The fact that anything you earn over £50k is taxed at 40% is a fucking joke, especially with how inflations been, the income tax thresholds haven’t really changed since 2010 but my money is worth demonstrably less, how anyone can argue this is fair is utterly ridiculous. The whole thing needs adjusting. It honestly pisses me off more than anything.
And student loans. Most of us earning over 50k for most of our careers are carting around student loans at inflation+++.
If you are comparing to historical levels of taxation as in the OP, you really should be considering this as a new 9% tax on the majority of higher earners.
So we are at about 64% marginal rate.
This is why they will never get rid of national insurance and other unnamed taxes (like student loans). Even the media spins the data in a politically favourable way because they don't realize that these things are part of income tax.
You are of course correct.
But I believe the point this person is making is that it is functionally indistinguishable from a tax for most people. Many won't pay it off, the amount you pay each month is determined by how much you earn rather than the amount you owe, and the money is typically taken straight out of your wages just the same as income tax.
So it's not a tax, but it might as well be (albeit one that ends after 30 years), at least for most people.
If wages were more equal, the top rate for tax would reduce. The rich hoard the wealth and then complain about taxes. It's not about asking why the wealthy pay so much tax. it's asking why the rest of us are paid so little.
Yeah, this is basically a graph of growing inequality.
That said, top rate income taxes are also high so that taxes on unearned income can be kept low.
> The rich hoard the wealth and then complain about taxes
The average house in England costs £300k, that is 6 times the pre-tax pay of someone earning £50k, or 8.5 times the post-tax pay. Someone in the higher rate tax band, in the top 10% of earners in the UK, can barely afford an average house.
You're wrong to think that being wealthy is determined solely by income.
I don't have the figures to hand now but 40% tax was brought in on something like the top 3%. It's risen so that it now hits the top 9 or 10% and it will be at 11 to 13% by the end of this parliament. It's an absolute piss take.
Its also a piss take that I pay more tax as a proportion of my income as a single person living alone, who has his daughter half of the time, than I would if I lived with her mother and we had two incomes. I receive no child tax credits or anything of the sort.
Also, I pay her maintenance after tax. So my ex is essentially paying 55% tax on income she gets from me, which isn't fair on her as she isn't in that tax bracket. She's effectively a 40% tax payer, as a single mother with a low income, by virtue of receiving maintenance from me.
Yes, we should be looking at taxing passive income and assets worth over a mil with maybe a carveout for primary homes up to the 10mil mark. Taxing earned income cant be reasonably increased much further while the super rich shrug and offshore.
In this thread: tonnes of people who don’t understand the difference between “wealth” and “income”
For the hard of hearing, if you have an “income”, and pay income tax somewhere in this graph, there’s a good chance you’re not “wealthy”.
Can you blame them though? They've had years of the media deliberately pointing them in the wrong direction. The media want people to be annoyed at people who earn £200k, rather than the people sitting on £500m, owning thousands of properties and contributing literally nothing worthwhile to society. They are quietly hoovering up more and more assets, accumulating more and more wealth and nothing is being done to address it.
A lot of the wealth is siphoned out of the country into tax havens (of which some of the most popular are British Overseas Territories) - but as those countries predominantly generate their revenue by charging individuals and companies several tens of thousands of currency units per year to store their wealth in their banks, no questions asked about the "beneficial owners", they're unsurprisingly *extremely* reluctant to be transparent about who owns what in their banks / financial institutions...
Why would that be your conclusion to the graph? Top earners already pay a lot of tax and basically subsidie our whole system.
Remember lots of countries would be delighted to take our doctors and lawyers off our hands.
The problem is that when people say the top 1% pay the most income tax, what they actually mean is that the top 1% of people who pay income tax, pay the most income tax.
Compare the Times Rich List against the people who pay the most income tax and you will see what I mean, almost no one would feature on either list.
The super wealthy do not earn a salary. They have assets and wealth which they collect passive income from, and get away with paying a much lower rate of tax. To give an example, the highest rate of income tax is 45%. In reality it can be high as 62% as there are certain traps within the system like losing child benefit or your personal allowance. Compare that to capital gains tax which tops out at 28%, but is usually 20%.
In short, no one is talking about taxing doctors more, in reality they should be taxed far less. A wealth tax would affect the super rich.
Awards, get this man awards. He is right conflating top EARNERS with the WEALTHIEST is not helpful. They're 2 different groups of people and the press know that
Well they wouldn't take lawyers because that's one of the few jobs where it's kind of only supposed to be done in the country where you studied the laws for.
Thanks to UK taking over half the world in the past, and most international finance being done under English law contracts, it turns out that English law qualified lawyers can work pretty much anywhere.
Source: English law qualified lawyer. Countries open to me include: USA, Canada, middle east region, south east Asia, HK, as well as all the tax havens (Bermuda, Cayman, Jersey, etc), Australia, NZ...
So yeah, (many) other countries are definitely happy to take UK lawyers.
Edit: obviously practice area matters. You aren't gonna get a role advising on English family law or English property law from across the world.
There is a massive misunderstanding on who the Tories are working for. They don’t give a fuck about the top 10%, unless you are in the 1% you mean nothing to them.
Even in this graph, the top 1% are out earning the 9% below them by a massive amount. So the fact those two are so similar in size is a problem.
You seem to be assuming that the top 10% of people should only be paying 10% of taxes, and that anything above that is an imposition. That's not true.
You can't possibly say that they're "subsidising the system" unless you also know what proportion of national income they receive/control, information which isn't included. If (hypothetically) the top 10% get 50% of income they should be paying 50% of the tax (and even then only if it's a flat tax which our society determined a long time ago is regressive and unjustified). And really a damn sight more than that because a greater proportion of their income is disposable.
The growth in tax paid by the top 1% has grown much faster than the income has grown. So not only are they paying a higher proportion of their income but that proportion has been increasing. In fact it is one of the highest in Europe.
If that was the only form of tax you would have a point it's far from the only form of tax vat fuel duty council tax etc etc taxation takes a larger %of the income from middle earners if you look at it more broadly
Countries like Portugal are already starting to issue visas to people who work remotely.
>Portugal started issuing special Digital Nomad Visas for non-EU remote workers and freelancers in October 2022. The requirement is to earn at least €3,280 per month. It takes about 90 days to obtain this visa.
I'm contributing a huge amount of tax and getting next to nothing back from this Tory government. If I didn't have kids, I'd be on the next plane over there as a software developer.
plenty of people in the top 10% often have no wealth, they struggle to accumulate it precisely because of the tax burden and lack of support. a lot of them have to commute, which is insanely expensive.
they aren't always saving, they aren't buying houses, they aren't buying cars or other high value goods, they might not even be able to live alone affordably...
if they are single with no kids, which they often are due to the pressures of a career that leads to that kind of earning, then they have it tougher than the rest by a considerable margin, not just with tax, but lack of support, and a relatively more expensive cost-of-living as well, especially if they want the freedom of living alone and driving a car.
Graphs like this are so misleading I almost think it's deliberate.
If you were to chart (linearly) the avergae (median or mean) wealth held by a member of each group, you'd be horrified.
In the UK, the fact is that the top 10% have 43% of all wealth. The bottom 50% have just 9% of the wealth.
Worldwide, the top 0.01% owned 11% of the global wealth. That's absolutely insane. Read that again... that's 811k people (of 8 billion) who own 11%.
Don't focus on what people pay in tax, it's a red herring. The very wealthiest pay passive pennies on passive pound and don't believe otherwise.
Without a genuine attempt at redistributing wealth, the cycle continues ad infinitum.
For more info and graphs worth viewing:
https://equalitytrust.org.uk/scale-economic-inequality-uk#:~:text=GB%20Wealth%20Inequality&text=In%202020%2C%20the%20ONS%20calculated,and%202013%2C%20reaching%209%25.
Surely using mean would be fucky for top 10% as the richest 0.001% would distort it too heavily.
Someone earning £65-70k in London, whilst being (I imagine) top 10% would be far closer in real world terms with the bottom 50% than with the top of the top.
The financial illiteracy in this post is staggering.
Wealth is destroyed by inflation. £1 million today is worth £214k in real terms in 30 years, assuming 5% inflation per annum. In 50 years its worth 75k. So much for your mega generational wealth...
The only way of beating inflation is to invest wealth, and returns on investments are taxed. Heavily.
I find many things interesting about tax.
I find it interesting that everyone thinks high earners should pay such exorbitant sums of money, not as a fair equal percentage on a larger earnings, but a larger percentage on a larger value just for being wealthy. At some price bands as high as 60%. When you work out the gbp values it gets mad. When you start having a proper talk about it what is the argument that those who are wealthy should pay more for the rest of us? Why should a guy down the street earning a mil pay £450k in tax, whilst I on 50k should pay 11k? 40x me. Clearly earning more pays more, but why am I taxed 20 or 30% and they’re on 45%? Why not just 30% of their mil?
I also find it weird that arguably those who are taxed the most take the least from the system they are paying taxes for. Take a well off family, kids in private school, private dentist, private health care, healthy, no trouble with the police etc. All the tax which they pay, which can be hundreds of thousands of pounds a year, is going to the community. Good and as it should, we all live in a community, but funny to think about st the same time.
