nope. I still don't understand why you're paying more tax, unless you are receiving more income.

The amount of the State Pension has increased Chakotay's income and it's clear that she was already using her personal allowance, so the whole of that increase will be taxed. What I don't understand is what exactly is wrong about that?

Chakotay

MaizieD

the tax I DO pay now is twice the amount of tax and NI combined taken from my wages when I was working age,

Why is it more? Because your income is more?

And part of that income is my state pension, if I was working age and my state pension was UC or tax credits then I wouldn't pay so much tax and those are tax free and I REPEAT there is no way I am going to pay an extra 12% on top of that to incorporate NI, and as due to the new flat rate rules I paid NI from between April 2016 and April 2021 without a penny going towards my pension I am not about to start paying it now not unless my pension increases in pro

Nope. I still don't understand why you're paying more tax, unless you are receiving more income.

You seem to be confused about the State Pension. If the benefit you get from that was the benefit you got from a private pension you would be paying tax. Why should this be different?

Perhaps you need to decide whether you want the State Pension to be treated as a social security payment - in which case you might not be eligible or earned income in which case it is taxable. If you want it to be a social security payment you will have to campaign for that.

MaizieD

^the tax I DO pay now is twice the amount of tax and NI combined taken from my wages when I was working age,^

Why is it more? Because your income is more?

And part of that income is my state pension, if I was working age and my state pension was UC or tax credits then I wouldn't pay so much tax and those are tax free and I REPEAT there is no way I am going to pay an extra 12% on top of that to incorporate NI, and as due to the new flat rate rules I paid NI from between April 2016 and April 2021 without a penny going towards my pension I am not about to start paying it now not unless my pension increases in pro

That makes so much sense growstuff.

growstuff

Neither did I, but both my children did and I read the textbooks. The problem is that demand for housing is a basic need, whereas the supply of housing is on the whole left to markets. The only way for balance and supply to be aligned is for the state to intervene in supply.

It doesn't help that there is an over all shortage of housing.

I agree with you], growstuff, it can't be left to 'the market' because the market is looking for profit, not to cater for social need.

Neither did I, but both my children did and I read the textbooks. The problem is that demand for housing is a basic need, whereas the supply of housing is on the whole left to markets. The only way for balance and supply to be aligned is for the state to intervene in supply.

Well I'll bow out then, as I didn't take Economics at A level?

It wouldn't work, unless there were a spectacular crash in property prices. An average modest home now costs, on average, ten times the average wage. There would still be people who won't ever be able to afford a mortgage because their income is too low.

The supply of rental homes needs to be maintained and that won't happen if landlords sell up. It doesn't matter if rents are capped, if there just aren't enough properties available for rent.

This is all standard A level Economics stuff. Housing left to a pure market economy just doesn't work to satisfy the need.

growstuff

Doodledog

PippaZ

My thinking about rents and caps is that if landlords are not making a fortune from renters they will sell the houses, thus increasing the number for sale, and therefore the prices that everyone (but particularly young people) will have to pay.

I suppose it comes back to whether you see a house as a home or an asset - or rather whether the government does. It's both when you own one but after that, it is only an asset. No one can live in two homes at the same time although you would always have to allow for changes of circumstance.

My post was meant to read 'therefore the prices . . . . .*would fall*'

I agree with your post, and think that landlords buying up houses and renting them at a profit is at least partly responsible for the housing shortage, and definitely responsible for the fact that however hard they work a lot of young people will never be able to buy a house of their own, never mind more than one.

But more houses for sale wouldn't result in lower rents. If anything, it would lead to higher rents because there would be a shortage of rental properties. The only solution is council-owned properties.

PS. It isn't just young people who can't afford mortgages. There are many people, like me, who "fell off" the property ladder (through divorce, illness, etc.) and can't get back on.

Sorry for nested quotes, but this conversation goes back a while, so have done it for context.

My point is that if there were rent caps there would be less incentive for landlords to buy up houses, so they would sell up. This would mean that as well as lower (capped) rents for those who want or need to rent, there would be lower house prices for those who want to, and are able to buy. All of that applies to people of any age, although it tends to be younger people who struggle to buy their first house because of the need for large deposits as a result of high prices.

And yes, I think there should be more council houses, but would only support that way forward if they were guaranteed to be excluded from 'right to buy' schemes, and there was an overhaul of the allocation system.

the tax I DO pay now is twice the amount of tax and NI combined taken from my wages when I was working age,

Why is it more? Because your income is more?

growstuff

BTW The people who moan most about rolling tax and NI into one are pensioners because they don't have to pay NI, which is currently in effect a 12% tax in addition to income tax.

AND????? I am a working pensioner yes I don't pay NI however the tax I DO pay now is twice the amount of tax and NI combined taken from my wages when I was working age, I have no objection of course to paying tax on my private pension as I had tax relief when I paid into it, however my state pension is also taxed, so yes I will object very strongly to having to pay an extra 12% tax on top of what I am already paying and I make no apology for saying that

growstuff

Pippa Where have I "blamed" any group?

