The Budget

JedT posted:

hungryhalibut posted:

Without wishing to be irritating, I’d point out that the annual pension allowance is £40,000, including personal and employer contributions. To get to the £1m with an annual allowance of £10,000 would take 100 years. 

As to where the Chancellor should go next, I’d have restored the fuel duty escalator, put the top rate of tax back to 50p, and removed charitable status from private education as a starter. I’d make council tax on second homes five times the standard rate, and would extend the right to buy to private rentals. I’d nationalise the railways so that the profit remains with the state. And I’d call off Brexit. That lot really would end austerity. 

Sorry HH - missed that

What is your point about the 10k/100 years? Leaving aside the (very) small point that your 100 years calc ignores some help from compounding investment growth - I assume you are agreeing that a 10k allowance is pretty stingy! Basically the move to a 10k allowance said more or less "you earn too much to deserve help with pension saving beyond this token gesture". I think that is quite harsh (if - as I have now said a few times - perhaps necessary under the circumstances).

Without wishing to be irritating, can I gently inquire if any of those tax measures (beyond the fuel escalator) would hit you in the wallet? If not do you take my point that people tend to want good services but not to pay for them themselves? And I don't mean to sound arsey because I'm genuinely interested in this - do you think someone with a 20k stereo genuinely isn't affluent enough to pay a bit more?

That isn't meant as a cheap shot I just mean that it is quite easy to always see that people with more money than you are living in unconscionable affluence without recognising just how decadent ones own lifestyle could appear to people worse off than you. 

I know exactly where I fit in to the income distribution curve and how fortunate that makes me. I'm not whinging about paying a lot of tax - I get a funny slightly perverse pride at seeing the size of my contribution to the common good on my tax return. I do get a bit tired of people thinking that the answer to all our budget pressures is to stick it to people in my income band rather than make any additional contribution themselves after my like for like tax take has already gone up a chunk.

 

 

I personally would be happy to pay more tax. I think the increase in the personal allowance is daft and all it does is reduce the tax base. The changes I’d make to housing would benefit my children rather than me. Changing the tax treatment of private schools would push more towards the state schools, and while it would add to costs it would drive up standards by putting more of the pointy elbowed middle classes into local schools, which would have benefitted my children. Actually I’d abolish private schools; but that’s my utopian dream world and it’s not going to happen. 

This whole debate is really fascinating and of course it’s hard and of course there is no easy answer. The problem is that it’s a debate the government hasn’t got the bottle to deal with - and I don’t just mean this government. Do we want to be like Scandinavia with high tax and great services, or like America with low tax and rubbish services? 

Ravenswood10 posted:

JedT posted:

hungryhalibut posted:

Without wishing to be irritating, I’d point out that the annual pension allowance is £40,000, including personal and employer contributions. To get to the £1m with an annual allowance of £10,000 would take 100 years. 

As to where the Chancellor should go next, I’d have restored the fuel duty escalator, put the top rate of tax back to 50p, and removed charitable status from private education as a starter. I’d make council tax on second homes five times the standard rate, and would extend the right to buy to private rentals. I’d nationalise the railways so that the profit remains with the state. And I’d call off Brexit. That lot really would end austerity. 

Sorry HH - missed that

What is your point about the 10k/100 years? Leaving aside the (very) small point that your 100 years calc ignores some help from compounding investment growth - I assume you are agreeing that a 10k allowance is pretty stingy! Basically the move to a 10k allowance said more or less "you earn too much to deserve help with pension saving beyond this token gesture". I think that is quite harsh (if - as I have now said a few times - perhaps necessary under the circumstances).

Without wishing to be irritating, can I gently inquire if any of those tax measures (beyond the fuel escalator) would hit you in the wallet? If not do you take my point that people tend to want good services but not to pay for them themselves? And I don't mean to sound arsey because I'm genuinely interested in this - do you think someone with a 20k stereo genuinely isn't affluent enough to pay a bit more?

That isn't meant as a cheap shot I just mean that it is quite easy to always see that people with more money than you are living in unconscionable affluence without recognising just how decadent ones own lifestyle could appear to people worse off than you. 

I know exactly where I fit in to the income distribution curve and how fortunate that makes me. I'm not whinging about paying a lot of tax - I get a funny slightly perverse pride at seeing the size of my contribution to the common good on my tax return. I do get a bit tired of people thinking that the answer to all our budget pressures is to stick it to people in my income band rather than make any additional contribution themselves after my like for like tax take has already gone up a chunk.

