The Tax Burden
Discussion
It seems to me that there is a genuine appetite to have a bigger state in the UK, largely in the shape of higher spending.
Scandinavian countries are often referred to as good examples of what might be attainable with a larger state.
Naturally, a larger state means higher taxes.
However, do people really have an appetite for a larger state if it means that they have to pay higher taxes?
For example, the taxes payable by someone earning £12,500 in Denmark is around 33% of their income.
In the UK it is nil.
Conversely, a high earner on 200,000 would pay c. 51% tax on their income in Denmark, and at c. 41% in the UK. The % increase for the person at the top is much smaller than for those on low and indeed medium incomes.
My point is that a higher tax state will likely apply to everyone. Companies in particular will pay more in the shape of higher social contributions but fundamentally, basic rate tax payers will need to contribute more.
My impression is that almost all of the political parties peddle the myth that someone else will pay for the larger state they have in mind. I genuinely think people believe that 19% basic rate and say 60 - 70% top rate taxes will get this done i.e. very low taxes for the majority but huge taxes for the wealthy.
I would be interested in any polling information that shows the appetite for a Danish style increase in taxes for all. All of the data I have seen suggests there is no appetite for increases in basic rate tax.
It would be good if we could have a sensible debate about this in the country at large.....
Scandinavian countries are often referred to as good examples of what might be attainable with a larger state.
Naturally, a larger state means higher taxes.
However, do people really have an appetite for a larger state if it means that they have to pay higher taxes?
For example, the taxes payable by someone earning £12,500 in Denmark is around 33% of their income.
In the UK it is nil.
Conversely, a high earner on 200,000 would pay c. 51% tax on their income in Denmark, and at c. 41% in the UK. The % increase for the person at the top is much smaller than for those on low and indeed medium incomes.
My point is that a higher tax state will likely apply to everyone. Companies in particular will pay more in the shape of higher social contributions but fundamentally, basic rate tax payers will need to contribute more.
My impression is that almost all of the political parties peddle the myth that someone else will pay for the larger state they have in mind. I genuinely think people believe that 19% basic rate and say 60 - 70% top rate taxes will get this done i.e. very low taxes for the majority but huge taxes for the wealthy.
I would be interested in any polling information that shows the appetite for a Danish style increase in taxes for all. All of the data I have seen suggests there is no appetite for increases in basic rate tax.
It would be good if we could have a sensible debate about this in the country at large.....
ant1973 said:
I
However, do people really have an appetite for a larger state if it means that they have to pay higher taxes?
Speaking for myself - yes. I would happily pay Scandinavian/Northern European levels of tax in return for Scandinavian/Northern European levels of public service, infrastructure and social provision. However, do people really have an appetite for a larger state if it means that they have to pay higher taxes?
And I've stated multiple times on various threads that that contribution should be made by as many people as is practically possible - not dividing the system into 'givers' and 'takers', but universal provision and universal contribution. Contribution should still be strongly progressive but I don't like the situation where lots of people pay nothing (or very little) and those at the top (who directly receive very little) pay the most - or, more accurately, the richest individuals and institutions manage to fenagle their way out of paying their fair share so those in the middle get unnecessarily shafted.
I feel (and said as much at the time) that Labour's 2019 stance of "massive state expansion and spending but no new personal taxes on those earning below £85,000" was a mistake both for practical and political reasons. That's not how the best social democracies in the world work, it over-simplifies the issue into 'just make the rich pay for it all' and it is not being honest with the scale of funding and borrowing needed to properly enact the change that was being desired.
Another key thing to bear in mind with a lot of the European systems is that while taxation is strongly progressive so is, in a sense, the provision. In Germany you pay about double the rate in various social/service taxes of what a British worker pays in National Insurance but you also get 60% of your average net pay over the last 12 months for between one and four years (depending on how long you worked before claiming) so not only are there very real benefits to being in work but there is also a sense of getting out what you put in. You also get taxed on that amount just as if it was a wage.
Contrast that with the UK's Universal Credit where if you've been in a well-paid job for 10 years you first have to burn through all your savings before passing the means testing to start claiming, and when you do you get the same amount as someone who has never worked, and you have to pass through a load of frustrating and invasive hoops to keep claiming what you've supposedly been paying for your working life.
Edited by 2xChevrons on Tuesday 11th October 17:49
ant1973 said:
.
Conversely, a high earner on 200,000 would pay c. 51% tax on their income in Denmark, and at c. 41% in the UK. The % increase for the person at the top is much smaller than for those on low and indeed medium incomes.
My point is that a higher tax state will likely apply to everyone. Companies in particular will pay more in the shape of higher social contributions but fundamentally, basic rate tax payers will need to contribute more.
