Only 1 in 5 clear what ‘levelling up’ means. Do you know? If so what do you think it means

To be honest, the focus on individual taxation is avoiding the issue of "levelling up". The Conservatives' promise to the so-called "red wall" constituencies is that they will be levelled up. What that should mean (and what I think some people think they're being promised) is that there will be similar opportunities in "run down" areas as there are in more affluent areas. That will involve massive support for education, the health service and incentives to encourage businesses to invest. It's not just about big vanity infrastructure projects.

To save me looking through all the tables, which one are you looking at Katie59?

Katie59 Traveling between home and work has been allowed disallowed for many, many years in any claim for travel expenses. My point was that the company pays for the car. The employee just gets taxed on the benefit.

Now I have been guided to the correct table the lowest group do pay more tax than the highest by 5%.

Probably more interesting is the comparison with the second lowest which is 12% less a big difference.

growstuff

People on very low incomes pay a higher percentage of their income on council tax and National Insurance for a start. Both are capped for higher earners. They also pay VAT on fuel bills, which are essential. Higher earners probably have higher bills because they live in bigger houses, but they still pay the same rate. Their overall bill is unlikely to be in direct proportion to their oncome.

I don't think we have anything to prove now, do we, growstuff? There it is in black and white in the ONS statistics. (Which I've even provided a link to, so anyone can check it) On all measures the lowest 20% pays the highest percentage of their income on taxation of one sort or another. The highest quintile isn't always the lowest, but it certainly isn't hard done by...

I'm not altogether sure why Katie59 is still arguing the toss.

People on very low incomes pay a higher percentage of their income on council tax and National Insurance for a start. Both are capped for higher earners. They also pay VAT on fuel bills, which are essential. Higher earners probably have higher bills because they live in bigger houses, but they still pay the same rate. Their overall bill is unlikely to be in direct proportion to their oncome.

JaneJudge

My husband has a high end new car and pays less tax than I do on my 15 year old diesel

Similar situation. I wonder if the lower tax on new cars will change once we’ve all been persuaded to use electric.

PippaZ

My goodness, Katie59. A lot of stereotyping going on in your post.

Are you assuming I was stereo typing Alcohol etc, I wasn’t I simply hadn’t considered it.

In proportion the difference according to ONS is 5% of income in the case of low incomes that is £700 a year, that is a large quantity of Alcohol, Tobacco and Gambling that would pay £700 in taxes

I’m sure some do, most would not, so I don’t think the taxes I missed accounts for the difference.

I did not consider Tobacco, Alchohol or Gambling Taxes maybe that is very high for the low earners

Eh? Why on earth should it be?

My income is in the bottom decile and I don't pay tobacco, alcohol or gambling taxes. I can't afford any of them.

OK, Katie59.

ONS tables for financial year ended 2020

Table 8: Taxes as a percentage of gross income, disposable income and expenditure for ALL individuals by quintile groups, 2019/20

All taxes as a %age of gross income:

First quintile (i.e bottom 20%): 42.4%

Highest quintile : 37.5%

Indirect taxes* as %age of disposable income (i.e after Income taxes & NI)

Lowest quintile: 30.4%
Highest quintile: 16.2%

16.2% !!! What were you trying to persuade me of? The poor darlings pay so much more in VAT

*Indirect taxes listed (by the ONS) as:

VAT
Duty on alcohol
Duty on tobacco
Duty on hydrocarbon oils and Vehicle Excise Duty
Other indirect taxes

(I copied and pasted this list directly from the ONS spreadsheet BTW)

www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/datasets/theeffectsoftaxesandbenefitsonhouseholdincomefinancialyearending2014

Are you now going to argue with the ONS?

Am I still talking rubbish?

My husband has a high end new car and pays less tax than I do on my 15 year old diesel

My goodness, Katie59. A lot of stereotyping going on in your post.

I did mention VAT was not included and a high earner would be paying a lot of VAT on luxury items and restaurant service.
They would have a luxury car as well as VAT, very high road fund taxes these days as well as fuel tax. The company car taxation rates are so high now that it’s not worth it for most, because you can’t claim for journeys between home and work.

Property Tax includes, Stamp duty, Insurance tax and Capital Gains Tax on second homes or other property owned.

I did not consider Tobacco, Alchohol or Gambling Taxes maybe that is very high for the low earners

I’m sorry I couldn’t show the ONS figures the file wouldn’t copy but the figures are clear that the top 10% do pay more tax in proportion.

Interesting that in the Equality Trust's report the 'taxes' taken into consideration are listed.

Start

By tax we mean all of the following types of tax:
• Income tax
• Tax on interest earned by savings/rental income/other income
• Capital gains tax
• Council tax
• Car/vehicle/road tax
• Inheritance tax
• Stamp duty
• Tax added to the cost of some goods, services, and transactions (i.e. VAT):
• National insurance
• Tax duty on fuel, beer, cider, wine, spirits, tobacco
• Betting & Gaming Duties
• Air Passenger Duty
• Insurance Premium Tax
• Landfill Tax
• Climate Change Levy
• Aggregates tax

End

Those who are higher earners and in employment receive other benefits such as health insurance. company car, possibly low interest loans and others. They will pay tax on the benefit but will not have paid for the car or the insurance premiums. Put simply, an employer pays £100 per month for medical insurance. The employee just pays the tax at their marginal rate.