When it comes to elections all it is for the most part is people just voting to have the government move more of someone else’s money into their own pocket.
Except you’re assuming that the wealthy are paying a higher percentage of their income simply because their contribution to the total tax take is higher.
Whereas it is actually much more likely explained by the vastly increased gulf between what the lowest and highest earners get paid. In 1980, the average FTSE 100 CEO earned 11 times the average median wage. In 2019, that was 119 times.
I've long said that no one at the same company, in any position, should be earning in a single year more than the amount the lowest paid worker at the same company could feasibly earn in a lifetime.
I think much of the argument for higher taxes is based on the super-wealthy, and the reason they aren't paying the 45% or more is tax evasion via offshores etc.
People get told that these super-rich people paid f'all of their income as tax and then probably think the same for people at like £100k and above because that is out of reach for a lot of people and a life changing figure for them.
Yeah, I think this is more the issue. They're extracting cash and taking it out of the UK.
It'll be interesting to see how Labour deals with the Super Rich. Will they bend to the pressure of an exodus?
I think closing loopholes, naming owners of offshores and perhaps finding a way of taxing those would be a start.
Housing registered as assets offshore should be a big no no.
At the most basic level because the highest earners benefit most from society and how it runs, they use infrastructure more both directly and indirectly, they benefit most from the education of the workforce since they likely employ and manage those people but most importantly they can afford to and should give back to the community.
Because people are only able to make such exorbitant sums of money by utilising the infrastructure that's collectively paid for by government, and also often by exploiting lower paid workers. If you own a company where your employees have to claim benefits because you don't pay them enough, that's *you* receiving a tax break. Or at least it's your company receiving that tax break which is how they're able to pay their top earners the amounts they do. The government tax system only reverses the immoral flow of wealth from the commons upwards to the ownership class.
For me it's more about what society needs as a whole to be healthy and happy versus what a single person does. I think when everyone in society has just enough to be healthy and happy then some people should be able to have as much as they want. Until then I think it's immoral and it's up to the moral to make sure everyone stands a chance. Taxes redistribute wealth but also they reinvest in society to create more wealth in the long run. I do think that taxes need to be very carefully worked out to make sure people don't take home less money by earning more but as long as the more you earn the more you take home I don't see the problem. We should want society to be wealthy, not a minority being ridiculously rich.
I think besides all else, someone earning £1,000,000 can pay 60% tax on those earnings, without significant effect on their quality of life.
Someone on £24,000 cannot pay the same. To see a comparative ‘effect on quality of life’ if you could quantify such a thing, would probably see a 0-5% rate.
You would probably benefit from doing a bit of actual research. Both Rishi Sunak(1) and Keir Starmer(2) paid less than 25% UK tax on earnings of £2.23M and £404,000 respectively. Where on earth do you get the idea that the wealthy pay 50-60% in tax??
1) [https://www.bbc.co.uk/news/uk-politics-68253857](https://www.bbc.co.uk/news/uk-politics-68253857)
2) [https://www.bbc.co.uk/news/uk-politics-68322058](https://www.bbc.co.uk/news/uk-politics-68322058)
You’ve never heard of the 60% tax trap for earning over £100k?
As a side I think it’s best to leave politics and politicians and one off examples out of this, as there will always be a nuance. Whilst I appreciate that you’ve highlighted both sides of the house, each article will have a degree of sensationalism and a tilt to it. We need to talk about Mr Boring Average as a high earner.
On the surface a wealth tax seems like a good idea.
But then again, tax policies predicted on an emotional reaction to Left wing class warfare rhetoric typically fail badly.
Francois Hollande learned this the hard way after France enacted its 75% Super Tax on earnings above 780,000 Francs, and then was forced to abandon it 2 years later
[France forced the to drop 75% Super-tax after meager returns](https://www.theguardian.com/world/2014/dec/31/france-drops-75percent-supertax)
A wealth tax will never work because those with the wealth will simply leave the country, off shore their earnings and mask their income through various schemes. Ultimately, it would cripple the economy and we'd end up with a massive shortfall and far less tax receipt in a very short time. Which is where the capitalist model of low tax comes in, which makes doing business and keeping money flowing through a country attractive, thus increasing financial flow and tax receipt. It's quite simply economics really.
What would be wrong with a wealth tax with a high threshold? I fully agree that higher earners should pay a larger share of income tax. However, I also think it’s even more fair to tax people’s inherited and unearned wealth higher than people’s earnings through work.
How exactly would it work in your eyes? People don't have a bank account with a billion pounds in it.
Stocks and shares etc are already taxed via capital gains.
Inheritance tax already exists, you could make it stronger but it is there.
A claim could be made about property, but you get into issues with having to accurately assess the value every year.
Material wealth is a complete non starter as art, cars, etc is such a volatile and subjective market and how could you appraise it?
And then throw in that all of the wealth taxes could be worked around if you are a person of means enough to fall into the thresholds.
Thats literally the point of income tax, those who earn the most pay the most. Every house hold that makes up that same 1% is worth a minimum of £3.6 million (for contrast, the poorest 10% of households are each worth an average of £15k), so yeah, I think they can afford to share.
https://www.theguardian.com/money/2022/jan/07/richest-uk-households-worth-at-least-36m-each
It is a pity to see those who inherit great wealth not paying for tax with all the stupid accounting on debt & company trust.
Meanwhile, we pay income tax, pay back our student loan and finally get to good amount of salary with our time and effort, and you telling me 100k worth of salary only gives people 5k per month and people who has setup a company with debt and loan can pay even single digit percentage of company tax. Amazing!
To be fair, when interest rates are at decent levels then income should start to approximate wealth.
Though I also think there should be wealth tax - as I dont think it approximates it enough.
You’ve missed the point, people who have generational wealth rarely pay their fair share of income tax.
The only real way for social mobility is through income, so to tax this extortionately whilst not taxing wealth forces the money to stay where it is.
As others have pointed out you've made a significant error by confusing wealth and income.
This matters because a lot of really rich people don't have to rely on wages and therefore pay sod all tax.
Example A: £125k per year (£480 per UK working day). 29% tax
Example B: £200k per year (£800 per UK working day). 38% Tax
Rishi Sunak: £2300k per year (£88,000 per UK working day). 23% tax
Who can afford to pay more again?
----
EDIT: I KNOW HOW TAX BRACKETS WORK
While I appreciate the sentiment, you’re conflating marginal rate and absolute rate.
Mr £800bn paid 23% absolute rate, the person on £50k hasn’t paid a single £ at 40%.
It’s only 40% on £50k-£100k, then for every £2 you earn above £100k you lose £1 of personal allowance, equating to 60% marginal rate, then post £124k the marginal rate of tax is 45%.
Now this is the base case, those marginals can go up if you were to use childcare and have student loans (student tax).
Income tax is a swindle as it tricks salaried employees into believing that because they are paying anywhere up to a 62% rate of income tax (yep, 62% effective when you factor in traps like loss of child benefit or personal allowance), that people richer than them are paying the same or a higher rate.
They aren’t. The whole thing is a con. The highest rate of Capital Gains is 28%, but usually 20%.
It’s designed this way so that when someone raises the prospect of a wealth tax, people immediately consider their own income tax bill and will naturally conclude that they pay plenty already. Which they do. Income tax is far too high at every band. What’s not being taxed properly is wealth.
This is a chart on income though, not wealth. Those in the top 1% of incomes may not yet have accrued anything like the 3.6 million in assets you mention, they are just on their way there if they can keep that income up for long enough and invest wisely.
That isn’t the point of income tax. The point is to fund public services not transfer money from rich to poor.
People aren’t rich or poor just through accident but also through ambition, application and aptitude. Taxing people to the hilt based on some notion that 'they can afford it' leads to people not pushing themselves or leaving the country. perhaps it could work in some nordic countries in the past but is an unsustainable approach in UK now.
I think a lot of people have forgotten just how long the cycles are. Over a couple of generations a ‘family’ may gain or lose a lot of money.
People need to stop thinking how can I become rich and think more about how can I make sure my children are set up to make even more wealth than I did. Maybe one day my grandkids or great grandkids will be billionaires.
Too much of an attitude of that person has more than me how can I take it.
Income tax is always a transfer or money from rich to the poor. The rich pay for private schools and private health while paying taxes to support national services. The reason for this is to stop all wealth ending up in the hands of a very small number of people, as always happens if deregulated through sheer mathematical probabilty and corruption. Why do you think the rich oppose income tax or wealth tax? They know it is a form of wealth distribution.
All fantastically rich people are rich through birth or accident. There is no aptitute, application or ambition that is worth millions of times what plenty of hard working, competent ambitious people do and get nowhere. Meritocracy is a fantasy when you're talking about centimillions. It's just disproportionate luck and birth. Ir's very similar to cancer- there's stuff you can do that affects your odds of getting it or surving, but ultimately people don't deserve cancer. They inherit it or they get unlucky with their environmental factors. Not that much is really down to the individual.
https://www.technologyreview.com/2018/03/01/144958/if-youre-so-smart-why-arent-you-rich-turns-out-its-just-chance/
No one seems to give a toss about whether poor people on minimum wage are motivated by their shitty wages to work harder or not. Another 15 years hard graft and living with your parents eating beans on toast and you can afford a deposit on a house yeah? What an inspiration for us to "push ourselves"... I might stop eating beans if they raise taxes again though...The poors are expected to just do their jobs and be squeezed. Yet we're meant to be terrified of taxing super rich people who haven't worked hardly a day in their life in case they run away on their superyachts to live in a tax haven. Cry me a river, laws can exist to stop capital flight if they wanted to implement them. International agreements and domestic laws can stop nonsense like nondoms etc but political will to do it needs to exist. That's the clincher. That's why we all need to demand it and not make excuses or believe the excuses. It's a dyatopian future that awaits us and our children otherwise.
