Surely we must pay more taxes!?

David49, MaizieD, You really do have very cliched ideas about what better off people may or may not do, whether the silly stuff about them all being opposed to paying more tax

Perhaps you'd like to explain, then, MOnica why do the wealthy start squealing the minute a government suggests that they could carry a larger tax burden? VAT on private education, IHT, taxing non-doms? Why do they try to make a case for themselves being taxed at a lower rate than ordinary mortals? Capital gains tax, dividend tax?

Many seem to be suffering from a variety of Stockholm syndrome on this forum. Let's defend the super wealthy even if their contribution to the wellbeing of the country and their fellow citizens is as tiny as they can possibly make it but be perfectly complacent about 1 in 5 of our population living in poverty? Why?

It's bizarre. Water bills are about to rise because the government refuses to nationalise failing water companies; energy bills are set to rise, it looks as though interest rates aren't going to be cut in the foreseeable future (whoopee, say the wealthy, we're making lots of interest on our money) and people are offering themselves as sacrifices ("I don't mind paying more tax", they say "if it helps to improve things") while defending the reluctance to do the same of those who are more than able to absorb extra costs without a moment's thought...

I do read a wee bit more economics and sociology than the rubbish that is printed in the media,on social media and in blogs...

nanna8

We have some friends who are extremely wealthy by anyone’s standards. They are very,very tight with money to the extent it is just laughable. They certainly would and do avoid any tax they can. I guess that is why they are so rich! They pay professionals to tell them how to get round tax laws - and,sadly, it seems to work. I don’t b know if that happens in the UK but I suspect it might.

Of course it does!

MOnica I really do think you should look around you to understand how poor many people in the UK are - and that paying for healthcare and dentistry etc is a pipedream for many. Incidentally, private dentistry does not release more appointments for those who can't pay. It just means that more dentists don't work for the NHS, so NHS appointments are even more difficult to book.

It really is nit-picking to claim that the state pension is not a benefit. Most people claiming Universal Credit have paid National Insurance at some stage and all have paid tax in some form or other. Presumably, using your logic, Universal Credit isn't a benefit either. The fact is that recipients pay for it.

I wouldn’t mind paying a bit more in tax if I could be 100% sure that none of it would be wasted.

There used to be a publication entitled ‘The Bumper Book of Government Waste’ - I never did get a copy but if it’s still going I might just look into that again.

David49, MaizieD, You really do have very cliched ideas about what better off people may or may not do, whether the silly stuff about them all being opposed to paying more tax or how they spend their time. You need to get out more and not just believe what you read in the papers.

I would point out that the state pension is not a benefit. It is a contributory pension. As pensioners we cannot be held responsible for the decisions of all governments to pay these pensions out of current income rather than invest our contributions, anymore than we can be held responsible for the investment policies of the pension funds that provide our occupational or personal pensions if we have them. We can only contribute and hope for the best.

Many better off people are de facto paying for their medical care, whether going to private dentists rather than NHS care to enable free care to be available for those who need it, or paying for private medical care. More and more people using private care are not part of health plans but pay directly.

We have some friends who are extremely wealthy by anyone’s standards. They are very,very tight with money to the extent it is just laughable. They certainly would and do avoid any tax they can. I guess that is why they are so rich! They pay professionals to tell them how to get round tax laws - and,sadly, it seems to work. I don’t b know if that happens in the UK but I suspect it might.

Getting money to circulate more would result in more taxes being paid. That won't happen if a relatively small group of people hoard money they don't really need.

David There are plenty of tax loopholes which could be closed without increasing the top rate of income tax. Pension contributions and ISAs are just two.

I'd like to hear any argument why people in the top half of the income distribution curve should benefit from tax loopholes more than those in the bottom half.

Thanks growstuff I hadn’t understood how that works. We don’t get a state pension because we have a work one which is at a level higher than the ‘low income’ rate. Still not that good but liveable.

I completely understand why the wealthy posters on GN want to increase income tax and and keep the services free, because they have already had the benefits that system provides and want to continue to benefit from it.

My point of view is that income tax is high enough at 45% plus to increase further is a disincentive for enterprise, those successful individuals can well afford to pay into health insurance or elderly care and certainly don’t need the state pension. Instead of buying a second home, or frequent long haul holidays, or a new luxury car every 3 yrs, they can well afford to well afford to loose state benefits.

