RE: teccc17 Nov 2022 21:02
The worse part imo is keeping the lower tax free rate at £12570 until 2028.
So you pay zero tax on £12570 atm but if you get a 10% inflation pay rise it’s 8% because you pay 20% tax for crossing the band. This compounds each year as the tax free band doesn’t increase.
Now the upper end of the band is £50270.
For sure the math is proportionally the same but it’s from the bit in the middle where folk on like £38k have a much lesser impact on freezing of the bands than for those on £12.5k.
You get the gist in terms of % impact on take home pay and essential costs.
That impact is much more severe for lower earners which then further disincentives work as benefits go up more than the thresholds and people earning take home less.
As you get closer to 2028 it’s likely the ‘why bother’ will increase.
Now don’t get me wrong, I am NOT saying people on benefits shouldn’t have inflation increases. I am pointing out that benefits go up by inflation but earnings are anchored so as time goes on, certain benefits like unemployment will become more attractive for those few so inclined that it disincentivises work. So the countries prod reduces and so does it’s tax revenues which could actually lead to a more punitive tax regime .
This is one of the reasons why I think the whole tax system should be completely changed so that there is a min tax free income that aligns with low earners take home pay to take people out of poverty and incentivise work.
The wealthy also get the same allowance.
You then you have a ski slope of many tax thresholds from £17k up to 45% so that is proportional but not punitive.
So £17k = 10% 20k = 15%, £25k = 20%, 30k=25%, 35k=30%, 40k=35%. 45k=40%, 50k= 45%
You get the gist… it also incentivises movement through pay bands.
Something similar has been costed by the conservative woman website, I can’t find the link but in any event the principles hold.
And ffs get rid of the tax loopholes! There are billions lost in offshored tax avoidance schemes by the likes of Amazon. Google and even flipping Starbucks!
Of course there is no incentive to stop it else the mps and their lobbyists also dip out!
Hence pay them £200k a year or whatever according to a remuneration formulae! I don’t care but the objective is their **** belongs to their roles. No taking money from any other source and all their income is subject to uk laws. The priority is to free them up and pay them well so we get good honest talent and they can serve our country.
If you keep ‘talking sense’one day surely someone will believe!
Lol!
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Trek
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