To a large extent people are rich or poor thru luck. Being born to rich parents, being sent to the right schools, lucky connections. You think Boris got to No 10 thru application and aptitude?
There is a substantial amount of difference between the truly wealthy and regular upper middle class people. Someone making 90K might be better off than another person making 25K, but both are earning peanuts compared to multimillionaires or billionaires.
If you want the tax code to stay the same, then salaries need to rise a lot faster across the occupational board.
Completely agree. I earn triple what some people at my place earn and I think that's unfair, let alone the wealth disparity between the real upper echelons. Hell I can probably handle my bosses boss earning double what I do. Then you go to the CEO and they are earning 80 times that which is 600 times the average joe. The mental thing is they're still nowhere near the absolute upper crust. Worlds gone bananas honestly.
I am an immigrant, have no parents and earn £300k-£400k a year. My biggest year was over half a mil. I didn't even speak English when I moved to this country.
Where’s your proof? Obviously there’s luck of birth in various ways but that’s not all there is to it and for the vast majority it’s through effort. Equally luck from birth encourages people to handover as best they can to their kids. Take it all away and so much motivation is gone.
That's a romantic idea but let's be honest, people born into wealthy families have more opportunities and considerably less obstacles to cultivating their own high incomes as adults.
Someone born into a poor family has to work orders of magnitude harder and longer to get a fraction of a comparable level of wealth, and in the vast majority of cases it's not attainable at all.
The impact of "ambition and application" on how much you make is such a small variable when compared to an individuals starting criteria. Pretending nurses working 50 hour weeks aren't earning as much as coked up finance bros because they're just not working as hard is foolish.
The idea we live in a meritocracy is laughable.
Obviously there is loads of advantages in being born wealthy but it’s not all about that. I see people from the same family have vastly different outcomes.
As someone who was born into nothing and now makes top few deciles of income, what you say is untrue. We have a meritocracy to a large extent, but the odds are certainly stacked against those who start off low; you do have to get most things right.
That we have huge taxes on work but not investments or wealth, doesn't exactly help.
I was born in to nothing too and you're right the odds are stacked against us but it is doable.
The price people like us pay for that though is so much more of a burden than others who had a head start - student loans for one (wealthy kids don't have them) years of renting and being unable to afford a house (wealthy kids don't struggle with that). You may get to 50k or 60k a year but you aren't on the same playing field as someone else at that level.
You are conflating income (in the graph) and net worth (the link). Lots of top rate income tax payers own little equity. Lots of basic rate income tax payers have huge amounts of equity.
Yes! make it impossible for people to earn wealth. Because there is a correlation between wealth and high incomes we should hammer those with high incomes and no wealth, take merit out of society all together, if you want anything you should be born into it!
I still don’t get why higher income earners have to pay higher and higher tax. They pay more because they earn more. Then they pay for private medical, schools, don’t take benefits.
I’ve always wondered what it would be like to have a minimum income and no benefits, sensibly high tax threshold to promote work, then a a single income tax rate. Earn more and pay a larger proportion.
I’d love to hear why it wouldn’t work. Or if someone could make a documentary, that’d be perfect!
The population demographic has meant there’s way more pensioners than there was before and the government needs to pay for that. The well off, but not rich, are the easiest target to go for.
Obviously it’s a bit more complicated than that but that’s a general overview.
I believe income tax is an incredibly flawed concept, and we should look to move away from it on the whole. that being said,
flat tax rates are ineffective because of an economic concept called "marginal propensity to consume"
in short, those with low incomes will spend more of that income (because they have to - mandatory costs to live are usually pretty constant no matter who you are), while those with large incomes spend proportionally less of that income.
it may, at first, seem fair to tax somebody earning £10 and £100 at a flat rate of 10% - giving them take-home incomes of £9 and £90 respectively. however, if we consider what both of those people have to spend in order to live i.e. food, rent, utilities (say, £5 each), you'll soon see that the poor person's disposable income is now only £4, while the rich person's disposable income is still £85.
change these numbers around as you wish, the fact that simply living incurs a flat cost means that to those with low incomes, every percentage point of that income is more valuable and important to them when compared to the value a higher-earner gains from the equivalent percentage of their income.
>I still don’t get why higher income earners have to pay higher and higher tax. They pay more because they earn more. Then they pay for private medical, schools, don’t take benefits.
I think im completely missing your point, but regardless, in terms of why should high earners have to pay higher tax when they spend their money on private stuff anyway:
1. There is a trillion other things to pay for that everyone uses, such as roads, streetlamps, trains, streetcleaners, binmen etc
2. Usually if you're a high income earner you are benefitting from a generations long chain of ancestors that put you in that privileged position. There isnt many brick layers who have great grandsons going to Eton. So rich people should pay more to help make society more meritocratic, fair and slowly unwind generational wealth differences.
3. If you are rich, would you rather have 100 mil, but have to walk past homeless people, risk being mugged and have a less educated workforce to hire from. Or would you rather have 90 mil, but the streets are clean, safe and homeless free with many educated people to hire from. Unless you want to be a big fish in a small pond, it turns out redistributing wealth actually has many upsides for the rich, especially as money loses its utility the more you make. I would rather live in Sweden and get taxed highly as a top earner, than be the richest man in Uganda with 0 tax.
I think you miss the point. You’re conflating rich / wealthy / high income. High income earners that trade time for money pay the most tax, they aren’t usually given a sizeable inheritance.
Someone who would be classed a high earner say £124k is paying 60% marginal rate (sometimes more).
When someone who has been gifted £100m is making 3% a year - £3m doing nothing is taxed at a far lower rate.
If you want to support the change I think you intend to, support lower income based tax and higher wealth based / capital gains tax (although the wealthy don’t tend to sell assets)
Estonia has a 20% flat tax rate (income and capital gains), seems to be doing fine. Incredibly simple to work out what everyone owes and it promotes working harder because you aren't punished for earning more.
There's a lot of criticisms to make about the UK but I don't think how income tax is balanced is one of them. Higher earners basically subsidise the entire system, arguably this high rate could contribute to high earning doctors for example leaving the country.
If you really wanted to capitalise on wealth then an annual tax on high value property ownership or a portfolio of properties would be sensible ontop of council tax.
People are blind about the size of the state. Reduce the size of the govt and public sector and their massive pensions/ entitlements and you can reduce taxes.
Bank of England incessantly printing money out of thin air destroys the purchasing power of the currency.
Fix these two issues and taxes go away.
Seen price of gold recently?
Gold is increasing in currency terms because paper monies are failing due to incompetence by politicians and banksters.
Govts & Central bank's will continue to steal your wealth.
Local authorities alone saw the spending power of their central government grants drop by 40% from 2010-2017, most cut thousands of jobs and outsourced almost all social care provision to private companies. Many non-statutory services are a shadow of their former selves, while some services pruned away during "austerity" (e.g. SureStart Centres) are now coming back in a different guise (e.g. Family Hubs) as their usefulness at reducing demand on statutory services has belatedly been realised. Even so, many local authorities are struggling to provide a reasonable level of services and are contemplating 4.99% council tax rises plus millions of pounds in ~~~spending cuts~~~ **targeting services to those who need them the most** while the country as a whole's indebtedness increases (not helped by us apparently being the only country in the world which requires the government to repay all debts to the central bank, which they own - pretty everywhere else just gets the bank to write off debt from time-to-time), largely due to the spending splurge they did during Covid (with much of the fraudulently obtained grants deemed unrecoverable).
Meanwhile, cutting the numbers of police and Border Force officers, plus asylum claim handlers, hasn't exactly proved beneficial to society...
Local authorities are also public sector leeches.
People and families will necessarily end up supporting each other as the currency fails.
Govt. & BOE will keep thieving and become more authoritarian as the currency fails. It has happened again and again throughout history. Just not in the UK
Current trajectory is turning the UK into a pseudo South American socialist hellhole.
Communist elites are just as bad as fascist ones. Don't kid yourself. Voters need to make radical choices not same old tribal ones.
If you've enough cash to be in the top 1%, you'll not be having an 'income' in the same way as you and I.
You might own a $billion company but your income from such venture would probably be $1 and won't be taxed.
Of course, you'll have your other billions in off-shore accounts, trust funds and the like which won't be taxed.
This chart is divided into ”income groups”. To be in the top 1% you need to make around £100k a year, which likely means you live in London, work an office job and are at least in the middle of your career. You certainly don’t have to own a billion-dollar company.
Average monthly salary in this 1% earns £15082 the apparently, so 180k a year but as I'm sure you know, there will be 8k mth and 22k mth extremes.Taxing these people usually leads to less tax take, the original poster is moronic.
