Starmer's vision quest

[icowden]

Talking of pre-departure damage, remember the outgoing Labour party in 2010 raising the top rate of income tax in an act of leftie spite? Something that you and I are probably still paying for as the rate never came back down to 40%.

You are struggling to pay an extra 5% tax on income of over £125k a year? Are you yanking our chains?

 

[C R]

You are struggling to pay an extra 5% tax on income of over £125k a year? Are you yanking our chains?

Do you have to ask?

 

[BoldonLad]

You are struggling to pay an extra 5% tax on income of over £125k a year? Are you yanking our chains?

In my experience:

1. People "live up" to their income level, or, even beyond it
2. It is not possible to have "too much" money, there is always some new toy or gadget to acquire

 

[First Aspect]

You are struggling to pay an extra 5% tax on income of over £125k a year? Are you yanking our chains?

He's yanking his own.

 

[First Aspect]

You are struggling to pay an extra 5% tax on income of over £125k a year? Are you yanking our chains?

Depends on the household though doesn't it. Take home, assuming you aren't paying more into pensions is about £6.4k a month. Two higher rate payers adding up to £100k comes to the same. There are also, I am told, various benefits that are lost with any high income in a household that could make hlthe crossover lower than (a + b) = 100.

 

[Psamathe]

One aspect I find a bit frustrating about most, particularly current Government is when they keep blaming things outside their control. There are always things outside your control. You should be planning on the basis that unexpected will happen. Covid, Russia invades Ukraine, Trümp tariffs, US invades Iran, etc..

And they will keep coming eg towards the end of the Covid pandemic scientific experts were saying how there will be more, they are now a significant risk given our "relationship" with nature, not a question of "if" but rather "when" (I listen to several health strategy podcasts and doesn't sound like we're actually doing much to prepare, just "waiting on the outcome of the inquiry").

If your "Plan" is based on everything going well in your ideal world they you can be sure it will fail, likely fail badly.

 

[Pblakeney]

One aspect I find a bit frustrating about most, particularly current Government is when they keep blaming things outside their control. There are always things outside your control. You should be planning on the basis that unexpected will happen. Covid, Russia invades Ukraine, Trümp tariffs, US invades Iran, etc..

And they will keep coming eg towards the end of the Covid pandemic scientific experts were saying how there will be more, they are now a significant risk given our "relationship" with nature, not a question of "if" but rather "when" (I listen to several health strategy podcasts and doesn't sound like we're actually doing much to prepare, just "waiting on the outcome of the inquiry").

If your "Plan" is based on everything going well in your ideal world they you can be sure it will fail, likely fail badly.

I particularly laugh at the flip side. Everything "bad" is outside of our control while everything "good" was down to us.
Prime easy example was inflation post Covid/Ukraine. "Not our fault but didn't we do well to reduce it." No, it was all out of your control.

 

[icowden]

Depends on the household though doesn't it. Take home, assuming you aren't paying more into pensions is about £6.4k a month. Two higher rate payers adding up to £100k comes to the same. There are also, I am told, various benefits that are lost with any high income in a household that could make hlthe crossover lower than (a + b) = 100.

But the 45% band is for income over that. The £6.4k takes into account the 40% band. So for each additional £1000 of income you pay £450 tax instead of £400 tax.

A salary of £140k means that you pay £7.5k on your first £37.7k of income. Then £34.9k on the next £87.4k and £6687 on the next £14860 instead of £5944. That's a difference of £600. So your monthly take home is £7166 instead of £7104.

 

[First Aspect]

But the 45% band is for income over that. The £6.4k takes into account the 40% band. So for each additional £1000 of income you pay £450 tax instead of £400 tax.

A salary of £140k means that you pay £7.5k on your first £37.7k of income. Then £34.9k on the next £87.4k and £6687 on the next £14860 instead of £5944. That's a difference of £600. So your monthly take home is £7166 instead of £7104.

My point was more that £125k might not feel all that much, depending on the context of the household income.

The real labour income tax sting from the Brown era was the personal allowance taper. Marginal rate of 60%, actual cost about £2.5k.

I don't think many people in that income range would consider £2-300 a month to be pocket change.

 

[icowden]

My point was more that £125k might not feel all that much, depending on the context of the household income.

And my point is that 5% extra tax after £125 is pretty negligible. it's the 40% on everything between £45k and £125 that is a bit shoot - but it's placed to make the most money out of those that (arguably) can most afford it.

 

[BoldonLad]

And my point is that 5% extra tax after £125 is pretty negligible. it's the 40% on everything between £45k and £125 that is a bit shoot - but it's placed to make the most money out of those that (arguably) can most afford it.

If an extra 5% is “pretty negligible” why not up the 40% rate to 45%?

 

[Psamathe]

If an extra 5% is “pretty negligible” why not up the 40% rate to 45%?

I think if the Government needs to get more income from Income Tax they should be up-front and honest and increase the rates not to try and mask it by freezing thresholds. Even worse is the way they've frozen thresholds is dragging many already struggling into income tax.

And they broke their manifesto pledge about not putting unp the rates anyway (they increased the rate of income tax on savings from 20% to 22% - that is an income tax increase for specific category of income).

 

[BoldonLad]

I think if the Government needs to get more income from Income Tax they should be up-front and honest and increase the rates not to try and mask it by freezing thresholds. Even worse is the way they've frozen thresholds is dragging many already struggling into income tax.

And they broke their manifesto pledge about not putting unp the rates anyway (they increased the rate of income tax on savings from 20% to 22% - that is an income tax increase for specific category of income).

They could “re-adjust” the burden onto slightly broader shoulders by increasing the personal allowance AND upping the 40% to 45%

 

[First Aspect]

They could “re-adjust” the burden onto slightly broader shoulders by increasing the personal allowance AND upping the 40% to 45%

The imf have recently basically said that raising taxes wont raise any more tax.

I just looked up the Scottish numbers, where just of half the workforce is pence better off, with everyone else lots worse off.

Overall it generates about 80 million a year, which is about 1Bn equivalent across the UK. I think that's probably an over estimate. Its not a lot and I think the negatives elsewhere in the economy would outweigh it.

 

[Psamathe]

The imf have recently basically said that raising taxes wont raise any more tax.

Bit like state pensions. Government get a lot of it back. Pensioners go to supermarket that 20% back through VAT. 80% to supermarket who pays corporation tax, pay NI, pay business rates more back to Gov. And some of what pensioners spend in supermarket goes to suppliers who pay corporation tax, NI, business rates, etc. more back to Gov. And both supermarket and their suppliers employ people who pay income tax, NI, etc. so more back to Gov., etc., etc.

Of each £1 paid out to state pension significant %age gets back to Gov.