With the income tax threshold frozen at £12,570 since 2021-22, anyone with a state pension next year of more than £242 a week will have some tax to pay.

I’m confused that tax pays for nothing but wasting tax payers money is a common terminology used to contract resources

Yes, and I still don't understand why nobody has pointed out that the emperor has no clothes. I'm sorry Maisie - you're not wasting your time in the sense that I am discounting what you say, but I'm afraid I'm not really on board with it.

As I said, smoke and mirrors. Money wouldn’t be created if tax wasn’t coming along to back it.

And again, why do governments (and potential governments) of all stripes persist in taxing if the money is not needed?

I keep telling you why, Dd and you keep ignoring what I'm saying.

How would you propose governments could control the supply of money that they issue without taxing it? That was the cause of the famous Weimar Republic hyperinflation in thec1920s. Failure to tax adequately left too much money in circulation.

Germanshepherdsmum

As I said, smoke and mirrors. Money wouldn’t be created if tax wasn’t coming along to back it.

You might be surprised to know that I practically agree with that. It's almost like a bank loan.

Banks create money when they make a loan, in the expectation that the money will come back to them... (and they do create money for loans, they don't lend out other people's deposits. The BoE articles I linked to earlier say that loans are created money.)

MaizieD

^And again, why do governments (and potential governments) of all stripes persist in taxing if the money is not needed?^

I keep telling you why, Dd and you keep ignoring what I'm saying.

How would you propose governments could control the supply of money that they issue without taxing it? That was the cause of the famous Weimar Republic hyperinflation in thec1920s. Failure to tax adequately left too much money in circulation.

I'm not ignoring it - you are very fond of assigning motives to my posts that aren't there these days. I may be a bit slow, but it just doesn't compute for me. If the government doesn't need taxes, why levy them when they are unpopular?

I can understand the need to regulate the economy, but why are all politicians from all parties sticking to the 'taxpayers' money' mantra if it is based on a lie? If it is to demonise those at the bottom and pretend that inequality is based on meritocracy then why not tinker with wages rather than tax? People can be encouraged to spend or save by raising or lowering interest rates, or limiting/encouraging borrowing.

If taxes are not needed to fund spending, why does it matter that Amazon isn't paying enough, or that rich people have offshore accounts?

I thought that the hyperinflation in the WR was because of government debt and reparations levied after WW1, which led to overissue of currency, which became devalued on the world markets as a result. Is that not right?

If taxes are not needed to fund spending, why does it matter that Amazon isn’t paying enough, or that rich people have offshore accounts?

This.

Spending (creation of money by the government) won’t happen without the knowledge that taxes are coming along to back the money the government has created; otherwise the currency becomes worthless. The more taxation revenue that is expected, in theory the more money the government will create. Therefore it matters very much that taxes are paid.

Yes, I agree GMS.
I don’t understand the reasoning that taxes are not needed.

maddyone

^If taxes are not needed to fund spending, why does it matter that Amazon isn’t paying enough, or that rich people have offshore accounts?^

This.

Yes indeed.

I googled what taxes are used for-quite easy, but why do all the experts on here think taxes are collected, and for what use if not to fund spending?

They are very much needed, it’s just that the government doesn’t wait until it has saved up enough taxes (as you would with a household budget) before spending. The argument that the government can always create as much money as it wants just isn’t true, the amount created will always be linked to expectation of tax revenue - otherwise the currency would become worthless, as happened in the WR.

I pay tax on my teacher pension! I don’t get anywhere near £240 per week state pension !! But to be fair I did get it at 60 years and 5 months so had my share! Happy to pay tax, not happy how it has been mid-spent by this Gov !!!!

I'd love a state pension of £242 a week and would willing pay tax on it. Worked 42 years, 7 of which were part time (had a family) but no where near the amount mentioned. Due to having paid into a works pension I do pay tax on my total income of both pensions.

maddyone

Yes, I agree GMS.
I don’t understand the reasoning that taxes are not needed.

Who said that maddyone?

maddyone

Yes, I agree GMS.
I don’t understand the reasoning that taxes are not needed.

I haven't seen any reasoning that taxes aren't needed. Of course they are, but they don't work in the way that many people think.