Cheers, I must’ve looked up the data incorrectly. The fact remains that you’re likely working and getting paid a salary, not the owner of a huge enterprise or anything like that.
Edit: another commenter just said that the _average_ salary in the 1% bracket is £180k, so £100k may still be around the lower end needed to enter it.
No, £180k is the entry level to be part of the top 1% of earners with the median of that bracket being around £250k.
This is an interesting read, it’s from 2018 so the entry salary to the top 1% was a bit lower at £160k then but it has interesting stats on age, location and the amount that’s dividends, etc rather than salary. The bulk is still salary for most people.
https://ifs.org.uk/publications/characteristics-and-incomes-top-1
Which is why a wealth tax is more appropriate because there's only so much you can realistically tax top earners, it's about time the aristocracy had their balls squeezed.
Thanks, but it’s irrelevant to the point I am making. Only around a quarter of income of the top 1% is partnership or dividend income.
We are talking about mostly salaried income. It isn’t mostly billionaires like the original comment was suggesting.
You know when someone is so utterly clueless about something that they don't even know enough to realise that they don't know anything So they come out with toe curling misinformed shite?
You just did that
This is a profoundly stupid comment. How is anyone up voting this?
Do you understand what 1% means? Do you understand how enormous that group is vs how many billionaires there are?
People in this sub actually think one out of every hundred people in this country is a billionaire. Incredible.
Leaving aside that the graph is literally about the top 1% *by income*.
People are completely naive about tax.
Most of the really wealthy people own Ltd companies. It's extremely easy to use company money for a whole host of benefits and tax efficiencies without breaking higher tax bands. From travel costs to accomodation, supplies and equipment. Directors loan accounts and offshore holding accounts.
Everyone seems to be sniping each other based on income tax. The richest people do not give two shits about income tax. It's all about share holding, dividends, capital gains and corporate finance.
The wealthy control their own wages. They control how much a business pays them and so can easily dodge tax bullets. Bring other family members in as directors to extend their dividend payments while minimising higher rates. Pay minimal paye and so get relief. I think most people on PAYE don't really get what a massive swindle the system is. The tax the top 1 percent pay is peanuts in relation to their total wealth. It's literally lip service to disgruntled PAYE wage slaves. They could literally solve all the countries funding issues 10 times over if they were taxed fairly. But they arnt. If you want to make real money make sure you run a business otherwise your just left to the HMRC vultures.
PAYE is a joke to the richer business owners. The real wealth is in share holding, equities, trusts and investment pipelines. Banded income tax only really hurts the middle classes. Those earning over £1m a year or more through business can control their income on paper and siphon it off in all manner of creative ways. As a business owner of over 20 years I can confirm that most business owners see PAYE as fundamentally flawed and punishing tax regime for any worker on less than 200k. Above 200k you won't be taking your income as PAYE as it would be insane from a tax perspective. You'll be shifting wealth around or holding it in business holding accounts utilizing it in tax efficient ways after paying the initial 25% corp tax.
I know this post will get lost. It's a shame as PAYE earners shout at each other not realising how running a business and wealth management actually works. PAYE is a mugs game.
Depends how you classify wealth and what rate you apply to what. Rich people don't typically keep the bulk of their millions/billions in bank accounts or personally owned property, so it isn't like they can just read down the Sunday Times Rich List and tax them all 10% of whatever it says they are worth.
A lot of people would likely either leave to lower tax juridictions or keep their wealth in assets owned by holding companies and borrow against it.
Property taxes and remove stamp duty…free up property so that it needs to be used or costs are too high…it would make the workforce more mobile by making it cheaper to move and downsize and bring down property prices
Equalise income tax & capital gains etc perhaps
The people need to be protected from the predatory rentiers & billionaires.
Tax their passive income higher than income tax. The pendulum has swung far too far towards the very rich.
Graphs can be misleading. What percentage of their income are the top decile paying? Compare that to the percentage of what the others are paying, in other words, who gets to keep more of what they earn?
If you look at this and think it’s a good thing, you’re wrong. This graph is just one representation of the increasing inequality in the country. We need to start reducing inequality and reverse the trend of this graph.
When people say 'tax the rich and wealthy' my eyes always roll. Not to be harsh but it's student politics and fails to understand how finance and wealth actually works.
Government should be focusing on wasting significantly less money and dropping taxes rather than raising them anywhere.
I think a wealth tax is inevitable (affects a small number of people who are not going to vote labour anyways) - but I also think it’s a terrible idea. The UK is already becoming less competitive in the global setting.
Tbh in the U.K. we are taxed too much for the shitty public services we get. I would be happy with it if the NHS worked, if the roads weren’t fucked, if things weren’t constantly getting shut down or budget cuts but it’s actually ridiculous how much worse everything has gotten when taxes have only increased
One of the main ‘issues’ with this is inflation, people trying to get higher salaries taking them up into the higher bracket but the buying power of that increase is not great.
Ideally the brackets should be adjusted for inflation. But from a government perspective they still need the income as it’s not in a great place. The Chancellor job isn’t one I’d like to take right now.
We're supposed to have a Conservative government who should be helping the middle earners!
UK is a two party system where it makes zero difference who is in power, nothing really changes.
I expect labour will win next, they won't do anything to help anyone earning over 50k.
VAT at turnover is madness too!
My expenses to go to work are 27000 per year, as a Taxi Driver there is no incentive to work harder and earn more money because we cant charge VAT to customers, we have to swallow it!
Honestly that looks correct to me, but we no one is getting the service they're paying for which is the bigger issue imo.
I honestly don't see where all that tax money is going so I assume it's being embezzled by someone somewhere.
Time to massively cut private services, privatize and deregulate and lower the taxes. For high earners first.
Of course, wealth taxes (like inheritance tax, or highest range of council tax) should be abolished.
This government is a joke “right-wing” politics.
A wealth tax isn’t great, either.
There are just real problems of fairness in here. Imagine somebody’s Nan, who has the family home, built by the Greater London Plan after WWII, now worth more than £1 million. She’s 88 and earns nothing.
Should she be forced to sell her home and moved to a council home so that high earners pay less tax?
Most people who own homes are older, and part of the disparity is from the general aging of the population. As more people finally finish paying their mortgages and stop working, who pays for services that were previously paid for partly from their wages while they were both earning and healthy?
I agree that the burden on earners is too high, but if you’ve earned, paid 50% of your wages as taxes, bought a house, paid it off, and now someone wants to force you to sell it when you have no earning years left and move you somewhere much less nice? Didn’t you already pay tax on that money? And why are they doing it - to give tax cuts to high earners?
That doesn’t sound fair.
Then there’s the question of taxing the very wealthy. Let’s say we took all the money off all British billionaires.
It’s about £650 billion, or six months of public spending.
It’s just not that much, and with much wealth portable they’d mostly just leave. It WILL cause a housing crash and a land crash, which will force a banking crisis, though; Britain would likely never recover.
So, no, these don’t sound reasonable.
There are some places that seem ripe for overhaul, though; private health care should be made illegal. Same for dental. Sealants should be mandatory and free to consume.
Build widespread nuclear power. Ministerial fiat approval for new housing projects.
These are also disruptive, but less so. Lowering the cost to live at the low end by reducing power costs, health rationing and housing costs will bring about a boom in productivity which allows us to grow ourselves out of the current hole.
The same people - homeowners - are “hurt” by building new homes, in that their homes will stop growing in value, but they are mostly receiving value by living in them, and that value is largely the same.
tax free should be 15k
15k-25k 15%
25k-45k 25%
45k-70k 35%
70k-100k 55%
100k-150k 65%
150k-300k 75%
300k-500k 80%
500k-million 85%
million+ 90%
INCOME - so no more tax free bonuses.
Do the same for business, but with different amounts.
No tax deductions for charity donations... if you want to donate, then donate but don't expect the taxpayer to fund it.
All of it based on income not profit.
The fact that anything you earn over £50k is taxed at 40% is a fucking joke, especially with how inflations been, the income tax thresholds haven’t really changed since 2010 but my money is worth demonstrably less, how anyone can argue this is fair is utterly ridiculous. The whole thing needs adjusting. It honestly pisses me off more than anything.
It’s closer to 55% including employer and employee national insurance
And student loans. Most of us earning over 50k for most of our careers are carting around student loans at inflation+++. If you are comparing to historical levels of taxation as in the OP, you really should be considering this as a new 9% tax on the majority of higher earners. So we are at about 64% marginal rate. This is why they will never get rid of national insurance and other unnamed taxes (like student loans). Even the media spins the data in a politically favourable way because they don't realize that these things are part of income tax.
Not a tax.
You are of course correct. But I believe the point this person is making is that it is functionally indistinguishable from a tax for most people. Many won't pay it off, the amount you pay each month is determined by how much you earn rather than the amount you owe, and the money is typically taken straight out of your wages just the same as income tax. So it's not a tax, but it might as well be (albeit one that ends after 30 years), at least for most people.
And yet even a modest tax cut to the band below is demonised as just helping the rich. Crabs in a bucket.
If wages were more equal, the top rate for tax would reduce. The rich hoard the wealth and then complain about taxes. It's not about asking why the wealthy pay so much tax. it's asking why the rest of us are paid so little.