 

 

Paying what I pay too, I’d just appreciate it if I wasn’t chased for the odd 68 pence outstanding. Still as the old slogan goes ‘Every little helps’. 36 years contributing to the pot with a few more to go methinks???? and that included being made redundant with 25 years service with my payoff hit at 50 %. - that still hurts but think of how many potholes I didn’t fill.

That sounds a little odd, Ravenswood10.  The first £30k of a redundancy pay-off is usually tax-free and the balance taxed at the individual's marginal rate, typically 40% because the redundancy plus earnings to date in the relevant tax year often gets to the higher rate threshold.  Above that, the top rate of income tax has been 45% for some years now so I'm puzzled as to how you got clobbered at 50%. 

hungryhalibut posted:

This whole debate is really fascinating and of course it’s hard and of course there is no easy answer. The problem is that it’s a debate the government hasn’t got the bottle to deal with - and I don’t just mean this government. Do we want to be like Scandinavia with high tax and great services, or like America with low tax and rubbish services? 

Aren’t the Danes said to be the happiest people in the world? And Some good hifi is made in Scandinavia, too - but whether connected to happiness and public services is a matter of conjecture...

Simple matter of too many, chasing too little on a dwindling ball in space - there has to be a limit - we’ve already gone past our expiry date. Sad but true - we can’t all have JC’s pipe dream. Opine on that.

MDS posted:

Ravenswood10 posted:

JedT posted:

hungryhalibut posted:

Without wishing to be irritating, I’d point out that the annual pension allowance is £40,000, including personal and employer contributions. To get to the £1m with an annual allowance of £10,000 would take 100 years. 

As to where the Chancellor should go next, I’d have restored the fuel duty escalator, put the top rate of tax back to 50p, and removed charitable status from private education as a starter. I’d make council tax on second homes five times the standard rate, and would extend the right to buy to private rentals. I’d nationalise the railways so that the profit remains with the state. And I’d call off Brexit. That lot really would end austerity. 

Sorry HH - missed that

What is your point about the 10k/100 years? Leaving aside the (very) small point that your 100 years calc ignores some help from compounding investment growth - I assume you are agreeing that a 10k allowance is pretty stingy! Basically the move to a 10k allowance said more or less "you earn too much to deserve help with pension saving beyond this token gesture". I think that is quite harsh (if - as I have now said a few times - perhaps necessary under the circumstances).

Without wishing to be irritating, can I gently inquire if any of those tax measures (beyond the fuel escalator) would hit you in the wallet? If not do you take my point that people tend to want good services but not to pay for them themselves? And I don't mean to sound arsey because I'm genuinely interested in this - do you think someone with a 20k stereo genuinely isn't affluent enough to pay a bit more?

That isn't meant as a cheap shot I just mean that it is quite easy to always see that people with more money than you are living in unconscionable affluence without recognising just how decadent ones own lifestyle could appear to people worse off than you. 

I know exactly where I fit in to the income distribution curve and how fortunate that makes me. I'm not whinging about paying a lot of tax - I get a funny slightly perverse pride at seeing the size of my contribution to the common good on my tax return. I do get a bit tired of people thinking that the answer to all our budget pressures is to stick it to people in my income band rather than make any additional contribution themselves after my like for like tax take has already gone up a chunk.

 

 

Paying what I pay too, I’d just appreciate it if I wasn’t chased for the odd 68 pence outstanding. Still as the old slogan goes ‘Every little helps’. 36 years contributing to the pot with a few more to go methinks???? and that included being made redundant with 25 years service with my payoff hit at 50 %. - that still hurts but think of how many potholes I didn’t fill.

That sounds a little odd, Ravenswood10.  The first £30k of a redundancy pay-off is usually tax-free and the balance taxed at the individual's marginal rate, typically 40% because the redundancy plus earnings to date in the relevant tax year often gets to the higher rate threshold.  Above that, the top rate of income tax has been 45% for some years now so I'm puzzled as to how you got clobbered at 50%. 

Easy - happened when the 50% rate was there - it went away soon after I was paid off which made it all the more painful!  That was a P45 to behold - not!

hungryhalibut posted:

JedT posted:

hungryhalibut posted:

 

.

 

 

I personally would be happy to pay more tax. I think the increase in the personal allowance is daft and all it does is reduce the tax base. The changes I’d make to housing would benefit my children rather than me. Changing the tax treatment of private schools would push more towards the state schools, and while it would add to costs it would drive up standards by putting more of the pointy elbowed middle classes into local schools, which would have benefitted my children. Actually I’d abolish private schools; but that’s my utopian dream world and it’s not going to happen. 

