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+--- Thread: Growth (/showthread.php?tid=37673)
RE: Growth - Protheroe - 06-16-2025
(06-16-2025, 02:32 PM)baggy1 Wrote:(06-16-2025, 02:16 PM)Protheroe Wrote:(06-16-2025, 12:54 PM)baggy1 Wrote: Are you the same poster that has been complaining that we are taxed too much, because it appears you have just posted a chart that shows there are only 8 countries that have less tax (taking into account that is 2022 and we may have moved right)
This is merely tax on earnings B1. I'm illustrating that the median earner in the UK is currently relatively lightly taxed.
The tax burden falls much more heavily on higher earners already, as a progressive system ought to - but creating the disincentives I've bored you all about for years - but which are now coming home to roost in "quiet quitting" in particular, which any sane system of taxation ought to be able to avoid.
I've also explained the perverse incentives for businesses already created by the tax system which mean you won't really get any more from them.
That's without even mentioning Council Tax & Business Rates neither of which have any basis in fairness nor reality (and never did). We already know Council Tax is going up by 5% each year plus whatever the police & fire service need. I expect I'll be paying £5,000 per annum in a few years time by the time we're quietly quitting.
Rachel Reeves knows there is only one place she can realistically go for the amount of tax she needs, and that is to median earners. Having ruled out increases in the basic rate and NI that either means fiscal drag forever or another volte face. Whichever way you look at it, it will be lower and middle earners who have to make up the difference - you can't squeeze the pips for everyone else forever - as illustrated in that chart.
I agree generally with what you say Proth however the country is hemmed in by it's own fears. We have frozen the debate by loons like Chunk who will ignore the failures of one side and yet scream from the highest hill when the other side make lessor mistakes. God help the poor sod when tax increases do appear. When the situation is as dire as was predicted by yourself last year repeatedly then I'm not certain where they can turn.
We all know the last lot were virtually criminal in their actions and topped it off by politicizing the need to raise taxes when the very thing that was needed in tax increases to afford the state that we need.
I wouldn't say that the others were squeezed to the pips forever, you and I are of a generation that has benefitted from freedoms and legitimate tax avoidance through ISAs and Pensions and those freedoms have been restricted rather than had the life squeezed out of them. The IHT on pensions value being added to the value of our estates is an inconvenience if I died today but probably manageable and avoidable if I make it through the time that I have worked through the amount that I had put aside for the very reason of a pension - to provide a lifestyle when I stop working as opposed to somewhere to hide it away to avoid IHT.
The pips have well and truly been squeezed B1. Disincentives are everywhere for higher / top rate taxpayers or anyone with business or personal assets outside a tax wrapper.
Like I say, if they continue to reject LVT the only way that Labour can hope to raise the money they'll need will be via lower and middle earners - anything else just reinforces the disincentives that already exist.
RE: Growth - tHEgLASSdOORS - 06-16-2025
I’m busy planting pips for my glidepath
RE: Growth - Protheroe - 06-16-2025
The disincentives are the entire reason for having a gildepath.
RE: Growth - tHEgLASSdOORS - 06-16-2025
It’s just how you frame them. Stop being a negative Nelly.
RE: Growth - baggy1 - 06-16-2025
It really is how you frame them - IHT including Pensions now for example.
This was seen as a way around paying tax and storing money up into a pot that won’t be taxed by inheritance tax. The reason for paying into a pension is to provide you with an income when you retire, you get your contributions tax free and you get to withdraw a quarter of it tax free when you retire. You can then use the rest to live the life you have planned for. But those that could afford paying more in saw a tax benefit available to them by protecting it from being added to their estate when they die, a legitimate way of avoiding tax but not what it was designed for. Nasty Reeves then closed that loophole and apparently that is now a disincentive to invest in pensions which prop up the stock market - the reality is it’s just made rich people have less ways of protecting their wealth from tax.
Dekka is crying out for a wealth tax and one was put in place under his nose. Proth is pissed off because he might end up paying some tax, and Chunk is pissed off because the daily express told him to be.
And that is either a disincentive or a good way of collecting tax from the wealthiest to protect the future of the country. Irony being that Reeves will probably not see the benefit of this because it won’t really kick in for a few years, but it is a good way of taxing the wealthiest without punishing those that will only be able to get enough in their pensions to live off - i.e. what a pension was designed for.
RE: Growth - Protheroe - 06-17-2025
It's not a good way of taxing the wealthiest because as ever, they will simply change their behaviour. You just watch the amount of tax-free money that people will release at the age of 55 and dump offshore with the rest of the money they're no longer saving into a UK pension. Watch the demand for Britannias spike for the VAT and CGT benefits. See how many wills are that have been executed in the last 18 months get amended.
None of this benefits Reeves. A far shrewder move to raise far more money would have been to limit pension tax relief to something marginally above the Basic Rate - say 25%. That would mean lower earners who've been talked into counter productive auto-enrolled pensions would get a boost, the Treasury would make a massive saving and higher earners could then be further incentivised to invest in UK businesses with some form of tax credit - whereas UK pension funds currently invest less than 3% in UK equities, a historic low.
When you say Proth is pissed off about "some tax" just ask yourself whether you'd be happy working for 40p in the £1. I'm not so I won't, it's as simple as that. That's how disincentives work. It's corrosive.
Edit: It seems Reeves agrees with me in some respects: https://www.theguardian.com/politics/2025/jun/17/reeves-inheritance-tax-non-dom-backlash
RE: Growth - baggy1 - 06-17-2025
The '60%' tax rate applies to a small band of your income (25k), once you've worked through that you will go back down to 45%. And I'm comfortable with that so it's not a problem, it's just tax after all and lets be honest it doesn't mean we're having to live off beans. I have seen this a bit lately with businesses saying 'I'm not going to take on more staff because of the NI rises' when it basically means they restrict their own earning potential by doing so. Daftest line of thinking I've come across - I'm not going to earn £125k because at £100k my tax rate goes up for a bit.
RE: Growth - Protheroe - 06-17-2025
Your "A bit" is my marginal tax rate going up by 50%. Sorry pal, but no one in their right mind who had the choice would bother.
There's not a tax expert alive who'd disagree with me either. Creating disincentives like this whilst, apparently, being "laser focused on growth" is just laughable. Don't even get me on to the Non Dom story above - "let's put people off living and investing in the UK whilst being laser focused on growth". Our government is in thrall to Treasury orthodoxy which prioritises the numbers adding up next year over sense. In terms of the depressing effect on the economy it's up there with the idiotic timing of Truss.
RE: Growth - tHEgLASSdOORS - 06-17-2025
I don’t think the “numbers adding up for next year” is confined to treasury orthodoxy. It’s pretty much been the foundation of everything that has gone wrong at every level
RE: Growth - Protheroe - 06-17-2025
(06-17-2025, 11:53 AM)tHEgLASSdOORS Wrote: I don’t think the “numbers adding up for next year” is confined to treasury orthodoxy. It’s pretty much been the foundation of everything that has gone wrong at every level
Quite, but all paths lead back to the Treasury.