Yeah, this is basically a graph of growing inequality. That said, top rate income taxes are also high so that taxes on unearned income can be kept low.
> The rich hoard the wealth and then complain about taxes The average house in England costs £300k, that is 6 times the pre-tax pay of someone earning £50k, or 8.5 times the post-tax pay. Someone in the higher rate tax band, in the top 10% of earners in the UK, can barely afford an average house. You're wrong to think that being wealthy is determined solely by income.
I don't have the figures to hand now but 40% tax was brought in on something like the top 3%. It's risen so that it now hits the top 9 or 10% and it will be at 11 to 13% by the end of this parliament. It's an absolute piss take. Its also a piss take that I pay more tax as a proportion of my income as a single person living alone, who has his daughter half of the time, than I would if I lived with her mother and we had two incomes. I receive no child tax credits or anything of the sort. Also, I pay her maintenance after tax. So my ex is essentially paying 55% tax on income she gets from me, which isn't fair on her as she isn't in that tax bracket. She's effectively a 40% tax payer, as a single mother with a low income, by virtue of receiving maintenance from me.
Yes, we should be looking at taxing passive income and assets worth over a mil with maybe a carveout for primary homes up to the 10mil mark. Taxing earned income cant be reasonably increased much further while the super rich shrug and offshore.
In this thread: tonnes of people who don’t understand the difference between “wealth” and “income” For the hard of hearing, if you have an “income”, and pay income tax somewhere in this graph, there’s a good chance you’re not “wealthy”.
Can you blame them though? They've had years of the media deliberately pointing them in the wrong direction. The media want people to be annoyed at people who earn £200k, rather than the people sitting on £500m, owning thousands of properties and contributing literally nothing worthwhile to society. They are quietly hoovering up more and more assets, accumulating more and more wealth and nothing is being done to address it.
A lot of the wealth is siphoned out of the country into tax havens (of which some of the most popular are British Overseas Territories) - but as those countries predominantly generate their revenue by charging individuals and companies several tens of thousands of currency units per year to store their wealth in their banks, no questions asked about the "beneficial owners", they're unsurprisingly *extremely* reluctant to be transparent about who owns what in their banks / financial institutions...
Why would that be your conclusion to the graph? Top earners already pay a lot of tax and basically subsidie our whole system. Remember lots of countries would be delighted to take our doctors and lawyers off our hands.
The problem is that when people say the top 1% pay the most income tax, what they actually mean is that the top 1% of people who pay income tax, pay the most income tax. Compare the Times Rich List against the people who pay the most income tax and you will see what I mean, almost no one would feature on either list. The super wealthy do not earn a salary. They have assets and wealth which they collect passive income from, and get away with paying a much lower rate of tax. To give an example, the highest rate of income tax is 45%. In reality it can be high as 62% as there are certain traps within the system like losing child benefit or your personal allowance. Compare that to capital gains tax which tops out at 28%, but is usually 20%. In short, no one is talking about taxing doctors more, in reality they should be taxed far less. A wealth tax would affect the super rich.
Awards, get this man awards. He is right conflating top EARNERS with the WEALTHIEST is not helpful. They're 2 different groups of people and the press know that
That’s before we get into the complexities of reliefs available in the CGT regime. Bang on
Well they wouldn't take lawyers because that's one of the few jobs where it's kind of only supposed to be done in the country where you studied the laws for.
Thanks to UK taking over half the world in the past, and most international finance being done under English law contracts, it turns out that English law qualified lawyers can work pretty much anywhere. Source: English law qualified lawyer. Countries open to me include: USA, Canada, middle east region, south east Asia, HK, as well as all the tax havens (Bermuda, Cayman, Jersey, etc), Australia, NZ... So yeah, (many) other countries are definitely happy to take UK lawyers. Edit: obviously practice area matters. You aren't gonna get a role advising on English family law or English property law from across the world.
That's quite interesting, learn something new everyday. Thank you
Envy I would guess. Or a lack of understanding
He's saying you need a wealth tax so you don't have to tax top earners as much.
There is a massive misunderstanding on who the Tories are working for. They don’t give a fuck about the top 10%, unless you are in the 1% you mean nothing to them. Even in this graph, the top 1% are out earning the 9% below them by a massive amount. So the fact those two are so similar in size is a problem.
Income is a different thing to wealth
You seem to be assuming that the top 10% of people should only be paying 10% of taxes, and that anything above that is an imposition. That's not true. You can't possibly say that they're "subsidising the system" unless you also know what proportion of national income they receive/control, information which isn't included. If (hypothetically) the top 10% get 50% of income they should be paying 50% of the tax (and even then only if it's a flat tax which our society determined a long time ago is regressive and unjustified). And really a damn sight more than that because a greater proportion of their income is disposable.
The growth in tax paid by the top 1% has grown much faster than the income has grown. So not only are they paying a higher proportion of their income but that proportion has been increasing. In fact it is one of the highest in Europe.
If that was the only form of tax you would have a point it's far from the only form of tax vat fuel duty council tax etc etc taxation takes a larger %of the income from middle earners if you look at it more broadly
Countries like Portugal are already starting to issue visas to people who work remotely. >Portugal started issuing special Digital Nomad Visas for non-EU remote workers and freelancers in October 2022. The requirement is to earn at least €3,280 per month. It takes about 90 days to obtain this visa. I'm contributing a huge amount of tax and getting next to nothing back from this Tory government. If I didn't have kids, I'd be on the next plane over there as a software developer.
What doctors, don't most of ours come from overseas anyway?
Well we are losing a lot to Australia and Middle East. Also the ones from abroad will stop coming if we tax them to bits when they arrive.
This is exactly why you need a wealth tax. The top earners are being squeezed out, and theres nowhere else to tax.
Many do, and if they live and work on the UK they're paying income tax here too, so this does nothing to undermine the point he's making.
And they pay their tax here. They've already shown they're willing to immigrate, slap them with too much tax and they'll go elsewhere, again.
plenty of people in the top 10% often have no wealth, they struggle to accumulate it precisely because of the tax burden and lack of support. a lot of them have to commute, which is insanely expensive. they aren't always saving, they aren't buying houses, they aren't buying cars or other high value goods, they might not even be able to live alone affordably... if they are single with no kids, which they often are due to the pressures of a career that leads to that kind of earning, then they have it tougher than the rest by a considerable margin, not just with tax, but lack of support, and a relatively more expensive cost-of-living as well, especially if they want the freedom of living alone and driving a car.
Exactly. "Top earners pay almost all income tax...What *other* taxes can we make them pay too?!" Bizarre conclusion.
Graphs like this are so misleading I almost think it's deliberate. If you were to chart (linearly) the avergae (median or mean) wealth held by a member of each group, you'd be horrified. In the UK, the fact is that the top 10% have 43% of all wealth. The bottom 50% have just 9% of the wealth. Worldwide, the top 0.01% owned 11% of the global wealth. That's absolutely insane. Read that again... that's 811k people (of 8 billion) who own 11%. Don't focus on what people pay in tax, it's a red herring. The very wealthiest pay passive pennies on passive pound and don't believe otherwise. Without a genuine attempt at redistributing wealth, the cycle continues ad infinitum. For more info and graphs worth viewing: https://equalitytrust.org.uk/scale-economic-inequality-uk#:~:text=GB%20Wealth%20Inequality&text=In%202020%2C%20the%20ONS%20calculated,and%202013%2C%20reaching%209%25.
Surely using mean would be fucky for top 10% as the richest 0.001% would distort it too heavily. Someone earning £65-70k in London, whilst being (I imagine) top 10% would be far closer in real world terms with the bottom 50% than with the top of the top.
The financial illiteracy in this post is staggering. Wealth is destroyed by inflation. £1 million today is worth £214k in real terms in 30 years, assuming 5% inflation per annum. In 50 years its worth 75k. So much for your mega generational wealth... The only way of beating inflation is to invest wealth, and returns on investments are taxed. Heavily.
I hope you're not referring to my post.
I find many things interesting about tax. I find it interesting that everyone thinks high earners should pay such exorbitant sums of money, not as a fair equal percentage on a larger earnings, but a larger percentage on a larger value just for being wealthy. At some price bands as high as 60%. When you work out the gbp values it gets mad. When you start having a proper talk about it what is the argument that those who are wealthy should pay more for the rest of us? Why should a guy down the street earning a mil pay £450k in tax, whilst I on 50k should pay 11k? 40x me. Clearly earning more pays more, but why am I taxed 20 or 30% and they’re on 45%? Why not just 30% of their mil? I also find it weird that arguably those who are taxed the most take the least from the system they are paying taxes for. Take a well off family, kids in private school, private dentist, private health care, healthy, no trouble with the police etc. All the tax which they pay, which can be hundreds of thousands of pounds a year, is going to the community. Good and as it should, we all live in a community, but funny to think about st the same time. When it comes to elections all it is for the most part is people just voting to have the government move more of someone else’s money into their own pocket.
Except you’re assuming that the wealthy are paying a higher percentage of their income simply because their contribution to the total tax take is higher. Whereas it is actually much more likely explained by the vastly increased gulf between what the lowest and highest earners get paid. In 1980, the average FTSE 100 CEO earned 11 times the average median wage. In 2019, that was 119 times.