This whole debate is really fascinating and of course it’s hard and of course there is no easy answer. The problem is that it’s a debate the government hasn’t got the bottle to deal with - and I don’t just mean this government. Do we want to be like Scandinavia with high tax and great services, or like America with low tax and rubbish services? 

Actually I was reading today that the UK's public sector cost is about 37% of GDP and the US is 36% so we're not much different, especially when you play into that we have the publicly funded NHS and the USA doesn't.    Interestingly Germany was at 42%, Italy 48% and France 56%.  So maybe we should be aspiring to be like the other big EU economies? Ah, no. I forgot. We're moving the UK away from the EU and towards sunny uplands are we?   

M

Ravenswood10 posted:

MDS posted:

Ravenswood10 posted:

JedT posted:

hungryhalibut posted:

Without wishing to be irritating, I’d point out that the annual pension allowance is £40,000, including personal and employer contributions. To get to the £1m with an annual allowance of £10,000 would take 100 years. 

As to where the Chancellor should go next, I’d have restored the fuel duty escalator, put the top rate of tax back to 50p, and removed charitable status from private education as a starter. I’d make council tax on second homes five times the standard rate, and would extend the right to buy to private rentals. I’d nationalise the railways so that the profit remains with the state. And I’d call off Brexit. That lot really would end austerity. 

Sorry HH - missed that

What is your point about the 10k/100 years? Leaving aside the (very) small point that your 100 years calc ignores some help from compounding investment growth - I assume you are agreeing that a 10k allowance is pretty stingy! Basically the move to a 10k allowance said more or less "you earn too much to deserve help with pension saving beyond this token gesture". I think that is quite harsh (if - as I have now said a few times - perhaps necessary under the circumstances).

Without wishing to be irritating, can I gently inquire if any of those tax measures (beyond the fuel escalator) would hit you in the wallet? If not do you take my point that people tend to want good services but not to pay for them themselves? And I don't mean to sound arsey because I'm genuinely interested in this - do you think someone with a 20k stereo genuinely isn't affluent enough to pay a bit more?

That isn't meant as a cheap shot I just mean that it is quite easy to always see that people with more money than you are living in unconscionable affluence without recognising just how decadent ones own lifestyle could appear to people worse off than you. 

I know exactly where I fit in to the income distribution curve and how fortunate that makes me. I'm not whinging about paying a lot of tax - I get a funny slightly perverse pride at seeing the size of my contribution to the common good on my tax return. I do get a bit tired of people thinking that the answer to all our budget pressures is to stick it to people in my income band rather than make any additional contribution themselves after my like for like tax take has already gone up a chunk.

 

 

Paying what I pay too, I’d just appreciate it if I wasn’t chased for the odd 68 pence outstanding. Still as the old slogan goes ‘Every little helps’. 36 years contributing to the pot with a few more to go methinks???? and that included being made redundant with 25 years service with my payoff hit at 50 %. - that still hurts but think of how many potholes I didn’t fill.

That sounds a little odd, Ravenswood10.  The first £30k of a redundancy pay-off is usually tax-free and the balance taxed at the individual's marginal rate, typically 40% because the redundancy plus earnings to date in the relevant tax year often gets to the higher rate threshold.  Above that, the top rate of income tax has been 45% for some years now so I'm puzzled as to how you got clobbered at 50%. 

Easy - happened when the 50% rate was there - it went away soon after I was paid off which made it all the more painful!  That was a P45 to behold - not!

Oh, dear. That was unlucky timing, Ravenswood10.  

Innocent Bystander posted:

hungryhalibut posted:

This whole debate is really fascinating and of course it’s hard and of course there is no easy answer. The problem is that it’s a debate the government hasn’t got the bottle to deal with - and I don’t just mean this government. Do we want to be like Scandinavia with high tax and great services, or like America with low tax and rubbish services? 

Aren’t the Danes said to be the happiest people in the world? And Some good hifi is made in Scandinavia, too - but whether connected to happiness and public services is a matter of conjecture...

Perhaps that's down to the lager.........probably 

Spendrups 6X - brain embalming fluid - just the thing for those long dark nights!

But the price of it stops binge drinking...  win:win?

Too true - that level of intoxication deserves a high quality health service - hic????

Innocent Bystander posted:

Jonners posted:

hungryhalibut posted:

If they provided free parking, which services should they cut in order to cover the funding shortfall? Street cleaning? Litter? Environmental Health? 

