The Budget

wenger2015 posted:

I am not a follower of the Conservatives or Labour or any other party for that matter....

But I must say I have been very impressed by today’s Budget..... finally many key issues being dealt with....  not everything but it’s a good start....

Austerity is not over but at least their is light at the end of the tunnel....

Yep, will appeal to a lot of middle England and traditional Tory voters for sure. More money in my pocket is always welcome, though I suspect it will be easily spent on rising living costs as a result of Brexit. "The Chancellor giveth and the Prime Minister taketh away"....cynical sod that I am.....

wenger2015 posted:

but at least their is light at the end of the tunnel....

Unfortunatley, that's a train.

fatcat posted:

wenger2015 posted:

but at least their is light at the end of the tunnel....

Unfortunatley, that's a train.

Somewhat pessimistic...

As maybe not unexpected, the tax cuts benefit the better off more than the lower end of the spectrum. It may have been better to put more money than he has into critical services like health care and social care now, to speed up their improvement, holding back tax cuts for a couple of years  - especially desirable given current point in time with the risk of Brexit going ahead without a good deal following which the money may dry up very quickly 

Innocent Bystander posted:

As maybe not unexpected, the tax cuts benefit the better off more than the lower end of the spectrum. 

The lower rate tax threshold has just been increased to 12.5k from April 2019..?

I have just been reading Corbyns budget response...... ....absolutely bizarre .....??

Innocent Bystander posted:

As maybe not unexpected, the tax cuts benefit the better off more than the lower end of the spectrum. It may have been better to put more money than he has into critical services like health care and social care now, to speed up their improvement, holding back tax cuts for a couple of years  - especially desirable given current point in time with the risk of Brexit going ahead without a good deal following which the money may dry up very quickly 

"You can't please all the people all the time", though raising the tax thresholds benefits everyone. Good to see the freeze on fuel duty and modest rises on booze, help for first time buyers (which will please young people and the bank of mum and dad), and for councils struggling with long-term care costs. I am a small business owner so I welcome rate cuts. Agreed on healthcare but its easy to throw money at the NHS when after so many years the whole thing needs reform IMHO. I am no Tory voter (or Labour for that matter), but there was a lot for me to like today.

Preparations for the Post Tory Brexit Banana Republic Tax Haven?

Just like the austerity, Hammond's budget is just more manifestations of very selfish Tory ideology.

wenger2015 posted:

Innocent Bystander posted:

As maybe not unexpected, the tax cuts benefit the better off more than the lower end of the spectrum. 

The lower rate tax threshold has just been increased to 12.5k from April 2019..?

Yes up by £650, which benefits everyone earning above that  to the tune of 20% of £130 pa, so yes, the low paid benefit from that.

However the higher rate threshold goes up from £46,350 to £50,000, which benefits people earning more than that by an additional £730, so they will be £830 pa better off.

The higher rate threshold has not really gone up very much for years and the percentage of tax payers caught by this upper band has increased accordingly and now affects millions of workers and can act as a dis-incentive to some.

Going from paying 20% to 40 % on earned income is quite a jump which, when added together with a deduction of 12% for national Insurance, means that someone in a pretty normal job, - and we are not talking Barristers and Rock Stars here - loses over half their earnings before they have even got their hands on it. That can't be right can it?

In months when I put in lots of hours at work, I can get pretty close to the threshold so in some instances rather than doing overtime on a Saturday morning I will lay on the couch and listen to Radio 3's Building a Library instead. 

Ray

More dusty old politics from the crusty old Tory party blah, blah, blah, blah.........

THEBIGFREDC is absolutely right the higher rate threshold should be much higher many of us in the building trade suffer from the same problems work too many hours and you actually end up worse off so it actually prevents quite a large number of working people from moving forward and is in effect a wage cap.

I am struggling with the concept that these tax increases benefit the better off more. In absolute cash terms that is true, but as a percentage is that still true? There is also the issue of higher NI contributions for high earners.

I have not done the maths but I have a feeling that raising the lowest tax threshold is proportionately more valuable to those at the lowest end of the wage spectrum compared to lifting the high threshold for those earning £100k. Which is entitely as it should be in my book.

Bruce

thebigfredc posted:

The higher rate threshold has not really gone up very much for years and the percentage of tax payers caught by this upper band has increased accordingly and now affects millions of workers and can act as a dis-incentive to some.

Going from paying 20% to 40 % on earned income is quite a jump which, when added together with a deduction of 12% for national Insurance, means that someone in a pretty normal job, - and we are not talking Barristers and Rock Stars here - loses over half their earnings before they have even got their hands on it. That can't be right can it?

In months when I put in lots of hours at work, I can get pretty close to the threshold so in some instances rather than doing overtime on a Saturday morning I will lay on the couch and listen to Radio 3's Building a Library instead. 