That would free up massive public services for those not so fortunate, it is the system used in many countries, if circumstances change and wealth reduces the state system picks up the costs.

Expanding the public spending issues if you think Cameron style austerity was bad, expect worse, to increase defence spending and increase health spending is a massive challenge. There is ample wealth in the UK we are not using it properly, those on low income obviously want universal benefits they NEED it, the wealthy also want it because they FREELOAD on it.

nanna8

We don’t pay tax. Once you are retired, unless you have investments, you don’t here. Nothing dodgy about it, we paid for our pensions whilst we worked. We are not rich and our income is low but then we don’t have a mortgage.

In the UK, people don't pay tax on pension contributions when they make the contributions. Most end up paying less tax on the money anyway because most don't meet the same tax thresholds after retirement from paid work. People pay tax on NI. The state pension is based on the number of weeks/years people have paid NI not on the monetary value of contributions. Most people have paid for their state pensions - some haven't - and some receive pension credit rather than being left destitute. Some pensioners have accrued shedloads of assets without working - I see no reason at all why they shouldn't pay tax, especially as they don't contribute to their health costs (which I believe, even as pensioners, you do in Australia).

Autre pays, autres mœurs!

nanna8

growstuff

nanna8

The trouble with the very wealthy is that many of them use tax havens across the world and don’t like parting with any of their money at all. Not all of them of course but a large number. Some actually flee the country ( mine too) and live elsewhere ,USA or wherever. Many pop stars used to do this and I don’t think things have changed.

Tales about the "very wealthy" seem to be used by anybody towards the wealthy end of the spectrum to protect their interests.

I have absolutely no idea what you are getting at,sorry.

It's simple. Over half of people have income above the average income (by definition). Naturally, they want to preserve their assets, so every time they're threatened, they jump up and down, screech "not fair" and shout "look at the very wealthy - not us!"

They don't want to share their assets with those who have less than the average (50% by definition), so they don't mind too much if services are cut - after all, they can afford to pay for what they need/want - who cares about the rest?

PS. I realise that's stereotypical, but there are certainly some who fit the stereotype.

growstuff

nanna8

The trouble with the very wealthy is that many of them use tax havens across the world and don’t like parting with any of their money at all. Not all of them of course but a large number. Some actually flee the country ( mine too) and live elsewhere ,USA or wherever. Many pop stars used to do this and I don’t think things have changed.

Tales about the "very wealthy" seem to be used by anybody towards the wealthy end of the spectrum to protect their interests.

I have absolutely no idea what you are getting at,sorry.

We don’t pay tax. Once you are retired, unless you have investments, you don’t here. Nothing dodgy about it, we paid for our pensions whilst we worked. We are not rich and our income is low but then we don’t have a mortgage.

silverbrooks

Grade 6-7 is now known as Principle or team leader.

I’m still in contact with many of my colleagues, some of whom are still working.

Well the PM and the Labour Party were going to target the billionaires and trillionaires, they certainly went on about it and yes, they were going to be made to pay blah, blah, blah. Oh wait.....

MayBee70

Can’t we just rejoin the customs union and/ or the single market? Just imagine the outcry from the Conservatives after saying that Labour would have to raise taxes.

Brian Cox ( the scientist, not the actor) has just said the same on Facebook. I rest my case….

MOnica, you are confining your observations to ‘earners’, i.e. people who are paying income tax. But there are far more wealthy people who don’t pay income tax, or who structure their incomes to ensure they pay as little income tax as possible. Remember our last PM, an exceedingly wealthy man who paid only 22% of his income in direct taxation?

Of your cited sources I would disregard the so called Taxpayers Alliance as they exist only to lobby for minimal taxation of the wealthy . They have no interest in minimising taxation for common or garden PAYE tax payers.

But the number of people who could pay more tax without their lifestyle being too adversely is maybe higher than you think.

If the principle is accepted that those with the "broadest shoulders" should pay more tax than those at the bottom of the income, it's not too difficult to devise a system of progressive taxation.

Incidentally, do you have any details of the third of adults who pay no income tax? Is it because they're so poor they don't have any income? Or is it because they have other sources of income than income tax? (eg my ex hasn't paid income tax for nearly 30 years because he hasn't had paid work - he earns his money from property development).

