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

Before you increase tax bands by £5k you need a plan to replace that tax income, because millions would be paying no tax at all. Where is the extra tax coming from to pay for running the country

Those earning £300k would see very little benefit but remember they are less than 5% of the population, to collect a lot of tax you have to tax the masses, the rich are too few

GillT57 good post. The point about tax bands makes sense.
My FIL once told me I should be grateful I was earning enough to pay tax. He never said anything about paying twice over.

GillT57 I agree with your post.

I don't believe in punishing people for their good fortune in having a decent amount to leave their children. If we do so, we can be sure that those with eye watering amounts will be able to use investment and inheritance experts that the rest of us, in the middle do not have access to.

Two things strike me; personally I think it is shameful that 1% of the population pay a third of income tax, this is a strong indication of the inequalities in earnings.

Secondly, tax bands should be drastically raised to enable people to take home far more of their income, rather than having to top it up to a living wage through universal credit or help with housing costs. If someone earning £30k a year takes home an additional £5k, they will spend it on consumer items, thus aiding the economy, if someone earning £300K takes home an additional £5k they will save it, no benefit to anyone else at all. I know this is a simplistic way of looking at it.

“ 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!.

GrannyGravy13

growstuff if someone wants to leave their children/ grandchildren or Joe Bloggs down the road their £5 premium bond, a share in their home or £1million it should be down to them.

You seem to be totally missing the point that it is their money to spend as they so wish whilst alive and to gift to whom they so wish on their death. ^Their money not the States!!!!^

It is their money if a proper tax is paid during the person's lifetime - not otherwise.

If we continue to increase wealth by taxing some at a much lower percentage, on their income and assets, than those earning much lower incomes, there will be more calls for the sort of taxes we saw after the first World War.

MaizieD

^ Their money not the States!!!!^

Technically it is the State's money, because the State is the issuer of all our money. No-one else...

I earn, everybody should be in paid employment, those unable to work for health reasons whether it’s physical or mental should receive help from the State.

Everybody should be able to do with their money what they so wish.

To say it’s the States money is pedantic!

Do we believe that working to support ourselves is a good thing or do we think that we should aspire to a life of idleness enabled by inherited wealth?

I believe that we should support ourselves as far as possible, and that we should be treated as individuals when it comes to both tax and benefits. I think the way that both are dealt with as 'households' is iniquitous on a number of levels for the reasons I mentioned upthread.

I think that doing away with inheritance would benefit nobody in the long run, unless every other aspect of privilege were eradicated, which, as I've said, can't happen and if it could would result in some sort of Year Zero that would be awful for everyone

It is natural for people to want to provide for their children after they die, and I think that it is those with a little bit who lose the most, because of means testing, particularly of social care. I think it is very unjust that someone who lives in a 'cheaper' area of the country in a house she bought for £18,000 and at her death is worth £120,000 could easily end up leaving each of her 3 children very little after the £16,000 that she has been allowed to keep has had funeral expenses deducted and is split three ways.

Now take the example upthread of someone with a house worth £1.4 million, who bought hers for £18000. After her funeral costs, she has £450,000 to leave each child, and her care costs will only make a small dent in that. Let's say they cost £104k, the same as the other example. That still leaves over £400k for each child.

This is what I mean when I say that means testing benefits the rich, has no impact on the poor (if someone has never been able to buy a house and has no savings to leave behind they get free social care, so their family is no worse off than before).

There would have been a difference between the two example families' inheritance anyway, but means testing makes that difference so much greater. The gap between rich and poor will never get smaller if means testing takes a disproportionate amount of money from those at the bottom. It's not just social care that does this, but it's probably the most obviously unfair example, and it is so often the voices of those who stand to lose least that are heard proclaiming that those who 'can afford' to pay should do so - it has far less of an impact on them.

^ Their money not the States!!!!^

Technically it is the State's money, because the State is the issuer of all our money. No-one else...

The top 1% of earners account for more than a third of income tax collected according to the Institute of Fiscal Studies, added to which they have more purchasing power and therefore pay more VAT along with stamp duty every time they purchase property.

That ... is ... because ... they ... have ... more ... money.

