Redistribution of wealth in the UK

GrannySeaside51

Anyone earning more than £125,000 receives no personal tax allowance.

Thank you.

The current tax regime distributes more money from upper earners to lower earners and those on benefits than at any time since the 1970’s.

Socialism dooms everyone to mediocrity and erodes truth and freedom. Liberty is the ultimate good and what every citizen in every unfree nation longs for. Ask the women in Afghanistan whether they want their university places back or more money.

Lilyflower

The current tax regime distributes more money from upper earners to lower earners and those on benefits than at any time since the 1970’s.

Socialism dooms everyone to mediocrity and erodes truth and freedom. Liberty is the ultimate good and what every citizen in every unfree nation longs for. Ask the women in Afghanistan whether they want their university places back or more money.

A follower of Ayn Rand perhaps?

Lilyflower

The current tax regime distributes more money from upper earners to lower earners and those on benefits than at any time since the 1970’s.

Socialism dooms everyone to mediocrity and erodes truth and freedom. Liberty is the ultimate good and what every citizen in every unfree nation longs for. Ask the women in Afghanistan whether they want their university places back or more money.

Which country are you talking about?

How exactly does socialism erode truth and freedom?

PS. It's news to me that Afghan women are being offered more money in lieu of university places.

Having lived in Spain and in France, I can see that he UK is lacking behind in so many places ....my French neighbours were getting 2.000 euros EACH in OAP (they DID pay more into their system than we do ! Healthcare SHOULD be contributory for all but those with a little income ....what you pay (Mutuells insurance in France contributory ...you ay 25 euros to see the GP but get all that bar 2 euros back from your insurer) the UK actuaries have never re assigned the probability of the old living as long as we do now ....or drugs and treatments to keep us living longer ...so there is not enough money in the pot to fund our pension ...I read today pension payments will be re assessed (didn;t say when !) with the possibility to wealthy (again, no mention of what they consider wealth !) no longer receiving any !!!!! huh ! Doubtless anyone arriving in this country illegally will still be given money, housing, healthcare etc etc etc whilst British Nationals are forgotten (or slowly killed off through lack of treatments, hospital care, long term care, etc etc !) but for BREXIT I would have stayed in Europe ...............

Percentage of gross income paid on direct and indirect taxation. By quintiles. 1 is lowest quintile

1 = 33.8%
2 = 27.7%
3 = 29.!%
4 = 29.7%
5 = 35.9%

So, quite wrong, Lilyflower. The bottom 20% of earners pays almost as much of their income taxation as does the top 20%

Interesting when it comes to indirect taxes paid as a %age of disposable income

1 = 22.6%
2 = 15.4%
3 = 13.8%
4 = 11.5%
5 = 6%.

I realise that in monetary terms this in no way says that the top 20% spend less than the lowest 20% into the economy, but it does, for me, illustrate that the tax 'burden' gets heavier as one gets poorer. It also suggests that the 'poor' are more likely than the wealthy to spend any extra money they may get into the domestic economy.

Figures, for 2021, from the ONS, by the way

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

Although I agree that the rich should be taxed more on personal income, we have to recognise that they could leave the UK, earn more and be taxed less.

So it is very much a double edged sword, it would be
popular with voters while not raising much if any extra tax.

Katie59

Although I agree that the rich should be taxed more on personal income, we have to recognise that they could leave the UK, earn more and be taxed less.

So it is very much a double edged sword, it would be
popular with voters while not raising much if any extra tax.

I don’t know how you could know that more tax would not be raised Katie59? A few high profile people at the top of the income scale will no doubt leave the UK to avoid paying high levels of tax, but in reality most won’t.

It's not really a question of taxing to get more income; it's taxing to prevent money being constantly sucked out of the economy into the hands of the already wealthy; who don't spend it in the economy.

