Surely we must pay more taxes!?

PoliticsNerd: *"I expect you'll nitpick here, but I'm going to ask who exactly you mean by those on middle incomes."
Not much point as I have tried once and received a reply about as pleasant as this quote. However, I did suggest we are looking at the top 1%or possibly the top 5%. I haven't suggested going any further than that but obviously I cannot have the clarity of government. Our suggestions on any of this can only be outlines.*

You have not at any stage attempted to define the "middle", but your passive-aggressive deflection doesn't surprise me.

PoliticsNerd Your quote: "However, those in younger generations that I have spoken to seem to accept it as fact."

Not in my experience.

I have already explained to PN that one only has to earn just over £87k to be within the top 5% of earners. That is not a king’s ransom, though obviously some will think it is. I don’t think she commented on that.

But the highest rate tax is only payable on earnings above that level Barleyfields?

That is simply the salary level which tips someone into the top 5%. The additional income tax rate, which is the highest rate, starts at just over £125k, and of course the personal tax allowance is lost.

growstuff

PoliticsNerd Your quote: "However, those in younger generations that I have spoken to seem to accept it as fact."

Not in my experience.

Can you tell me which post that came from, please.

Barleyfields

That is simply the salary level which tips someone into the top 5%. The additional income tax rate, which is the highest rate, starts at just over £125k, and of course the personal tax allowance is lost.

I know, the point is that tax is graduated based on income at the top end of the income scale, which is where there is capacity without compromising living standards to an unacceptable level.

Barleyfields

I have already explained to PN that one only has to earn just over £87k to be within the top 5% of earners. That is not a king’s ransom, though obviously some will think it is. I don’t think she commented on that.

This is the problem if only 5% have income over £87k there are not enough to gather enough tax, you have to tax middle incomes. To get the same amount from the 5% needs an increase 20 times as much. Or if you target the top 1% it’s 100 times more.

My own view is that income tax is about right, Capital and Company taxation needs raising it’s too good for the rich

We need corporation tax at a relatively low level in order to attract companies to the UK. CGT could be raised further, but it’s a balancing act to avoid losing those who are important job creators but most of whose income takes the form of shares.

David49 Companies are having an increase in taxation from April, it’s called Employers NI.

Corporation tax was increased from 19% to 25% in 2023 for companies with augmented profits over £250,000.

Small profits rate of 19% for augmented profits of under £50,000.

There is a scale for profits in between.

Tax free dividend allowance for 24-25 is £500, then for basic rate tax payers it’s 8.75%, higher rate 33.75% additional rate 39.35%.

SME’s are sitting ducks for the tax man, and collect their dues on the dot, and rightly so.

How about closing the loopholes for the multinationals, cannot see any government having the balls to do that…

Tax free dividend allowance for 24-25 is £500, then for basic rate tax payers it’s 8.75%, higher rate 33.75% additional rate 39.35%.

Is there a compelling reason why dividends, which are income, are not taxed at the 20%, 40% and 45% rate of earned income?

And why no NICs are paid on dividend income?

MaizieD

^Tax free dividend allowance for 24-25 is £500, then for basic rate tax payers it’s 8.75%, higher rate 33.75% additional rate 39.35%.^

Is there a compelling reason why dividends, which are income, are not taxed at the 20%, 40% and 45% rate of earned income?

And why no NICs are paid on dividend income?

No idea MaizieD I do not have any influence over tax and NI laws.

All I do know is that the incentives for people to start up businesses ( using their own money along with the risk of losing it ) and to expand and employ more people has gradually been eroded by successive governments.

GrannyGravy13

MaizieD

Tax free dividend allowance for 24-25 is £500, then for basic rate tax payers it’s 8.75%, higher rate 33.75% additional rate 39.35%.

Is there a compelling reason why dividends, which are income, are not taxed at the 20%, 40% and 45% rate of earned income?

And why no NICs are paid on dividend income?

No idea MaizieD I do not have any influence over tax and NI laws.

All I do know is that the incentives for people to start up businesses ( using their own money along with the risk of losing it ) and to expand and employ more people has gradually been eroded by successive governments.

I don't have a problem with incentives for SMEs. SMEs are the lifeblood of the country. Them and the public sector.

It's the inequitable treatment of the big fellas that bothers me, and of those who derive an income from completely unproductive financial dealings.

MaizieD

GrannyGravy13

MaizieD

Tax free dividend allowance for 24-25 is £500, then for basic rate tax payers it’s 8.75%, higher rate 33.75% additional rate 39.35%.

Is there a compelling reason why dividends, which are income, are not taxed at the 20%, 40% and 45% rate of earned income?

And why no NICs are paid on dividend income?

No idea MaizieD I do not have any influence over tax and NI laws.

All I do know is that the incentives for people to start up businesses ( using their own money along with the risk of losing it ) and to expand and employ more people has gradually been eroded by successive governments.

I don't have a problem with incentives for SMEs. SMEs are the lifeblood of the country. Them and the public sector.