A major expense that hits the lower paid more is travel to work. For someone traveling from say Basildon to Fenchurch Street would pay around £3000 for an annual season ticket regardless of whether they earn £30k or £60k.
Admittedly this has nothing to do with taxation but does show how those on lower earnings pay proportionately higher for travel than the higher paid.

Katie59

Spiteful. no there are a lot more aggressive references on Gransnet

According to the ONS reference tables in 2020

Households on average

Lowest 10% gross income £14,000, taxation £3,500 - 25%

Highest 10% gross income £188,000, taxation £62,000 - 30%

Figures include Council Tax and any benefits received but not VAT, or any other taxation, there is a lot of property taxation that a high earner might pay as well as inheritance tax.

I think it is fair that high earners should pay more and that is in fact the case

You are struggling.

ONS figures don't include some of the most relevant taxes, such as VAT. They say so themselves. Incomplete figures give an incomplete picture.

Did you even read the report?

I'm glad that we agree that there is no problem with the wealthy paying more in amount of money paid.

But I think that you're making up a lot of your argument.

What are these 'property taxes' that you're talking about and seem to think are a clincher?

[Thu 12-Aug-21 18:40:29]

GillT57, in Norway everyone's tax return is available.

Spiteful. no there are a lot more aggressive references on Gransnet

That's okay then. We are now all clear that you will attack the poster not the argument. Is this because you don't feel you have an argument?

Spiteful. no there are a lot more aggressive references on Gransnet

According to the ONS reference tables in 2020

Households on average

Lowest 10% gross income £14,000, taxation £3,500 - 25%

Highest 10% gross income £188,000, taxation £62,000 - 30%

Figures include Council Tax and any benefits received but not VAT, or any other taxation, there is a lot of property taxation that a high earner might pay as well as inheritance tax.

I think it is fair that high earners should pay more and that is in fact the case

Katie59

“ They still pay less tax as a percentage of their income than do people who are on much lower incomes and only pay PAYE, NI and VAT. “

This is of course rubbish those earning over £100k are liable to income tax at 45% and they loose their personal allowance. As well as all the other taxes they pay, because they spend more they pay a hell of a lot more VAT than a low earner.

Debate the fairness of the system but don’t talk rubbish, or is it just the politics of envy!.

In 2014 the Equality Trust published a report on taxation. These are two of their findings:

The poorest 10 per cent of households pay 8 percentage points more (or about 23% more) of their income in all taxes than the richest 10 per cent - 43% compared to 35%

But the public is unaware of this according to new Ipsos Mori polling. Nearly 70% (68%) think the richest 10 per cent pay more. Not a single respondent knew how much the richest and poorest paid in tax. On average the public under-estimates what the poorest 10 per cent pays in tax by 19 percentage points, believing they pay just 24% of their income in taxes.

I am not talking rubbish at all. Nor am I interested in the politics of envy. Those are just spiteful accusations which have no place in debate.

What you have failed to take into account is that we are not just talking about income tax. We are talking about all forms of taxation. The fact that income from dividends is taxed at a lower rate than income from wages/salaries has already been mentioned. Council tax takes a far higher proportion of a poor person's income than it does of a wealthy persons because it is capped at a certain rate. Poor people spend more of their income and save very little, if any. So they pay a high proportion of their income in VAT, whereas wealthy people save more and spend less in proportion.

Anyway, it's in this report. It is 7 years old but nothing has happened to change it.

web.archive.org/web/20140616122112/http://www.equalitytrust.org.uk/sites/default/files/attachments/resources/Unfair%20and%20Unclear.pdf

Doodledog- yes.

It's a bit of a separate issue, but I do think that MPs should have to publish tax returns as well as all accounts of their income, including gifts of any kind.

Dinahmo

Katie59 your comment about taxing the masses would be all very well except for many of the rich don't tax on all their income because much of it is held in tax havens. Eg Rees Mogg

That's the other thing that needs to be sorted. If you live in the uk and work in the uk you should pay tax in the uk. People like JRM who are in government should be ashamed of themselves. Why would anyone elect a person to represent them in parliament when said person isn't paying his fair share? Maybe we need all MPs to publish their tax returns.

Katie59 your comment about taxing the masses would be all very well except for many of the rich don't tax on all their income because much of it is held in tax havens. Eg Rees Mogg

Katie59

“ They still pay less tax as a percentage of their income than do people who are on much lower incomes and only pay PAYE, NI and VAT. “

This is of course rubbish those earning over £100k are liable to income tax at 45% and they loose their personal allowance. As well as all the other taxes they pay, because they spend more they pay a hell of a lot more VAT than a low earner.

Debate the fairness of the system but don’t talk rubbish, or is it just the politics of envy!.

The PA is reduced gradually once income reaches 100k. When someone's income exceeds £125,140 they don't receive any PA.

Your figures relating to income tax rates aren't correct

It's 20% on income up to £37,500
It's 40% on income between £37501 and £150,000
£151,001 it's 45%

So for someone earning £150k (excluding any personal allowances their tax liability would be £52,500 which is 35% of their income.