Isn't this something of a chicken and egg scenario here hungryhalibut? The "High Street" is dying, people are voting with their feet and going to Retail Parks. Less people parking, less car parking collections = less services paid for. How do you propose the trend be bucked?

The glib easy answer is hike the bisiness rates very substantially on the out of town retail parks...

More to the point, though is the likes of Amazon, Starbucks etc (even Tesco outside the UK, I believe) should be required to pay tax in the coutry where the money is made - I don’t know by how much, but that would help a bit, while maybe also redressing the balance of purchase cost helpingbthe high street shops survive, as no doubt at least some of that would be passed on in higher prices to the consumer.

that saud, I am not an economist, and know little about tax.

I reckon it'll be 2% from 2020 for "digital" companies according to what I've read about the Budget so it's a start but it absolutely beats me why these companies aren't being brought to task now and if they were, that'd be a goodly whack for HM's coffers to help us all out. Maybe it requires a global initiative to put a global tax strategy in place to combat the complex instruments these huge companies use to pay the least tax they can.

Hitting the businesses in the Retail Parks with rate rises will just result in them going elsewhere. I'm reminded of a story I heard about 10 years ago when Newbury District Council hit Vodafone with a high rates increase on their operation there. The MD apparently responded quite robustly, not only asking for a redaction but a cut on the rates the company was already paying the Council or he'd take his business elsewhere putting thousands of jobs at risk. As the biggest employer in Newbury at the time (and may still be), the Council had no option but to retreat with their tale between their legs.

Having just returned from work, and now had a good read through this thread....

i am particularly impressed by the fact that despite some obvious political differences....

the moderators Services have not been required 

Jonners posted:

Hitting the businesses in the Retail Parks with rate rises will just result in them going elsewhere. I'm reminded of a story I heard about 10 years ago when Newbury District Council hit Vodafone with a high rates increase on their operation there. The MD apparently responded quite robustly, not only asking for a redaction but a cut on the rates the company was already paying the Council or he'd take his business elsewhere putting thousands of jobs at risk. As the biggest employer in Newbury at the time (and may still be), the Council had no option but to retreat with their tale between their legs.

Surely the thing idps for business rates to be pegged nationally, then that wouldm’t factor in that way. (Agin, probably an over-simplistic suggestion, but something along those lines)

Jonners posted:

Innocent Bystander posted:

Jonners posted:

hungryhalibut posted:

 

 

I reckon it'll be 2% from 2020 for "digital" companies according to what I've read about the Budget so it's a start but it absolutely beats me why these companies aren't being brought to task now and if they were, that'd be a goodly whack for HM's coffers to help us all out. Maybe it requires a global initiative to put a global tax strategy in place to combat the complex instruments these huge companies use to pay the least tax they can.

Hitting the businesses in the Retail Parks with rate rises will just result in them going elsewhere. I'm reminded of a story I heard about 10 years ago when Newbury District Council hit Vodafone with a high rates increase on their operation there. The MD apparently responded quite robustly, not only asking for a redaction but a cut on the rates the company was already paying the Council or he'd take his business elsewhere putting thousands of jobs at risk. As the biggest employer in Newbury at the time (and may still be), the Council had no option but to retreat with their tale between their legs.

That's a nice story but I suspect it's got distorted in translation. The local authority would have had little discretion here.  The rateable value of the premises occupied by Vodafone would have been determined by the Value Office Agency - a national government agency.  The business rates bill for the company would have been calculated by applying to that value a 'multiplier' which would have been set by HMG (typically they vary by size of business).  The local authority has to bill the company and collect the rates. The LA has some discretion to apply some 'reliefs' but these are small beer really. 

All that said, I think your broader point about big business using employment as a stick with governments is valid. 

To be entirely correct, it’s the Valuation Office Agency. Another clever wheeze by central government to make it look like local authorities are the bad guys when it’s Whitehall pulling the strings. 

hungryhalibut posted:

To be entirely correct, it’s the Valuation Office Agency. Another clever wheeze by central government to make it look like local authorities are the bad guys when it’s Whitehall pulling the strings. 

To be fair, that’s  always been the case, its one of the things central government are extremely  good at... deflecting blame 

MDS posted

All that said, I think your broader point about big business using employment as a stick with governments is valid. 

It's an easy card to play and these companies are quite happy to play it which is why I am glad the Chancellor is finally taking a step in the right direction towards getting some money out of them. 

hungryhalibut posted:

Without wishing to be irritating, I’d point out that the annual pension allowance is £40,000, including personal and employer contributions. To get to the £1m with an annual allowance of £10,000 would take 100 years. 