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.

Is this fair on low earners?

And what about concentrating wealth in the hands of the already wealthy so lessening the 'pot' for everyone else? (for the third time of asking)

growstuff if someone wants to leave their children/ grandchildren or Joe Bloggs down the road their £5 premium bond, a share in their home or £1million it should be down to them.

You seem to be totally missing the point that it is their money to spend as they so wish whilst alive and to gift to whom they so wish on their death. Their money not the States!!!!

GrannyGravy13

growstuff

You're still missing my point GrannyGravy. My suggestion would include letting people hang on to to most of the money they earn during their life time, but it would be the money they have earned, not their ancestors. That's how a true meritocracy would work.

Just because I do not agree with your point do not insinuate that I ^am missing it^

But you must be missing it to reply as you have done. How does letting you keep more of the money you earn during your lifetime disincentivise anybody? On the contrary, it encourages you to buy things you want (thus creating jobs and opportunities for others) rather than forcing you to pay taxes to the government.

growstuff

You're still missing my point GrannyGravy. My suggestion would include letting people hang on to to most of the money they earn during their life time, but it would be the money they have earned, not their ancestors. That's how a true meritocracy would work.

Just because I do not agree with your point do not insinuate that I am missing it

PS. I find Conservative thinking distasteful. So what?

You're still missing my point GrannyGravy. My suggestion would include letting people hang on to to most of the money they earn during their life time, but it would be the money they have earned, not their ancestors. That's how a true meritocracy would work.

MaizieD inheritance, if is it a half, third or fifth share of ones family home when both parents have died, maybe anything from £50,000 to £250,000 maybe? Even the upper most amount wouldn’t buy you diddly squat in the South East.

I know many wealthy folks (some from wealthy families, some self made millionaires) they all work, pay all their taxes as do their offspring.

There seems to be an underlying anyone with money is awful and should not help their families contingent on GN political threads, which I personally find extremely distasteful.

The top 1% of earners account for more than a third of income tax collected according to the Institute of Fiscal Studies, added to which they have more purchasing power and therefore pay more VAT along with stamp duty every time they purchase property.

I agree with you Maizie. One big problem in the economy is that too much money is tied up in assets. People are in effect playing real-life Monopoly, making more profit from trading assets than is possible to do from working to produce anything productive. Money needs to be re-directed to real businesses and jobs, so that huge swathes of people are included in the whole process. We have what Thomas Piketty calls a "rentier society" and it's getting worse.

GrannyGravy13

growstuff

I'd actually be in favour of taking back every single penny to the Treasury when people die, but reducing taxation when people are alive, so people keep more of what they earn - but that is far too radical and will never happen!

Brilliant idea…

Think of the fun we could all have in our latter years , spending every last £50, then the State can look after us ??

Seriously, it would undermine businesses, entrepreneurs and investment in the U.K.
Why stay here, pay taxes all your life and then wave goodbye to any investments, property etc to the Government of the day when you die?

Ridiculous, no party would give headspace to such a bonkers idea, they know that it would render them unelectable!!!

You missed the part I wrote about reducing taxation while you're alive. You'd get to keep more of what you earn, but everybody would start with a clean slate. How would that reduce incentives to work hard and be entrepreneurial?

I know it's ridiculous because no politician would be brave enough to do it.

Think of the fun we could all have in our latter years , spending every last £50, then the State can look after us ??

Well, if you spent all that in the UK it would mostly return to the Treasury as tax (because just about every single transaction made is taxed) and the State would have oodles of money to look after you with...

What seems to be missed in all this debate is that to keep an economy running and to promote any sort of fairness for a state's citizens, money has to circulate; not be tied up in tax havens or in tax evasion (or is it 'avoidance', one is legal, the other isn't) schemes, or to be 'invested' to produce more money that never goes near the 'real', everyday economy. The more money that is taken out of circulation, the less there is to be shared.

I note that GG13 has not responded to my point that without that viscous ( Viscid; sticky. Glutinous; clammy; sticky; adhesive; tenacious ) inheritance tax wealth just becomes concentrated in the hands of fewer and fewer people.