It would be interesting to know how much of the money from the millionaires who are about to leave the country actually circulates in the UK economy. Some of them aren't UK nationals anyway.

Another fan of Richard Murphy and Dan Neidle.

There are so many ways that more revenue could be raised but it’s the path of least resistance and with over 37 million people liable to tax, the easiest route is PAYE. Everything else, pursuing evaders and avoiders and complex casework requires highly trained staff.

When you look at the breakdown of the 40 billion annual tax gap, it’s small businesses that are the worst offenders.

The share of the tax gap attributed to small businesses has increased over the last 5 years, from 44% of the overall tax gap in 2018 to 2019 to 60% in 2022 to 2023.

HMRC need more expert staff.

TaxWatch reported:

• 40% reduction in civil servants defined as ‘tax professionals’ from 2016 to 2023

• The overall HMRC workforce has shrunk since 2010, despite the challenges of the department’s workload increasing as the tax regime has become more complex

• Salaries paid to senior HMRC staff have fallen by at least 20% when adjusted for inflation since 2010, and now lag the civil service average by around £2,000.

Fully qualified tax professionals within HMRC

The in-house tax technical development programme, which is seen as equivalent to the Chartered Tax Adviser qualification, is currently known as the Tax Specialist Programme. Very limited numbers start this course each year, and the numbers having completed it in recent years are suggestive of a high drop out/non completion rate, despite the fact the course has been scaled back to three years duration (previously it was four years). There has been a trend of accepting existing civil servants onto the course with much lower entry requirements, for what remains an academically rigorous course. The numbers finishing the course are insufficient to take over from the retirement and departure rates of staff that came through the qualification and built up decades of experience, who are now reaching the end of their careers. HMRC doesn’t track the staff holding these highest qualifications, which is so fundamental to workforce planning and staff skills development.

A perennial problem for HMRC is also that staff with significant internal training and experience are much sought-after within private practice, especially in particular areas that have grown disproportionately in recent years, such as Dispute Resolution and Investigations. Whilst this has always been a factor, recent changes to the HMRC office estate combined with mandatory 60% office attendance requirements and pay differentials risk exacerbating this trend further.

Recruitment of fully qualified tax professionals from the private sector has largely been unsuccessful because of the inability to offer comparable salaries. According to the 2023 Tax Salary Guide produced by recruitment agency Pure, the minimum package for a manager in the private sector is £85,000, whereas the equivalent HMRC grade 7/6 is on a median salary for the 2022-23 year of £58,200.

I have experience of this as I was grade 7 and did train for four years. The training was tough and the entry requirements used to be very high. Once qualified you became a target for the private sector to recruit. I did resist for several years but eventually moved to the private sector in the late 1980s.

Barleyfields

That question never gets answered MOnica.

I know, which is why I keep asking it.

Every one says 'tax the wealthy', but for that you need to know exactly what level of income you have in mind. The HMRC do not work on wooly definitions like 'anyone who can manage without the WFA'

On a more practical basis, the number of wealthy people in this country is fewer than you would expect. The top 1% of workers in this country earn on average £186k a year, the top 5% around £87k and the top 10% £72k

In 2024-25 the top ten per cent of income tax payers earned a third of all income and paid two thirds of income tax. A third of the adult population pay no income tax at all

The UK is also set to lose more than 500,000, or 17 per cent, of its millionaires by 2028. With fewer higher earners, who currently pay a large portion of income tax, the burden will be passed to those further down the income scale who can least afford it.

No links because I collected this information from a whole variety of sources including ONS, Statista, Tax Payers Alliance and others.. I would fill a whole GN page with ll the links.

MayBee70

Can’t we just rejoin the customs union and/ or the single market? Just imagine the outcry from the Conservatives after saying that Labour would have to raise taxes.

Rejoining the customs union or single market isn't that simple.

nanna8

The trouble with the very wealthy is that many of them use tax havens across the world and don’t like parting with any of their money at all. Not all of them of course but a large number. Some actually flee the country ( mine too) and live elsewhere ,USA or wherever. Many pop stars used to do this and I don’t think things have changed.

Tales about the "very wealthy" seem to be used by anybody towards the wealthy end of the spectrum to protect their interests.

Can’t we just rejoin the customs union and/ or the single market? Just imagine the outcry from the Conservatives after saying that Labour would have to raise taxes.