Casdon I wouldn't relie on that, in this modern world people are moving round all the time. Many of those listed on Brtish rich lists, may manage British companies but live elswhere. the Channel islands and the Isle of Man provide very cosy refuges for rich people avoiding British taxation. I would have agreed with you once, but no more

One of the results of Brexit is the number of people taking out foreign citizenship. I am not talking about UK residents and British citizens becoming Irish from the comfort of their Uk homes, but I have been surprised how many older people in retirement and friends of my DC, currently working in EU countries, have taken out the citizenship of their cueent country of abode, even if that means resigning their Brirtish citizen ship when dual nationality is not possible.

Giving up citizenship is a far more extreme step than just moving country, yet many modestly paid people are doing it.

I would rely on it Monica, because it’s not going to happen. I do understand the context. We are talking about a majority of people who work in the UK, have homes here, often have families, and ties. We certainly aren’t only talking about the top hundred or whatever it is on the Rich List. There’s a lot of talk about emigration, but the majority won’t actually do it.

If we penalise the rich with punative taxes and a clamp down on shares, bonuses etc. how much in real terms, shared fairly, would that give the poor in this country - and for how long? A one off payment possibly. I have a vague memory of an economics lesson at school where the blackboard was headed 'You cannot help the poor by destroying the rich' and the teacher proceeded to explain that 'the rich' are the tiny tip of the iceberg - and are quite capapble of leaving this country if threatened with such measures. What is the answer?

MaizieD

It's not really a question of taxing to get more income; it's taxing to prevent money being constantly sucked out of the economy into the hands of the already wealthy; who don't spend it in the economy.

Many don’t spend the income in a useful way, they spend it on luxuries, bigger cars, bigger houses, extravagant holidays, there needs to be more incentive to invest in useful enterprise. It’s not just the super rich either, right through the social profile we reward ourselves with new cars and holidays, most of this cash goes overseas not benefiting the UK.

Casdon

Katie59

Although I agree that the rich should be taxed more on personal income, we have to recognise that they could leave the UK, earn more and be taxed less.

So it is very much a double edged sword, it would be
popular with voters while not raising much if any extra tax.

I don’t know how you could know that more tax would not be raised Katie59? A few high profile people at the top of the income scale will no doubt leave the UK to avoid paying high levels of tax, but in reality most won’t.

Executives at the top level are very mobile, we have many foreign executives working in the UK and many UK executives are working overseas. That’s not including Expat wealthy successive governments have not raised taxes because more will move overseas.

Def a huge divide between those who have and those who don’t. We’re lucky in that we’re not rich but we do have good pensions and can afford heating etc. We donate weekly to the local food bank and give to charities etc but still feels very uncomfortable when you see what some have to endure and often through no fault of their own.

Katie59

Casdon

Katie59

Although I agree that the rich should be taxed more on personal income, we have to recognise that they could leave the UK, earn more and be taxed less.

So it is very much a double edged sword, it would be
popular with voters while not raising much if any extra tax.

I don’t know how you could know that more tax would not be raised Katie59? A few high profile people at the top of the income scale will no doubt leave the UK to avoid paying high levels of tax, but in reality most won’t.

Executives at the top level are very mobile, we have many foreign executives working in the UK and many UK executives are working overseas. That’s not including Expat wealthy successive governments have not raised taxes because more will move overseas.

According to data from PricewaterhouseCoopers, income tax rates for the highest earners are relatively low in the UK compared to other European OECD nations.

Rosina

If we penalise the rich with punative taxes and a clamp down on shares, bonuses etc. how much in real terms, shared fairly, would that give the poor in this country - and for how long? A one off payment possibly. I have a vague memory of an economics lesson at school where the blackboard was headed 'You cannot help the poor by destroying the rich' and the teacher proceeded to explain that 'the rich' are the tiny tip of the iceberg - and are quite capapble of leaving this country if threatened with such measures. What is the answer?

If that was an economics lesson, Rosina, then you had a very poor teacher.

Nobody who knows what they are talking about is suggesting that there has to be a one off wholesale confiscation and redistribution of 'wealth', as in the Russian Revolution.

The objective is to prevent the wealthy from accumulating even more wealth, and to even out the distribution of the money that comes into the economy over the whole of the populace.