Sorry growstuff perhaps "spotlighting" would have been better than "blamed". It was re ... The people who moan most about rolling tax and NI into one are pensioners ...

I think I have "whole-groupitus"

People will continue to buy BTL properties as long as rentals give a higher return on investments than most other sources.

Doodledog

PippaZ

My thinking about rents and caps is that if landlords are not making a fortune from renters they will sell the houses, thus increasing the number for sale, and therefore the prices that everyone (but particularly young people) will have to pay.

I suppose it comes back to whether you see a house as a home or an asset - or rather whether the government does. It's both when you own one but after that, it is only an asset. No one can live in two homes at the same time although you would always have to allow for changes of circumstance.

My post was meant to read 'therefore the prices . . . . .*would fall*'

I agree with your post, and think that landlords buying up houses and renting them at a profit is at least partly responsible for the housing shortage, and definitely responsible for the fact that however hard they work a lot of young people will never be able to buy a house of their own, never mind more than one.

But more houses for sale wouldn't result in lower rents. If anything, it would lead to higher rents because there would be a shortage of rental properties. The only solution is council-owned properties.

PS. It isn't just young people who can't afford mortgages. There are many people, like me, who "fell off" the property ladder (through divorce, illness, etc.) and can't get back on.

Pippa Where have I "blamed" any group?

PippaZ

^My thinking about rents and caps is that if landlords are not making a fortune from renters they will sell the houses, thus increasing the number for sale, and therefore the prices that everyone (but particularly young people) will have to pay.^

I suppose it comes back to whether you see a house as a home or an asset - or rather whether the government does. It's both when you own one but after that, it is only an asset. No one can live in two homes at the same time although you would always have to allow for changes of circumstance.

My post was meant to read 'therefore the prices . . . . .*would fall*'

I agree with your post, and think that landlords buying up houses and renting them at a profit is at least partly responsible for the housing shortage, and definitely responsible for the fact that however hard they work a lot of young people will never be able to buy a house of their own, never mind more than one.

My thinking about rents and caps is that if landlords are not making a fortune from renters they will sell the houses, thus increasing the number for sale, and therefore the prices that everyone (but particularly young people) will have to pay.

I suppose it comes back to whether you see a house as a home or an asset - or rather whether the government does. It's both when you own one but after that, it is only an asset. No one can live in two homes at the same time although you would always have to allow for changes of circumstance.

Growstuff, I really don't see the point in blaming any one group when this is only in the design stage in Wales as yet and doesn't seem to be even a twinkle in the government's eye. I am very taken by the idea of "the common good" and think this could be part of it. If it is rolled out people must be able to have knowledge not rumour - Citizen's Assemblies might help.

*And, before anyone starts complaining about something for nothing paid for by 'taxpayers', I'd just point out that even people who don't pay income tax are taxpayers; nearly everything we purchase has a tax element.

I could also point out that tax doesn't fund government spending... zzzzzz*
People might not get the nomenclature right, but the principle is that on the whole, people don't like to see others getting for free what they have had to work for, and I understand that way of thinking.

Also, it may well be the case that everyone pays purchase tax, but if someone hasn't earned the money from which it is paid, it is not quite the same as for someone who has earned, been taxed and is taxed again on purchases. It's not just about money, it's about contributing to society, but that's a whole different argument.

My thinking about rents and caps is that if landlords are not making a fortune from renters they will sell the houses, thus increasing the number for sale, and therefore the prices that everyone (but particularly young people) will have to pay.

It would possibly also even out the differentials between geographical areas. If renting in London cost the same as, say, Liverpool there would be more geographical mobility, and fewer 'hotspots' which price out anyone who has not (or whose parents have not) made a fortune by buying a discounted council house or being lucky enough to buy on the open market in an area where prices have rocketed.

As I'm sure is very clear, however, I am not an economist or an expert in housing or benefits. I am just offering my thoughts on what might make for a fairer society.

BTW The people who moan most about rolling tax and NI into one are pensioners because they don't have to pay NI, which is currently in effect a 12% tax in addition to income tax.

MaizieD

^In areas where rental prices are low, the rents would probably shoot up to the level set and areas where the rents are high would cause financial chaos for anybody who has bought properties with buy to let mortgages.^

So, in effect, you are saying that a number of landlords are grasping opportunists?

As far as I can see, rents tend to be based on what the market will bear. Is there a difference in landlord's costs which make them far higher in some areas? Or is it just scarcity that inflates rents?

(Sorry to deflect from UBI, which I think is a perfectly reasonable strategy)

Yes, there's a huge difference if landlords are buying with a mortgage.

Pippa The point I was making about working age benefits is that many of the problems associated with poverty could be solved by increasing the level of benefits for working people to something which is realistic. That, along with building more council housing (where rents can be controlled) and reforms to council tax would be more efficient in helping those who really need help then UBI.