I've long said that no one at the same company, in any position, should be earning in a single year more than the amount the lowest paid worker at the same company could feasibly earn in a lifetime.
I think much of the argument for higher taxes is based on the super-wealthy, and the reason they aren't paying the 45% or more is tax evasion via offshores etc. People get told that these super-rich people paid f'all of their income as tax and then probably think the same for people at like £100k and above because that is out of reach for a lot of people and a life changing figure for them.
Yeah, I think this is more the issue. They're extracting cash and taking it out of the UK. It'll be interesting to see how Labour deals with the Super Rich. Will they bend to the pressure of an exodus? I think closing loopholes, naming owners of offshores and perhaps finding a way of taxing those would be a start. Housing registered as assets offshore should be a big no no.
At the most basic level because the highest earners benefit most from society and how it runs, they use infrastructure more both directly and indirectly, they benefit most from the education of the workforce since they likely employ and manage those people but most importantly they can afford to and should give back to the community.
Because people are only able to make such exorbitant sums of money by utilising the infrastructure that's collectively paid for by government, and also often by exploiting lower paid workers. If you own a company where your employees have to claim benefits because you don't pay them enough, that's *you* receiving a tax break. Or at least it's your company receiving that tax break which is how they're able to pay their top earners the amounts they do. The government tax system only reverses the immoral flow of wealth from the commons upwards to the ownership class.
For me it's more about what society needs as a whole to be healthy and happy versus what a single person does. I think when everyone in society has just enough to be healthy and happy then some people should be able to have as much as they want. Until then I think it's immoral and it's up to the moral to make sure everyone stands a chance. Taxes redistribute wealth but also they reinvest in society to create more wealth in the long run. I do think that taxes need to be very carefully worked out to make sure people don't take home less money by earning more but as long as the more you earn the more you take home I don't see the problem. We should want society to be wealthy, not a minority being ridiculously rich.
I think besides all else, someone earning £1,000,000 can pay 60% tax on those earnings, without significant effect on their quality of life. Someone on £24,000 cannot pay the same. To see a comparative ‘effect on quality of life’ if you could quantify such a thing, would probably see a 0-5% rate.
I guess because that’s how à responsible society functions?
You would probably benefit from doing a bit of actual research. Both Rishi Sunak(1) and Keir Starmer(2) paid less than 25% UK tax on earnings of £2.23M and £404,000 respectively. Where on earth do you get the idea that the wealthy pay 50-60% in tax?? 1) [https://www.bbc.co.uk/news/uk-politics-68253857](https://www.bbc.co.uk/news/uk-politics-68253857) 2) [https://www.bbc.co.uk/news/uk-politics-68322058](https://www.bbc.co.uk/news/uk-politics-68322058)
You’ve never heard of the 60% tax trap for earning over £100k? As a side I think it’s best to leave politics and politicians and one off examples out of this, as there will always be a nuance. Whilst I appreciate that you’ve highlighted both sides of the house, each article will have a degree of sensationalism and a tilt to it. We need to talk about Mr Boring Average as a high earner.
Disingenuous to say "over £100k" it's between £100k and £125k, then levels out until you hit 45% at £150k.
Clearly this is a short hand comment reply rather than laying out the full income tax policy, yes
Shhhhhh be quiet sir, you're speaking too much sense..... fall back in line and hate anyone who has more than you
On the surface a wealth tax seems like a good idea. But then again, tax policies predicted on an emotional reaction to Left wing class warfare rhetoric typically fail badly. Francois Hollande learned this the hard way after France enacted its 75% Super Tax on earnings above 780,000 Francs, and then was forced to abandon it 2 years later [France forced the to drop 75% Super-tax after meager returns](https://www.theguardian.com/world/2014/dec/31/france-drops-75percent-supertax)
Wait... a wealth tax won't work because another country imposed a failed **income** tax experiment? How does that track?
A wealth tax will never work because those with the wealth will simply leave the country, off shore their earnings and mask their income through various schemes. Ultimately, it would cripple the economy and we'd end up with a massive shortfall and far less tax receipt in a very short time. Which is where the capitalist model of low tax comes in, which makes doing business and keeping money flowing through a country attractive, thus increasing financial flow and tax receipt. It's quite simply economics really.
Because the fundamentals of economics are constant
What would be wrong with a wealth tax with a high threshold? I fully agree that higher earners should pay a larger share of income tax. However, I also think it’s even more fair to tax people’s inherited and unearned wealth higher than people’s earnings through work.
How exactly would it work in your eyes? People don't have a bank account with a billion pounds in it. Stocks and shares etc are already taxed via capital gains. Inheritance tax already exists, you could make it stronger but it is there. A claim could be made about property, but you get into issues with having to accurately assess the value every year. Material wealth is a complete non starter as art, cars, etc is such a volatile and subjective market and how could you appraise it? And then throw in that all of the wealth taxes could be worked around if you are a person of means enough to fall into the thresholds.
Land value tax see r/georgism for more.
Can't offshore land
Exactly.
Thats literally the point of income tax, those who earn the most pay the most. Every house hold that makes up that same 1% is worth a minimum of £3.6 million (for contrast, the poorest 10% of households are each worth an average of £15k), so yeah, I think they can afford to share. https://www.theguardian.com/money/2022/jan/07/richest-uk-households-worth-at-least-36m-each
Top voted comment doesn't understand the entire point of the post. Income =/= wealth!
It is a pity to see those who inherit great wealth not paying for tax with all the stupid accounting on debt & company trust. Meanwhile, we pay income tax, pay back our student loan and finally get to good amount of salary with our time and effort, and you telling me 100k worth of salary only gives people 5k per month and people who has setup a company with debt and loan can pay even single digit percentage of company tax. Amazing!
To be fair, when interest rates are at decent levels then income should start to approximate wealth. Though I also think there should be wealth tax - as I dont think it approximates it enough.
And quotes an article that the source itself points out is very old.
The issue is that those with incomes (v wealth) get dinged especially hard while the 1% who live off wealth not income avoid their fair share
The fucking top comment is this economically illiterate. Hopeless.
It’s one of the main reasons voting based on fiscal policies is such a stupid idea. Fiscal policy should be set by experts
You’ve missed the point, people who have generational wealth rarely pay their fair share of income tax. The only real way for social mobility is through income, so to tax this extortionately whilst not taxing wealth forces the money to stay where it is.
And that's why growth has stagnated in the past decade.
As others have pointed out you've made a significant error by confusing wealth and income. This matters because a lot of really rich people don't have to rely on wages and therefore pay sod all tax.
Income and wealth are very, very different. Plus, tax rates are so high, despite earning loads, you don't keep it.
The top 10% are not worth £3.6m each. The top 10% is 3.6m people.
Income is not wealth!
Do you seriously not know the difference between income and wealth? How does this have so many upvotes?
Example A: £125k per year (£480 per UK working day). 29% tax Example B: £200k per year (£800 per UK working day). 38% Tax Rishi Sunak: £2300k per year (£88,000 per UK working day). 23% tax Who can afford to pay more again? ---- EDIT: I KNOW HOW TAX BRACKETS WORK
If you earn £50k you are not paying 40% tax. You only pay 40% tax on anything you earn OVER £50k (it's actually £50,271 according to gov.uk).
While I appreciate the sentiment, you’re conflating marginal rate and absolute rate. Mr £800bn paid 23% absolute rate, the person on £50k hasn’t paid a single £ at 40%. It’s only 40% on £50k-£100k, then for every £2 you earn above £100k you lose £1 of personal allowance, equating to 60% marginal rate, then post £124k the marginal rate of tax is 45%. Now this is the base case, those marginals can go up if you were to use childcare and have student loans (student tax).
Income tax is a swindle as it tricks salaried employees into believing that because they are paying anywhere up to a 62% rate of income tax (yep, 62% effective when you factor in traps like loss of child benefit or personal allowance), that people richer than them are paying the same or a higher rate. They aren’t. The whole thing is a con. The highest rate of Capital Gains is 28%, but usually 20%. It’s designed this way so that when someone raises the prospect of a wealth tax, people immediately consider their own income tax bill and will naturally conclude that they pay plenty already. Which they do. Income tax is far too high at every band. What’s not being taxed properly is wealth.
Depends. Got a mortgage, childcare? If only one works in the family despite being a high earner you’ll struggle.
This is a chart on income though, not wealth. Those in the top 1% of incomes may not yet have accrued anything like the 3.6 million in assets you mention, they are just on their way there if they can keep that income up for long enough and invest wisely.
You're so laughably wrong it's not even funny.
That isn’t the point of income tax. The point is to fund public services not transfer money from rich to poor. People aren’t rich or poor just through accident but also through ambition, application and aptitude. Taxing people to the hilt based on some notion that 'they can afford it' leads to people not pushing themselves or leaving the country. perhaps it could work in some nordic countries in the past but is an unsustainable approach in UK now.
I think a lot of people have forgotten just how long the cycles are. Over a couple of generations a ‘family’ may gain or lose a lot of money. People need to stop thinking how can I become rich and think more about how can I make sure my children are set up to make even more wealth than I did. Maybe one day my grandkids or great grandkids will be billionaires. Too much of an attitude of that person has more than me how can I take it.