Doodlebug

"Maybe there should be a cut-off after someone has paid in for X years, though - I'm not sure about that."

You mean someone like pensioners who have paid for years, like myself, I paid for 49 years, from starting work at 16 to retiring at 65

German hyperinflation happened because Germany had to pay back excessive debts in a foreign currency. The UK has a sovereign currency, so the same issue doesn't arise.

EEJit

Doodlebug

"Maybe there should be a cut-off after someone has paid in for X years, though - I'm not sure about that."

You mean someone like pensioners who have paid for years, like myself, I paid for 49 years, from starting work at 16 to retiring at 65

Yes, that's what I meant. Some people pay in from the age of 16 (even earlier in the past) and others start after graduation at 21 or 22. Some take time out to look after children or work part-time. Some retire early. Maybe (and I haven't thought this through) everyone should be expected to contribute for at least a set number of years, and be able to choose when in their working lives to do it?

I don't mind paying tax. I pay it on my occupational pension, and therefore everything I earn over that is immediately taxed. Of course I would like to have more to spend, but I see it as fair enough, really. I believe in a large state, and that the only way to have facilities for all is to pay for them collectively. I also believe that those who have more should pay more, but that is based on the philosophy of 'from each according to ability: to each according to need', which should, IMO, underpin a civilised society.

When those who are perfectly able to contribute choose not to bother, but still get to use the things that others have paid for, then I do mind. People should be able to make choices about their lifestyles - stay at home with children, take early retirement, work part-time - whatever they like. But they should not, IMO, be able to choose that other people should pay for it. Anyone not able to work should of course be fully supported by 'the system', but otherwise we should all pay in if we expect to take out (by which I don't just mean benefits, but things like education, health, roads, and all public services).

How grasping does this thread have to get.

The legacy pension, if you get the full amount, is £156.20 per week. You would only get £240 a week if you have additional income and, if you pay tax at the moment, you obviously do. Lucky you.

This is a problem that is only going to affect a small number those whose basic pension is topped up by some goverment additional income such as SERPS, on which they have never previously had to pay tax and where tax isn't paid through PAYE.

Isn't it possible to show concern about a small group who are not you? Isn't it possible to talk about and understand some pensioners have never paid tax without immediately suggesting they must have been breaking the law or is that because it is what you would do in their place? Isn't it possible just to wish this small group could be informed, so it doesn't come as a shock to them and they can know they have put the money - however small - aside.

I agree that state pension should be taxed but if you have no other income from which tax due can be collected then it could obviously be a problem for a lot of people. As HMRC are in such a state anyway and it's so very difficult to get any kind of response from them then I doubt they would cope well with having to collect extra monies from thousands or even millions of extra people especially if they have to complete tax returns.

I don’t think that there should be a cut-off point for paying taxes. If you have taxable income you should pay tax on it whatever your age and no matter how long you have been paying. We need the tax revenue and such a proposal would cause huge inter generational ill feeling. What about the retired professionals who take on a consultancy with their old firms, in return for a very healthy income, for instance? It’s a very common move, Something I could have done but chose not to.

Yes threshold should be much higher- why is it below living wage?And why charge pensioners tax on pension when theyve ALREADY paid tax on their earnings that qualified them for the pension in the first place? Thats just making them pay twice.Makes no sense.(unless youre a greedy money- grabbing government of course)

when we had the rise in april 2023 (state pension, occupational pension and dla) this took me back into paying income tax again after several years.
as i get an occupational pension income tax is deducted from this and until they raise the personal allowance i will continue to pay income tax.
when next year's rise comes into effect (when they make their minds up as to whether we get 8.5% or 7.5%) i will be paying even more tax.
i'm not exactly happy about this but as i said, until they raise the personal allowance i've just got to pay up and look pleasant.

I pay tax anyway as I have an occupational pension its not large but it puts me in the tax bracket. As the pension is not enough to live on they should definitely raise the tax threshold because that will help everyone not just pensioners. I also think the Winter Fuel Allowance should be only given to those on Pension Credit. However, pensioners do pay tax. We pay fuel tax on our petrol and we pay VAT on goods we purchase. Even the low paid pensioners have to pay that.

Who has a state pension of more than £242 ????