As to where the Chancellor should go next, I’d have restored the fuel duty escalator, put the top rate of tax back to 50p, and removed charitable status from private education as a starter. I’d make council tax on second homes five times the standard rate, and would extend the right to buy to private rentals. I’d nationalise the railways so that the profit remains with the state. And I’d call off Brexit. That lot really would end austerity. 

Please go into politics. You have my vote on all those issues !

SMH posted:

hungryhalibut posted:

Without wishing to be irritating, I’d point out that the annual pension allowance is £40,000, including personal and employer contributions. To get to the £1m with an annual allowance of £10,000 would take 100 years. 

As to where the Chancellor should go next, I’d have restored the fuel duty escalator, put the top rate of tax back to 50p, and removed charitable status from private education as a starter. I’d make council tax on second homes five times the standard rate, and would extend the right to buy to private rentals. I’d nationalise the railways so that the profit remains with the state. And I’d call off Brexit. That lot really would end austerity. 

Please go into politics. You have my vote on all those issues !

HH is in politics as a member of the Labour Party.

As a point of principle though - nobody should ever pay 50% or over on earned income to the state, imho of course.

Ray

Progressive taxation is not as simple as it may seem. Punitive tax rates for the few very wealthy raise less money then small increases for the masses. There does have to be a balance between the moral and the fiscal purpose of taxation; uncomfortable as that may be.

There is considerable debate about the policy of the Govt in 2013/4 when they dropped the rate from 50p to 45p. Interesting articles out there from Institute For Fiscal Studies and FactChecker suggest the effect is hard to really quantify but may not be as clear as you would think. They also show how tax thresholds affect behaviours and consequent revenues.

https://fullfact.org/economy/d...tax-raise-8-billion/

https://www.ifs.org.uk/budgets...t2012jamesbrowne.pdf

Bruce

As I said earlier, I find it almost  immoral for the State to take over half your earnings before you have even got them in your mitt. The only exception would be in the event of or during a major war i.e. such as the Napoleonic which I think was when income tax was first introduced.

thebigfredc posted:

As I said earlier, I find it almost  immoral for the State to take over half your earnings before you have even got them in your mitt. The only exception would be in the event of or during a major war i.e. such as the Napoleonic which I think was when income tax was first introduced.

Conversely I find it immoral to see tax cuts happening (at least for the better off) when there are so many rough sleeping, relying on food banks etc.

my experience from a personal view on what is the appropriate higher rate of tax is as follows.

I am very lucky in being well paid working in the private sector,  in my 50’s, and reaching my earnings peak after 30 something years of work. I pay a lot of tax, entirely appropriate given I am fortunate compared to most. I pay my tax in full, and abhor tax evasion amongst higher earners.

i too was taxed at 50% a few years ago, now the higher rate is 45%. The problem is that when government takes (more than) half of what you earn, the incentive to work harder, earn more, and therefore pay more tax to the state diminishes. Which is a no win situation. What the state does not want is people working hard for 6 months of the tax year, and then taking their foot off the gas, because they reach a point where they are working more for the state than themselves. 

i hope my post is not taken the wrong way, as I appreciate I may attract some abuse as a “whinging higher earner”. I know I am fortunate, but I have used my skills in my chosen area of work to move my career along.

but to me 40 or possibly 45% “feels about right” in terms of maximising the total tax take without running the risk of disincentivising the taxpayer.

I got as high as I could in my chosen line of work 25 years ago, and an real terms my salary has changed little since then, through three changes of employer. I am content with my salary, which I consider to be pretty good even though it is a long way short of today’s 45% trigger without moving out of that line of work. Of course I would love to earn more and think it is sad that science is quite limited in earnings potential, with my own being higher than most - and if I earntbmore I would accept higher tax, though I accept that is easy to say when hypothetical.

As for morality of any given level of tax, that depends on what services that provides, not only those from which my family and I directly benefit, but also the society in which I live, including what might be available in terms of ‘safety net’ should things go bad for me through no fault of my own, and including consideration of the environment and sustainability. I do not inherently peg 50% as too much - though even when talking of 50% that can mean two things, 50% of total earnings or 50% of additional above a given level - and the latter I certainly don’t regard as necessarily unacceptable. 

What is totally immoral is tax evasion, though tax minimisation, through doing things differently in a fully legal manner to me is a different matter entirely - except where that is through loopholes exploitable only by those already extremely well off.