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

National Insurance Contributions are a significant deduction for most people of working age - up to a certain level (as Maizie pointed out). People who earn money from investments don't pay it, nor is it paid by people over state pension age, who are sometimes wealthier and have higher incomes than those of working age. It's a regressive tax.

Katie59

Property inflation is very high currently, but unless you are selling and downsizing, you are buying in the same market (you need a roof over your head). Even if you downsize, moving costs and Stamp duty will eat up any spare cash.

Property inflation is the source of many "baby boomer"'s wealth and the number who own second properties is significant. It means that it's extremely difficult for younger people to get on the property ladder unless they inherit money or older relatives help, thus entrenching intergenerational wealth.

People cannot be held responsible for the increase in price of their property, that is due to market forces.

People pay taxes on income, on unearned income over certain levels (ISA’s etc are tax free).

I cannot understand the obsessive nature of people opposed to folks leaving a legacy for their children/grandchildren, tax has been payed previously and inheritance tax is viscous

I agree with taxation on income (earned or otherwise), but I don't understand why it matters if some pensioners are wealthier than some people of working age.

The resentment felt by some when older people have anything more than a basic income is inexplicable to me.

Doodledog

I agree with taxation on income (earned or otherwise), but I don't understand why it matters if some pensioners are wealthier than some people of working age.

The resentment felt by some when older people have anything more than a basic income is inexplicable to me.

I agree, totally irrational.

growstuff

Katie59

Property inflation is very high currently, but unless you are selling and downsizing, you are buying in the same market (you need a roof over your head). Even if you downsize, moving costs and Stamp duty will eat up any spare cash.

Property inflation is the source of many "baby boomer"'s wealth and the number who own second properties is significant. It means that it's extremely difficult for younger people to get on the property ladder unless they inherit money or older relatives help, thus entrenching intergenerational wealth.

Correct of course, in addition the pensions a great many have and other investments, those retired or near are very well provided for. The majority of us went into work from school gaining qualifications while earning, the employment market is very different now.
Those that get a good job from college are OK but nearly half of leavers are not doing graduate work, have student loans and no savings, open market rents mean they can’t save, a very hard situation.

People pay taxes on income, on unearned income over certain levels (ISA’s etc are tax free).

This strand of the discussion on this thread started with the assertion from Katie59 that wealthy people paid all sorts of taxes, the implication being that they paid their fair share.

It is actually a fact that the wealthier people are the lower the proportion of their income is that is paid out in tax. For the reasons that I outlined in my earlier post. This seems to have passed people by.

Why should the people who depend solely on their earnings have to pay a higher percentage of them out in tax than do the wealthy who have several sources of income?

If excess wealth is passed onto the next generation without being taxed wealth becomes more and more concentrated in the hands of the already wealthy. This leaves less and less to be shared among the rest of the nation's citizens. How does this contribute to the wellbeing of society if the rich get richer with easy access to resources while the rest have to fight for whatever is left over?

Or is there no such thing as society, just every person out for themselves?

Additionally, what use is this excess wealth put to?

It always amuses me somewhat that people vigorously defend the acquisition of their relative wealth by insisting that they worked hard for it and have earned every penny of it. They always seem to regard this as a great moral virtue. But then they pass it on to their children who don't have to lift a finger to earn any of it..

From the moral rectitude of the Protestant work ethic to degenerate idleness in two generations

Great post Maizie. I agree with every word. (But you probably know that I'd think that).

Doodledog

I agree with taxation on income (earned or otherwise), but I don't understand why it matters if some pensioners are wealthier than some people of working age.

The resentment felt by some when older people have anything more than a basic income is inexplicable to me.

It's not resentment, unless you don't believe that those who can afford most should be taxed the most.

GrannyGravy13

People cannot be held responsible for the increase in price of their property, that is due to market forces.

People pay taxes on income, on unearned income over certain levels (ISA’s etc are tax free).

I cannot understand the obsessive nature of people opposed to folks leaving a legacy for their children/grandchildren, tax has been payed previously and inheritance tax is viscous

Because it means that some people start life with an advantage which others can never hope to recoup, merely because they were lucky enough to have the parents they did.

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!

growstuff

Doodledog

I agree with taxation on income (earned or otherwise), but I don't understand why it matters if some pensioners are wealthier than some people of working age.

The resentment felt by some when older people have anything more than a basic income is inexplicable to me.

It's not resentment, unless you don't believe that those who can afford most should be taxed the most.

And why shouldn't they pay the 12% tax (aka National Insurance) which working people pay? When people bleat on about low pensions in the UK, they conveniently forget that retired people in most other countries continue to pay for healthcare.

Pensioners who continue to work probably should pay NI, but I imagine that they will mainly be the less well-off ones, so I suspect that wouldn’t do a lot to level up.

The trouble with NI is that it is only paid by those in work, so people who can afford not to work escape it anyway. It would be better to roll it into general taxation and apply it to all.

“Everything going back to the state”

That sounds like communism to me, that’s been proven to be a failure and the political elite are the only ones that benefit, because nobody cares, there is nothing to gain by putting in any effort.

It is indeed everyone out for themselves, it’s the government that balances society by taxing those that can pay and helps those that can’t. For the last 50 yrs all governments have encouraged individual enterprise, no more so than the help given to women to maintain a career. You might think that it is not done fairly so vote for a left wing government, if enough others agree maybe there will be change.