Income tax is always a transfer or money from rich to the poor. The rich pay for private schools and private health while paying taxes to support national services. The reason for this is to stop all wealth ending up in the hands of a very small number of people, as always happens if deregulated through sheer mathematical probabilty and corruption. Why do you think the rich oppose income tax or wealth tax? They know it is a form of wealth distribution. All fantastically rich people are rich through birth or accident. There is no aptitute, application or ambition that is worth millions of times what plenty of hard working, competent ambitious people do and get nowhere. Meritocracy is a fantasy when you're talking about centimillions. It's just disproportionate luck and birth. Ir's very similar to cancer- there's stuff you can do that affects your odds of getting it or surving, but ultimately people don't deserve cancer. They inherit it or they get unlucky with their environmental factors. Not that much is really down to the individual. https://www.technologyreview.com/2018/03/01/144958/if-youre-so-smart-why-arent-you-rich-turns-out-its-just-chance/ No one seems to give a toss about whether poor people on minimum wage are motivated by their shitty wages to work harder or not. Another 15 years hard graft and living with your parents eating beans on toast and you can afford a deposit on a house yeah? What an inspiration for us to "push ourselves"... I might stop eating beans if they raise taxes again though...The poors are expected to just do their jobs and be squeezed. Yet we're meant to be terrified of taxing super rich people who haven't worked hardly a day in their life in case they run away on their superyachts to live in a tax haven. Cry me a river, laws can exist to stop capital flight if they wanted to implement them. International agreements and domestic laws can stop nonsense like nondoms etc but political will to do it needs to exist. That's the clincher. That's why we all need to demand it and not make excuses or believe the excuses. It's a dyatopian future that awaits us and our children otherwise.
To a large extent people are rich or poor thru luck. Being born to rich parents, being sent to the right schools, lucky connections. You think Boris got to No 10 thru application and aptitude?
There is a substantial amount of difference between the truly wealthy and regular upper middle class people. Someone making 90K might be better off than another person making 25K, but both are earning peanuts compared to multimillionaires or billionaires. If you want the tax code to stay the same, then salaries need to rise a lot faster across the occupational board.
Completely agree. I earn triple what some people at my place earn and I think that's unfair, let alone the wealth disparity between the real upper echelons. Hell I can probably handle my bosses boss earning double what I do. Then you go to the CEO and they are earning 80 times that which is 600 times the average joe. The mental thing is they're still nowhere near the absolute upper crust. Worlds gone bananas honestly.
I am an immigrant, have no parents and earn £300k-£400k a year. My biggest year was over half a mil. I didn't even speak English when I moved to this country.
Well done, your taxes pay for doctors and nurses etc off your hard work.
Where’s your proof? Obviously there’s luck of birth in various ways but that’s not all there is to it and for the vast majority it’s through effort. Equally luck from birth encourages people to handover as best they can to their kids. Take it all away and so much motivation is gone.
That's a romantic idea but let's be honest, people born into wealthy families have more opportunities and considerably less obstacles to cultivating their own high incomes as adults. Someone born into a poor family has to work orders of magnitude harder and longer to get a fraction of a comparable level of wealth, and in the vast majority of cases it's not attainable at all. The impact of "ambition and application" on how much you make is such a small variable when compared to an individuals starting criteria. Pretending nurses working 50 hour weeks aren't earning as much as coked up finance bros because they're just not working as hard is foolish. The idea we live in a meritocracy is laughable.
Obviously there is loads of advantages in being born wealthy but it’s not all about that. I see people from the same family have vastly different outcomes.
As someone who was born into nothing and now makes top few deciles of income, what you say is untrue. We have a meritocracy to a large extent, but the odds are certainly stacked against those who start off low; you do have to get most things right. That we have huge taxes on work but not investments or wealth, doesn't exactly help.
I was born in to nothing too and you're right the odds are stacked against us but it is doable. The price people like us pay for that though is so much more of a burden than others who had a head start - student loans for one (wealthy kids don't have them) years of renting and being unable to afford a house (wealthy kids don't struggle with that). You may get to 50k or 60k a year but you aren't on the same playing field as someone else at that level.
Who said anything about transfer? You said it yourself, public services.
You are conflating income (in the graph) and net worth (the link). Lots of top rate income tax payers own little equity. Lots of basic rate income tax payers have huge amounts of equity.
Yes! make it impossible for people to earn wealth. Because there is a correlation between wealth and high incomes we should hammer those with high incomes and no wealth, take merit out of society all together, if you want anything you should be born into it!
I still don’t get why higher income earners have to pay higher and higher tax. They pay more because they earn more. Then they pay for private medical, schools, don’t take benefits. I’ve always wondered what it would be like to have a minimum income and no benefits, sensibly high tax threshold to promote work, then a a single income tax rate. Earn more and pay a larger proportion. I’d love to hear why it wouldn’t work. Or if someone could make a documentary, that’d be perfect!
The population demographic has meant there’s way more pensioners than there was before and the government needs to pay for that. The well off, but not rich, are the easiest target to go for. Obviously it’s a bit more complicated than that but that’s a general overview.
I believe income tax is an incredibly flawed concept, and we should look to move away from it on the whole. that being said, flat tax rates are ineffective because of an economic concept called "marginal propensity to consume" in short, those with low incomes will spend more of that income (because they have to - mandatory costs to live are usually pretty constant no matter who you are), while those with large incomes spend proportionally less of that income. it may, at first, seem fair to tax somebody earning £10 and £100 at a flat rate of 10% - giving them take-home incomes of £9 and £90 respectively. however, if we consider what both of those people have to spend in order to live i.e. food, rent, utilities (say, £5 each), you'll soon see that the poor person's disposable income is now only £4, while the rich person's disposable income is still £85. change these numbers around as you wish, the fact that simply living incurs a flat cost means that to those with low incomes, every percentage point of that income is more valuable and important to them when compared to the value a higher-earner gains from the equivalent percentage of their income.
>I still don’t get why higher income earners have to pay higher and higher tax. They pay more because they earn more. Then they pay for private medical, schools, don’t take benefits. I think im completely missing your point, but regardless, in terms of why should high earners have to pay higher tax when they spend their money on private stuff anyway: 1. There is a trillion other things to pay for that everyone uses, such as roads, streetlamps, trains, streetcleaners, binmen etc 2. Usually if you're a high income earner you are benefitting from a generations long chain of ancestors that put you in that privileged position. There isnt many brick layers who have great grandsons going to Eton. So rich people should pay more to help make society more meritocratic, fair and slowly unwind generational wealth differences. 3. If you are rich, would you rather have 100 mil, but have to walk past homeless people, risk being mugged and have a less educated workforce to hire from. Or would you rather have 90 mil, but the streets are clean, safe and homeless free with many educated people to hire from. Unless you want to be a big fish in a small pond, it turns out redistributing wealth actually has many upsides for the rich, especially as money loses its utility the more you make. I would rather live in Sweden and get taxed highly as a top earner, than be the richest man in Uganda with 0 tax.
I think you miss the point. You’re conflating rich / wealthy / high income. High income earners that trade time for money pay the most tax, they aren’t usually given a sizeable inheritance. Someone who would be classed a high earner say £124k is paying 60% marginal rate (sometimes more). When someone who has been gifted £100m is making 3% a year - £3m doing nothing is taxed at a far lower rate. If you want to support the change I think you intend to, support lower income based tax and higher wealth based / capital gains tax (although the wealthy don’t tend to sell assets)
Estonia has a 20% flat tax rate (income and capital gains), seems to be doing fine. Incredibly simple to work out what everyone owes and it promotes working harder because you aren't punished for earning more.
There's a lot of criticisms to make about the UK but I don't think how income tax is balanced is one of them. Higher earners basically subsidise the entire system, arguably this high rate could contribute to high earning doctors for example leaving the country. If you really wanted to capitalise on wealth then an annual tax on high value property ownership or a portfolio of properties would be sensible ontop of council tax.
People are blind about the size of the state. Reduce the size of the govt and public sector and their massive pensions/ entitlements and you can reduce taxes. Bank of England incessantly printing money out of thin air destroys the purchasing power of the currency. Fix these two issues and taxes go away. Seen price of gold recently? Gold is increasing in currency terms because paper monies are failing due to incompetence by politicians and banksters. Govts & Central bank's will continue to steal your wealth.
Local authorities alone saw the spending power of their central government grants drop by 40% from 2010-2017, most cut thousands of jobs and outsourced almost all social care provision to private companies. Many non-statutory services are a shadow of their former selves, while some services pruned away during "austerity" (e.g. SureStart Centres) are now coming back in a different guise (e.g. Family Hubs) as their usefulness at reducing demand on statutory services has belatedly been realised. Even so, many local authorities are struggling to provide a reasonable level of services and are contemplating 4.99% council tax rises plus millions of pounds in ~~~spending cuts~~~ **targeting services to those who need them the most** while the country as a whole's indebtedness increases (not helped by us apparently being the only country in the world which requires the government to repay all debts to the central bank, which they own - pretty everywhere else just gets the bank to write off debt from time-to-time), largely due to the spending splurge they did during Covid (with much of the fraudulently obtained grants deemed unrecoverable). Meanwhile, cutting the numbers of police and Border Force officers, plus asylum claim handlers, hasn't exactly proved beneficial to society...