Do we believe that working to support ourselves is a good thing or do we think that we should aspire to a life of idleness enabled by inherited wealth?

Indeed. In a limited way it would be ‘fair’, but life is not, and can’t be made so.

I haven’t inherited a penny, and I could wring my hands about the ‘unfairness’ of that; but I was born able-bodied in a relatively free country which has had, for most of my life, a welfare state with a safety net if I’d needed it. I have benefited from free health care and may need more in the future. I have been able to work in a relatively well-paid job that I mostly enjoyed and so on.

All of those things could be seen as ‘unfair’ to those who haven’t had them. I’m not saying any of that in a ‘count your blessings’ way - it’s just that if we start looking at ways to take away people’s ‘advantages’ life would get pretty grim all round, and nobody would be better off.

growstuff

I'd actually be in favour of taking back every single penny to the Treasury when people die, but reducing taxation when people are alive, so people keep more of what they earn - but that is far too radical and will never happen!

Brilliant idea…

Think of the fun we could all have in our latter years , spending every last £50, then the State can look after us ??

Seriously, it would undermine businesses, entrepreneurs and investment in the U.K.
Why stay here, pay taxes all your life and then wave goodbye to any investments, property etc to the Government of the day when you die?

Ridiculous, no party would give headspace to such a bonkers idea, they know that it would render them unelectable!!!

Dinahmo

Yes they could - inherited wealth. There are some people out there whose inherited wealth is such that they've never had to seek employment.

Ah yes. I don’t mix in those circles?. Of course that should be taxed as unearned income.

Dinahmo talks above about a house rising in value from 18,000 to 1.4 million. Geographical inequality is, IMO, greater than the generational variety. Our first house (not in the SE) cost £15,000 in 1980. It recently sold for £110,000. We lived there for 10 years, paying high interest rates, which rose again when we bought the next one.

At no point in our adult lives could we possibly have been able to move to another area, although we both worked in professional jobs to pay the mortgage.

Meanwhile we have seen friends sell up in London and buy very nice houses round here, or ones that take a fraction of their profits and leave them with high disposable incomes, having pushed up property prices here. This has got worse since the work from home boom, and homes that were once aspired to as somewhere to spend a quiet retirement have joined the ones near their parents that young can no longer afford to buy - out of the reach of locals. Social mobility doesn’t work both ways, and inequality affects older people as well as young ones.

Is the answer to that to take their money from them? What would be the point of that? It might make people like me feel a slight sense of schadenfreude in seeing the playing field levelled a bit, but it would make no difference to me, or to my children, and more to the point, it would be levelling down, not up.

Far better to invest properly across the country, so that there are no ‘hot spots’ and more two-way geographical mobility. As it is, it is only Londoners who can afford to take well-paid jobs in London. The rest of us can’t afford to apply.

I heard a term on R4 that was coined to encapsulate feelings of many about the ‘move from London and buy something cheaper elsewhere’ phenomenon. It was Fail In London Try Hastings.

Not possible and not producing a progressive outcome IMO Katie59.

It reminds me of those who tear into MPs and others fighting from the left, for using private education for their children. I wouldn't starve my children just because other children are starving. I would do what I feel is the best for them while doing what I can to alter opportunity - even if it's simply where I place my vote.

Campaign for more equality or opportunity by all means but you will never be able to make everyone exactly equal.

By changing the capital gains tax reliefs for a start. There are many ways in which the rich can mitigate their tax liabilities - putting property into trusts for example. Being tougher on IHT reliefs.

There is tax relief available on national heritage assets if you inherit a qualifying asset you can get relief from CGT and IHT provided that you comply with certain undertakings. One of these is making the asset available to public view. So, supposing you inherited a house that had been occupied by a famous historical figure you could open it to the public for a certain number of days each year. It doesn't have to be a palace or a stately home, it could be a small house.

It's not just houses, it's also works of art etc. The system is open to abuse.

As regards trusts you only have to look at the Westminster Family Trusts which are a very good example of how to protect your wealth.

There is no point aspiring to the state claiming everything, it’s not going to happen, no party that campaigned on that manifesto would get elected anywhere in the world.

So just pointless.