Whether you regard it as newly created government (i.e public money) money (which is what it factually is) or a recycling of tax and other revenues, there is a continuous flow of money from the state into the domestic economy (the domestic economy being the one most of us live in, where we spend most of our money on shopping and leisure activities) . It is the state that pays for our public services and continually monitors the supply of money in the economy, issuing more money if they think it necessary,

In theory the money the state issues should follow a circular flow; state -> purchases and wages -> consumer spending -> tax -> state and so on, round and round.

Of course, in practice not all the money that the state issues returns to it because a) some people save some of their money, b) some of it is spent abroad on holidays, c) a great deal of it goes to the wealthy, who, as Katy59 detailed earlier, don't spend much of it in the domestic economy. So much of their money doesn't return to the state in the same way that the money of those lower down the income scales does. This means that the state has to issue more money to compensate for that which is 'lost' to the wealthy and to make sure that there is enough to keep the domestic economy going. (Except that a government, like our current one, ideologically opposed to issuing state money doesn't put much in. They call it 'saving money' and 'cutting costs')

A more even distribution of money would mean that more of it stays in the domestic economy with the people who spend it there. And that means the people who are currently very poor and what used to be called 'the middling sort', the reasonably well off who do still spend their money mainly in the domestic economy.

The domestic economy is really important, because without a thriving domestic economy businesses are reluctant to invest because they need us, the consumers, to spend on their goods and services; if we have no spare money to spend they won't make any profit, and, likewise, many of the small and medium size businesses which depend on our spending would fail, with a subsequent loss of jobs.

I wasn't suggesting we do a Robin Hood style mugging of the rich, and remove every penny, laughing callously.
My point was that this is a complex matter, and it seems even Labour governments ( I can recall them wanting to 'Squeeze the rich until the pips squeak' ) have not achieved what we would all probably like to see. (Except the rich, of course)

I wasn't suggesting we do a Robin Hood style mugging of the rich, and remove every penny, laughing callously.

No, but I think that that was how your teacher was trying to present it

The Labour 'squeeze the rich' was a long time ago now. Apart from talking about wealth taxes, I haven't really heard much in the way of positive redistributive policies from them lately. But perhaps they'll be a bit braver once in office.

If only Yorkshire could become independent of the UK and join the EU then I could have a new passport and freedom of movement as before Brexit. No hope, though!

MaizieD

^I wasn't suggesting we do a Robin Hood style mugging of the rich, and remove every penny, laughing callously.^

No, but I think that that was how your teacher was trying to present it

The Labour 'squeeze the rich' was a long time ago now. Apart from talking about wealth taxes, I haven't really heard much in the way of positive redistributive policies from them lately. But perhaps they'll be a bit braver once in office.

Even with a change of government, we still have
1. The economic effects of a pandemic which lasted two years
2. The war in Ukraine which shows little signs of a fast resolution
3. The subsequent energy shortage and price hikes
These problems remain for government of whichever persuasion. The policies might have a different set of faces fronting them but the solutions will still not be easy, and the civil servants will continue to be in place.
Rather than wish for regime change on an almost continuous basis, better to ask how to solve the crisis confronting us all.

Even with a change of government, we still have
1. The economic effects of a pandemic which lasted two years

The economy was recovering until the war in Ukraine caused the hike in energy prices and some shortages which has affected food prices. With some investment in the economy, such as increased funding for the NHS and public sector wage increases, and a programme of investment in Green Energy these could be ameliorated.

2. The war in Ukraine which shows little signs of a fast resolution

Government will find the money to fund our aid to Ukraine

3. The subsequent energy shortage and price hikes

See 1)

Of course, what you haven't mentioned is Brexit, which is having a seriously bad effect on businesses large and small, which traded with the EU and are now losing custom because of the difficulties they are having in continuing that trade. I see no solution to that from our current 'Brexit' government. We need a government which will move closer to the EU with a view to rejoining the Single Market and a Customs union.

Rather than wish for regime change on an almost continuous basis, better to ask how to solve the crisis confronting us all.

The only thing that will solve this is regime change, because the current government either has no idea how to solve it or is ideologically opposed to doing so. There's nothing we can do as individuals except make our feelings known and vote for better at the next GE.

Which party is the better option ??