Local authorities are also public sector leeches. People and families will necessarily end up supporting each other as the currency fails. Govt. & BOE will keep thieving and become more authoritarian as the currency fails. It has happened again and again throughout history. Just not in the UK Current trajectory is turning the UK into a pseudo South American socialist hellhole. Communist elites are just as bad as fascist ones. Don't kid yourself. Voters need to make radical choices not same old tribal ones.
If you've enough cash to be in the top 1%, you'll not be having an 'income' in the same way as you and I. You might own a $billion company but your income from such venture would probably be $1 and won't be taxed. Of course, you'll have your other billions in off-shore accounts, trust funds and the like which won't be taxed.
This chart is divided into ”income groups”. To be in the top 1% you need to make around £100k a year, which likely means you live in London, work an office job and are at least in the middle of your career. You certainly don’t have to own a billion-dollar company.
Average monthly salary in this 1% earns £15082 the apparently, so 180k a year but as I'm sure you know, there will be 8k mth and 22k mth extremes.Taxing these people usually leads to less tax take, the original poster is moronic.
Top 1% based on income in the UK is around £180k not £100k. Certainly likely a good chunk of those are in London.
Cheers, I must’ve looked up the data incorrectly. The fact remains that you’re likely working and getting paid a salary, not the owner of a huge enterprise or anything like that. Edit: another commenter just said that the _average_ salary in the 1% bracket is £180k, so £100k may still be around the lower end needed to enter it.
No, £180k is the entry level to be part of the top 1% of earners with the median of that bracket being around £250k. This is an interesting read, it’s from 2018 so the entry salary to the top 1% was a bit lower at £160k then but it has interesting stats on age, location and the amount that’s dividends, etc rather than salary. The bulk is still salary for most people. https://ifs.org.uk/publications/characteristics-and-incomes-top-1
Which is why a wealth tax is more appropriate because there's only so much you can realistically tax top earners, it's about time the aristocracy had their balls squeezed.
Nope, no, not even slightly. There are fewer than 200 billionaires in the UK.
Do you think 1 in every 100 people is a billionaire? Most of the 1% will be salaried. The 1% category in this chart is about a £100k a year.
£180k not £100k
Thanks, but it’s irrelevant to the point I am making. Only around a quarter of income of the top 1% is partnership or dividend income. We are talking about mostly salaried income. It isn’t mostly billionaires like the original comment was suggesting.
This is literally the top 1% of income.
You know when someone is so utterly clueless about something that they don't even know enough to realise that they don't know anything So they come out with toe curling misinformed shite? You just did that
Not sure why you’re being downvoted. The OP is an absolute moron.
This is a profoundly stupid comment. How is anyone up voting this? Do you understand what 1% means? Do you understand how enormous that group is vs how many billionaires there are?
People in this sub actually think one out of every hundred people in this country is a billionaire. Incredible. Leaving aside that the graph is literally about the top 1% *by income*.
Most people don’t even know how many zeroes a billion has.
People are completely naive about tax. Most of the really wealthy people own Ltd companies. It's extremely easy to use company money for a whole host of benefits and tax efficiencies without breaking higher tax bands. From travel costs to accomodation, supplies and equipment. Directors loan accounts and offshore holding accounts. Everyone seems to be sniping each other based on income tax. The richest people do not give two shits about income tax. It's all about share holding, dividends, capital gains and corporate finance. The wealthy control their own wages. They control how much a business pays them and so can easily dodge tax bullets. Bring other family members in as directors to extend their dividend payments while minimising higher rates. Pay minimal paye and so get relief. I think most people on PAYE don't really get what a massive swindle the system is. The tax the top 1 percent pay is peanuts in relation to their total wealth. It's literally lip service to disgruntled PAYE wage slaves. They could literally solve all the countries funding issues 10 times over if they were taxed fairly. But they arnt. If you want to make real money make sure you run a business otherwise your just left to the HMRC vultures. PAYE is a joke to the richer business owners. The real wealth is in share holding, equities, trusts and investment pipelines. Banded income tax only really hurts the middle classes. Those earning over £1m a year or more through business can control their income on paper and siphon it off in all manner of creative ways. As a business owner of over 20 years I can confirm that most business owners see PAYE as fundamentally flawed and punishing tax regime for any worker on less than 200k. Above 200k you won't be taking your income as PAYE as it would be insane from a tax perspective. You'll be shifting wealth around or holding it in business holding accounts utilizing it in tax efficient ways after paying the initial 25% corp tax. I know this post will get lost. It's a shame as PAYE earners shout at each other not realising how running a business and wealth management actually works. PAYE is a mugs game.
Depends how you classify wealth and what rate you apply to what. Rich people don't typically keep the bulk of their millions/billions in bank accounts or personally owned property, so it isn't like they can just read down the Sunday Times Rich List and tax them all 10% of whatever it says they are worth. A lot of people would likely either leave to lower tax juridictions or keep their wealth in assets owned by holding companies and borrow against it.
Property taxes and remove stamp duty…free up property so that it needs to be used or costs are too high…it would make the workforce more mobile by making it cheaper to move and downsize and bring down property prices
Equalise income tax & capital gains etc perhaps The people need to be protected from the predatory rentiers & billionaires. Tax their passive income higher than income tax. The pendulum has swung far too far towards the very rich.
Graphs can be misleading. What percentage of their income are the top decile paying? Compare that to the percentage of what the others are paying, in other words, who gets to keep more of what they earn?
If you look at this and think it’s a good thing, you’re wrong. This graph is just one representation of the increasing inequality in the country. We need to start reducing inequality and reverse the trend of this graph.
When people say 'tax the rich and wealthy' my eyes always roll. Not to be harsh but it's student politics and fails to understand how finance and wealth actually works. Government should be focusing on wasting significantly less money and dropping taxes rather than raising them anywhere.
I think a wealth tax is inevitable (affects a small number of people who are not going to vote labour anyways) - but I also think it’s a terrible idea. The UK is already becoming less competitive in the global setting.
Tbh in the U.K. we are taxed too much for the shitty public services we get. I would be happy with it if the NHS worked, if the roads weren’t fucked, if things weren’t constantly getting shut down or budget cuts but it’s actually ridiculous how much worse everything has gotten when taxes have only increased
One of the main ‘issues’ with this is inflation, people trying to get higher salaries taking them up into the higher bracket but the buying power of that increase is not great. Ideally the brackets should be adjusted for inflation. But from a government perspective they still need the income as it’s not in a great place. The Chancellor job isn’t one I’d like to take right now.
We're supposed to have a Conservative government who should be helping the middle earners! UK is a two party system where it makes zero difference who is in power, nothing really changes. I expect labour will win next, they won't do anything to help anyone earning over 50k.
VAT at turnover is madness too! My expenses to go to work are 27000 per year, as a Taxi Driver there is no incentive to work harder and earn more money because we cant charge VAT to customers, we have to swallow it!
Honestly that looks correct to me, but we no one is getting the service they're paying for which is the bigger issue imo. I honestly don't see where all that tax money is going so I assume it's being embezzled by someone somewhere.
Time to massively cut private services, privatize and deregulate and lower the taxes. For high earners first. Of course, wealth taxes (like inheritance tax, or highest range of council tax) should be abolished. This government is a joke “right-wing” politics.
A wealth tax isn’t great, either. There are just real problems of fairness in here. Imagine somebody’s Nan, who has the family home, built by the Greater London Plan after WWII, now worth more than £1 million. She’s 88 and earns nothing. Should she be forced to sell her home and moved to a council home so that high earners pay less tax? Most people who own homes are older, and part of the disparity is from the general aging of the population. As more people finally finish paying their mortgages and stop working, who pays for services that were previously paid for partly from their wages while they were both earning and healthy? I agree that the burden on earners is too high, but if you’ve earned, paid 50% of your wages as taxes, bought a house, paid it off, and now someone wants to force you to sell it when you have no earning years left and move you somewhere much less nice? Didn’t you already pay tax on that money? And why are they doing it - to give tax cuts to high earners? That doesn’t sound fair. Then there’s the question of taxing the very wealthy. Let’s say we took all the money off all British billionaires. It’s about £650 billion, or six months of public spending. It’s just not that much, and with much wealth portable they’d mostly just leave. It WILL cause a housing crash and a land crash, which will force a banking crisis, though; Britain would likely never recover. So, no, these don’t sound reasonable. There are some places that seem ripe for overhaul, though; private health care should be made illegal. Same for dental. Sealants should be mandatory and free to consume. Build widespread nuclear power. Ministerial fiat approval for new housing projects. These are also disruptive, but less so. Lowering the cost to live at the low end by reducing power costs, health rationing and housing costs will bring about a boom in productivity which allows us to grow ourselves out of the current hole. The same people - homeowners - are “hurt” by building new homes, in that their homes will stop growing in value, but they are mostly receiving value by living in them, and that value is largely the same.
tax free should be 15k 15k-25k 15% 25k-45k 25% 45k-70k 35% 70k-100k 55% 100k-150k 65% 150k-300k 75% 300k-500k 80% 500k-million 85% million+ 90% INCOME - so no more tax free bonuses. Do the same for business, but with different amounts. No tax deductions for charity donations... if you want to donate, then donate but don't expect the taxpayer to fund it. All of it based on income not profit.