It's the inequitable treatment of the big fellas that bothers me, and of those who derive an income from completely unproductive financial dealings.

I agree with you Maizie. IMO there should be more incentives for SMEs - and I hope they're successful and make loads of money for genuine start ups.

Like you, I think those who inherit wealth and live off the interest that money makes for them should be taxed heavily. Nobody should be born with a natural silver spoon in their mouth.

I'm not sure what can be done about the "big fellas", but it doesn't mean we shouldn't try to do something about them.

PoliticsNerd

growstuff

PoliticsNerd Your quote: "However, those in younger generations that I have spoken to seem to accept it as fact."

Not in my experience.

Can you tell me which post that came from, please.

One of your posts!!!!

growstuff there is a huge difference between being born with a silver spoon in your mouth and having the luxury of living of the interest and being left a few thousand which enables you to pay off your mortgage, or even get on the property ladder.

I am in favour of a sliding scale for tax on inheritance along with an increase in the tax free amount.

I wish that all governments would realise that without SME’s they would see a reduction in their tax collections along with an awful lot more unemployment.

Barleyfields

I have already explained to PN that one only has to earn just over £87k to be within the top 5% of earners. That is not a king’s ransom, though obviously some will think it is. I don’t think she commented on that.

In this discussion we are not just talking about 'earners'. We are talking about two groups, one which gets its income from paid employment and one which gets its income from investments or ownership of capital,( that it, plant and machinery used in the production of profit.)

The top 10% of those who have income from capital owns more than 50% of all wealth, it could be as much as 90% (this is from analysis of a number of countries. It is this top 10% of capital wealth holders which contributes less in taxation.

Taxation on earned income is far less easy to avoid.

I don't disagree with you. That's why I'm not against people who inherit millions being clobbered for tax.

MaizieD

Barleyfields

I have already explained to PN that one only has to earn just over £87k to be within the top 5% of earners. That is not a king’s ransom, though obviously some will think it is. I don’t think she commented on that.

In this discussion we are not just talking about 'earners'. We are talking about two groups, one which gets its income from paid employment and one which gets its income from investments or ownership of capital,( that it, plant and machinery used in the production of profit.)

The top 10% of those who have income from capital owns more than 50% of all wealth, it could be as much as 90% (this is from analysis of a number of countries. It is this top 10% of capital wealth holders which contributes less in taxation.

Taxation on earned income is far less easy to avoid.

Exactly! The difference between "earners" and those who live off interest/rent on capital is being ignored.

I know somebody who inherited two London properties (from childless aunts) when she was in her late 40s. She promptly gave up her job. She was quite a high earner, but she said she would be stupid to carry on working when she was receiving more in rent than she could ever earn. She's spent the last 15 years swanning around.

Her income is far higher than £87k.

In which case she is probably in the 45% bracket and she will pay a chunk of CGT if and when she sells up. If she receives more in rent than she could ever earn she is paying more income tax than she otherwise would. If any of us had had an opportunity to live off an inheritance would we not have done so? I would have jumped at the chance. You sound a tad envious when you say swanning around. If she’s paying her tax and has freed up a job for someone else, what’s the problem?

Nobody should be born with a natural silver spoon in their mouth. I think that is an unfortunate expression, because it sounds pejorative and implies a blanket disapproval.
There are people who inherit a substantial amount, but who still have principles and ethics. In deed, they even raise their own children to be hardworking and productive. The implication is often that the person who inherited does not fully appreciate the value of their advantage, and this is not true.

growstuff

PoliticsNerd

growstuff

PoliticsNerd Your quote: "However, those in younger generations that I have spoken to seem to accept it as fact."

Not in my experience.

Can you tell me which post that came from, please.

One of your posts!!!!

Which one? As far as I remember I had talked to about the implications of wealth inequality, the challenges faced by the middle class, and the potential drawbacks of government infrastructure being lost to those just using it as a crock of gold, to various younger family members (25 to 50s) We all discuss politics. I had mentioned this as a line of thinking I was just starting to unravel and was surprised that they were way ahead and treated it pretty much as fact.

I didn't write that much on here because I write at too great a length as it is. But you chose to pick out one line and go into attack mode. Some people are very sad human beings

escaped

^Nobody should be born with a natural silver spoon in their mouth.^ I think that is an unfortunate expression, because it sounds pejorative and implies a blanket disapproval.
There are people who inherit a substantial amount, but who still have principles and ethics. In deed, they even raise their own children to be hardworking and productive. The implication is often that the person who inherited does not fully appreciate the value of their advantage, and this is not true.

Yes, that is the implication and I very much resent it.

I don't think that people who inherit are unappreciative, or anything else, as a group. Just as I don't think that anyone who believes in a fair tax system and a meritocracy is envious and penniless. Generalisations are lazy and pointless.

And generalisations about people fighting tooth and nail to hang on to their inheritance, or squabbling over keeping their money, are equally lazy and pointless.