Ray

Yes, but the answer to that could be more A sliding scale rather than big step into a single higher bracket

Jonners posted:

Innocent Bystander posted:

As maybe not unexpected, the tax cuts benefit the better off more than the lower end of the spectrum. It may have been better to put more money than he has into critical services like health care and social care now, to speed up their improvement, holding back tax cuts for a couple of years  - especially desirable given current point in time with the risk of Brexit going ahead without a good deal following which the money may dry up very quickly 

"You can't please all the people all the time", though raising the tax thresholds benefits everyone. Good to see the freeze on fuel duty and modest rises on booze, help for first time buyers (which will please young people and the bank of mum and dad), and for councils struggling with long-term care costs. I am a small business owner so I welcome rate cuts. Agreed on healthcare but its easy to throw money at the NHS when after so many years the whole thing needs reform IMHO. I am no Tory voter (or Labour for that matter), but there was a lot for me to like today.

Not quite. The lower rate threshold is reduced for earnings above £100k on a sliding scale to nil at about £123k. The view might be they can afford it but we at least need to be accurate in our debate. 

Bruce Woodhouse posted:

I am struggling with the concept that these tax increases benefit the better off more. In absolute cash terms that is true, but as a percentage is that still true? There is also the issue of higher NI contributions for high earners.

I have not done the maths but I have a feeling that raising the lowest tax threshold is proportionately more valuable to those at the lowest end of the wage spectrum compared to lifting the high threshold for those earning £100k. Which is entitely as it should be in my book.

Bruce

Why should those who are better off be made so much more better off in absolute terms than those who are much more limited in their means, struggling far more to afford the luxuries, whether small or big? The better off already are able to afford luxuries and less frugal lifestyles. 

Thinking of this in terms of music (but equally applicable to anything else), t an average price of, say £15, the tax change means someone earning between £12.5k and £50k  would be able to afford eight or nine more albums a year, while someone earning over £50k would be able to buy 55 more albums a year. Why is that the right or better way to improve things, given that the better off person already is in a position to buy more albums than the person earning less, with greater choice over whether they buy more music or spend on something else - why should they be made even better off compared to the poorer person? 

Graham in Sussex posted:

   

 

Not quite. The lower rate threshold is reduced for earnings above £100k on a sliding scale to nil at about £123k. The view might be they can afford it but we at least need to be accurate in our debate. 

I was unaware of that and stand corrected, so those I’ve £123k  only benefit by £730 not £830 as those below £100k (and £13o below £50k). My observation that the tax changes reward the rich more than the poor is unaltered.

Bob the Builder posted:

More dusty old politics from the crusty old Tory party blah, blah, blah, blah.........

THEBIGFREDC is absolutely right the higher rate threshold should be much higher many of us in the building trade suffer from the same problems work too many hours and you actually end up worse off so it actually prevents quite a large number of working people from moving forward and is in effect a wage cap.

Same here. Too many hours. Overtime is paid back to the government but customers need their heating and there’s no enough of me around here so I can’t exactly say no. That’s fair according to the Labour Party. 

I.B.

My post is not clear about what I mean, apologies.

I think we should have a progressive tax system that proportionately increases the tax burden on higher incomes. Personally I would have more steps (to reduce this idea of creating 'wage caps'), and also a higher rate at the top end wherever that was set. I'd almost certainly end up paying more than I do as a result.

My point was more a technical one. Tax rates are about percentages not absolute values. A small change in tax rate proportionately helps the poorest members of society more-which I applaud. The reality is that a reduction in tax of £300 per annum helps someone on minimum wage not just more in proportion but also more in practical terms than £400 rebate for someone on £100k so we should bear that in mind when discussing the current budget with the existing tax system when we talk about who is 'better off' post budget. That assessment is a subtle one in my view.

If we had a truly progressive tax system such discussion may not be as necessary-but we don't, and I suspect we never will.

Bruce

PS Please don't assume we are hurling money at the NHS to solve the problems. We are not, and it won't (at least not alone).

Innocent Bystander posted:

Why should those who are better off be made so much more better off in absolute terms than those who are much more limited in their means, struggling far more to afford the luxuries, whether small or big? The better off already are able to afford luxuries and less frugal lifestyles. 

What does that make us Naim owners then? Hi-end hi-fi would be perceived as a luxury in most peoples' books so I guess we must be gathered under the catch-all of "the better off". 

BTW, my observation does not mean I think the approach to tax is ideal, whether that be the step to 40%, or the step to 20%, and there certainly could be better ways than sudden big steps.

N.B. for those concerned about the 40% effect on trying to earn more, it may seem unfair, but at least you are already earning more than those who don’t reach that threshold and have less to spend on all that they need and want in their lives - and I know people below the 40% threshold who are dedicated and hard working and some of whom put in hours over and above their contractual hours without being paid a penny more, let alone overtime rates, who will never earn much more because that is how their jobs are valued in society. 