Ordinary people can accumulate wealth, you learn a skill, teacher, nurse, plumber, accountant, take your pick, progress the career, many couples do this and it can be done now. The problem is for those that don’t have any relevant skill and end up on low wages.

Doodledog

The trouble with NI is that it is only paid by those in work, so people who can afford not to work escape it anyway. It would be better to roll it into general taxation and apply it to all.

In general it is better to pay NI voluntarily if you can afford it because you then get a full state pension

GrannyGravy13

People cannot be held responsible for the increase in price of their property, that is due to market forces.

People pay taxes on income, on unearned income over certain levels (ISA’s etc are tax free).

I cannot understand the obsessive nature of people opposed to folks leaving a legacy for their children/grandchildren, tax has been payed previously and inheritance tax is viscous

People are not "held responsible" for the increase in the price of their property. Some posters argue that they should pay a progressive tax on all their income from work plus all they earn from investments.

No one is obsessed with anyone leaving something to anyone else. However, we argue that the testator should have paid a progressive tax on all their earned income. 'Unearned' income and capital growth should be added to and taxed on the same scale. That would not stop people from leaving what they chose where they chose, although it may reduce it. It would mean you cannot earn more from investment than you can from work.

I agree, but you only pay a fraction of it if you can afford not to work. If you have children the state pays your NI for you, and if not you pay the voluntary element, which is far lower than most people in work will pay.

A friend of mine worked between the ages of 22 and 25 - between leaving university and having her first child - and has not worked since, as her husband earned enough to ‘support’ her. Her last child was born when she was 42, and the state paid her NI until that child was 12, so my friend was 54. She has paid voluntary NI since then, so will get a full pension based on 12 years of much-reduced payments, when so many women on low pay or insecure contracts don’t have a full record after decades of work, but their pensions will be reduced as a result.

That’s not levelling up, IMO.

growstuff

growstuff

Doodledog

I agree with taxation on income (earned or otherwise), but I don't understand why it matters if some pensioners are wealthier than some people of working age.

The resentment felt by some when older people have anything more than a basic income is inexplicable to me.

It's not resentment, unless you don't believe that those who can afford most should be taxed the most.

And why shouldn't they pay the 12% tax (aka National Insurance) which working people pay? When people bleat on about low pensions in the UK, they conveniently forget that retired people in most other countries continue to pay for healthcare.

Healthcare is mainly paid for out of general taxation which many retired people pay.

If those in receipt of the State pension had to pay 12% NI would they be the only sector paying for their own "benefits"?

However, I have long thought that perhaps retired people who are above a certain threshold should pay a lower rate of NI, eg 3%, towards the NHS.
Or that general taxation for all needs to go up by a percentage which should be ringfenced for the NHS.

If you treat it all as income, Doodledog those with lower work income from work would, under the system suggested, pay less on the income from investments.

If you have children the state pays your NI for you, and if not you pay the voluntary element, which is far lower than most people in work will pay.

NI has outlived its use - if it ever fulfilled it. It's time it was all income tax. What drawbacks are there to it not existing, I wonder? In the case you highlight, the state is just ensuring that all citizens get citizen benefits. NI is not a good way of identifying citizenship, so they tweak it.

I don't have an opinion on working or not working - that should be an individual choice with each person paying tax as an individual.

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!

Absolutely agree.

Most of us on here are retired I guess and many of us own a house which is likely to be mortgage free at our age.

When we bought our house in London back in 1978 it cost us £18,500. It was a wreck and over the years we probably spent £10,000 on doing it up. MY OH worked 7 days a week either on his business or on the house. Our mortgage was around £15,000.

That house is now worth around £1.4 million. Had we stayed there we would have gained around £1.37 million - tax free - just by staying in the same house. Had we sold that house and bought another do-uppable in London we would have gained even more. As it happens we didn't do that and our capital has reduced over the years.

I put forward Growstuff's suggestion in the Daily Express about 20 years ago and received a torrent of abuse from the readers.

I agree that NI should be rolled into tax, and also that people should be taxed as individuals, not households.

I’m not sure I understand the point about income from investments. Someone not earning enough to pay NI is probably unlikely to have investments, surely? Or have I missed the point entirely?

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

Dinahmo

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!

Absolutely agree.

Most of us on here are retired I guess and many of us own a house which is likely to be mortgage free at our age.

When we bought our house in London back in 1978 it cost us £18,500. It was a wreck and over the years we probably spent £10,000 on doing it up. MY OH worked 7 days a week either on his business or on the house. Our mortgage was around £15,000.

That house is now worth around £1.4 million. Had we stayed there we would have gained around £1.37 million - tax free - just by staying in the same house. Had we sold that house and bought another do-uppable in London we would have gained even more. As it happens we didn't do that and our capital has reduced over the years.

I put forward Growstuff's suggestion in the Daily Express about 20 years ago and received a torrent of abuse from the readers.

How will that close the gap between rich and poor? Those with a great deal invested will find a way around it. Those on middle incomes will find that more difficult, those on lower incomes, impossible.

Politics is and probably should be the art of the possible, not a hair shirt.

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.