Jonners posted:

What does that make us Naim owners then? Hi-end hi-fi would be perceived as a luxury in most peoples' books so I guess we must be gathered under the catch-all of "the better off". 

Yes, I guess in absolute terms we must be better off - but then above a certain income there is a matter of choice on what you spend your money on.  Many many years ago when I bought a flat in Oban I then had the choice of buying furniture for it, or a pair of Naim speakers.  I was quite prepared to sit on the floor.  I don't spend much money on booze or clothes.  And buying Naim gear is an expensive outlay, but generally (apart from upgraditis) that will last for many years.  So if you spend, say, £30,000 on a system (modest in Naim terms but not half bad) and keep that for 20 or 30 years (or more), which is not unheard of, then it's costing you about £1000 pa - or say £3.00 a day.  One (cheap) pint of beer.  I know people who go to the pub most, if not every, night, who would not consider themselves to be well-off.

Bob the Builder posted:

More dusty old politics from the crusty old Tory party blah, blah, blah, blah.........

THEBIGFREDC is absolutely right the higher rate threshold should be much higher many of us in the building trade suffer from the same problems work too many hours and you actually end up worse off so it actually prevents quite a large number of working people from moving forward and is in effect a wage cap.

Help me out here Bob. I used to hear this argument from my staff when asking them to work overtime and didn’t understand it then. If being paid, especially at enhanced rates, it is impossible not to financially better off. Ok, if it tips you into the 40% bracket then you might lose 50% (including NI), but that still leaves you with half of the enhanced rate in your pocket, which won’t actually be far short of the flat hourly rate. So how do you end up worse off by working overtime?

Beachcomber posted:

Yes, I guess in absolute terms we must be better off - but then above a certain income there is a matter of choice on what you spend your money on.  Many many years ago when I bought a flat in Oban I then had the choice of buying furniture for it, or a pair of Naim speakers.  I was quite prepared to sit on the floor.  I don't spend much money on booze or clothes.  And buying Naim gear is an expensive outlay, but generally (apart from upgraditis) that will last for many years.  So if you spend, say, £30,000 on a system (modest in Naim terms but not half bad) and keep that for 20 or 30 years (or more), which is not unheard of, then it's costing you about £1000 pa - or say £3.00 a day.  One (cheap) pint of beer.  I know people who go to the pub most, if not every, night, who would not consider themselves to be well-off.

I "get" what you're saying Beachcomber but it's not really a choice the majority of lower income earners in this country have available to them. You chose a pair of Naim speakers over furniture. The people and families I believe IB was referring to in the post I responded to are probably more concerned about the choice of whether they can eat a hot meal or can afford to clothe their children. 

Maslow's "Hierachy of Needs" is possibly a good model to take a look at to put things into perspective. I don't know exactly which section Maslow would assign hi-fi to (of any calibre), but I'm pretty sure it wouldn't be in the bottom 2 segments or even the 3rd. 

Bob the Builder posted:

More dusty old politics from the crusty old Tory party blah, blah, blah, blah.........

THEBIGFREDC is absolutely right the higher rate threshold should be much higher many of us in the building trade suffer from the same problems work too many hours and you actually end up worse off so it actually prevents quite a large number of working people from moving forward and is in effect a wage cap.

Not quite clear to me on how you work more hours and get paid less.

As an employee, as I get paid more my rate of taxation increases but that only applies to the portion over the threshold- so if I get into the 40% band then it's only that I earn above the threshold that's taxed at 40%, not that below.

Sure, you work more hours and as the tax goes up the money you have left *per hour* goes down but the overall money also goes up.

Of course it could be some factor of being self employed that I miss here.

Stephen packer posted:

Bob the Builder posted:

More dusty old politics from the crusty old Tory party blah, blah, blah, blah.........

THEBIGFREDC is absolutely right the higher rate threshold should be much higher many of us in the building trade suffer from the same problems work too many hours and you actually end up worse off so it actually prevents quite a large number of working people from moving forward and is in effect a wage cap.

Not quite clear to me on how you work more hours and get paid less.

As an employee, as I get paid more my rate of taxation increases but that only applies to the portion over the threshold- so if I get into the 40% band then it's only that I earn above the threshold that's taxed at 40%, not that below.

Sure, you work more hours and as the tax goes up the money you have left *per hour* goes down but the overall money also goes up.

Of course it could be some factor of being self employed that I miss here.

This is right - in 2018 it is not possible to earn more and be worse off in terms of take-home pay as far as I am aware. Hypothetically speaking,  if you and/or your partner are in receipt of any benefits, such as family tax credits, these will be null and void once any "family" income strays into the higher tax bracket.