My impression is that almost all of the political parties peddle the myth that someone else will pay for the larger state they have in mind. I genuinely think people believe that 19% basic rate and say 60 - 70% top rate taxes will get this done i.e. very low taxes for the majority but huge taxes for the wealthy.
I would be interested in any polling information that shows the appetite for a Danish style increase in taxes for all. All of the data I have seen suggests there is no appetite for increases in basic rate tax.
It would be good if we could have a sensible debate about this in the country at large.....
Sample size of 1 - my son works for an IT Consultancy and had a Danish boss (based in London). His boss was well within the Additional rate and was more than happy to be paying Danish taxes. Conversely, a high earner on 200,000 would pay c. 51% tax on their income in Denmark, and at c. 41% in the UK. The % increase for the person at the top is much smaller than for those on low and indeed medium incomes.
My point is that a higher tax state will likely apply to everyone. Companies in particular will pay more in the shape of higher social contributions but fundamentally, basic rate tax payers will need to contribute more.
My impression is that almost all of the political parties peddle the myth that someone else will pay for the larger state they have in mind. I genuinely think people believe that 19% basic rate and say 60 - 70% top rate taxes will get this done i.e. very low taxes for the majority but huge taxes for the wealthy.
I would be interested in any polling information that shows the appetite for a Danish style increase in taxes for all. All of the data I have seen suggests there is no appetite for increases in basic rate tax.
It would be good if we could have a sensible debate about this in the country at large.....
2xChevrons said:
Speaking for myself - yes. I would happily pay Scandinavian/Northern European levels of tax in return for Scandinavian/Northern European levels of public service, infrastructure and social provision.
And I've stated multiple times on various threads that that contribution should be made by as many people as is practically possible - not dividing the system into 'givers' and 'takers', but universal provision and universal contribution. Contribution should still be strongly progressive but I don't like the situation where lots of people pay nothing (or very little) and those at the top (who directly receive very little) pay the most - or, more accurately, the richest individuals and institutions manage to fenagle their way out of paying their fair share so those in the middle get unnecessarily shafted.
I feel (and said as much at the time) that Labour's 2019 stance of "massive state expansion and spending but no new personal taxes on those earning below £85,000" was a mistake both for practical and political reasons. That's not how the best social democracies in the world work, it over-simplifies the issue into 'just make the rich pay for it all' and it is not being honest with the scale of funding and borrowing needed to properly enact the change that was being desired.
Another key thing to bear in mind with a lot of the European systems is that while taxation is strongly progressive so is, in a sense, the provision. In Germany you pay about double the rate in various social/service taxes of what a British worker pays in National Insurance but you also get 60% of your average net pay over the last 12 months for between one and four years (depending on how long you worked before claiming) so not only are there very real benefits to being in work but there is also a sense of getting out what you put in. You also get taxed on that amount just as if it was a wage.
Contrast that with the UK's Universal Credit where if you've been in a well-paid job for 10 years you first have to burn through all your savings before passing the means testing to start claiming, and when you do you get the same amount as someone who has never worked, and you have to pass through a load of frustrating and invasive hoops to keep claiming what you've supposedly been paying for your working life.
Interesting suggestions And I've stated multiple times on various threads that that contribution should be made by as many people as is practically possible - not dividing the system into 'givers' and 'takers', but universal provision and universal contribution. Contribution should still be strongly progressive but I don't like the situation where lots of people pay nothing (or very little) and those at the top (who directly receive very little) pay the most - or, more accurately, the richest individuals and institutions manage to fenagle their way out of paying their fair share so those in the middle get unnecessarily shafted.
I feel (and said as much at the time) that Labour's 2019 stance of "massive state expansion and spending but no new personal taxes on those earning below £85,000" was a mistake both for practical and political reasons. That's not how the best social democracies in the world work, it over-simplifies the issue into 'just make the rich pay for it all' and it is not being honest with the scale of funding and borrowing needed to properly enact the change that was being desired.
Another key thing to bear in mind with a lot of the European systems is that while taxation is strongly progressive so is, in a sense, the provision. In Germany you pay about double the rate in various social/service taxes of what a British worker pays in National Insurance but you also get 60% of your average net pay over the last 12 months for between one and four years (depending on how long you worked before claiming) so not only are there very real benefits to being in work but there is also a sense of getting out what you put in. You also get taxed on that amount just as if it was a wage.
Contrast that with the UK's Universal Credit where if you've been in a well-paid job for 10 years you first have to burn through all your savings before passing the means testing to start claiming, and when you do you get the same amount as someone who has never worked, and you have to pass through a load of frustrating and invasive hoops to keep claiming what you've supposedly been paying for your working life.
Edited by 2xChevrons on Tuesday 11th October 17:49
dmahu said:
That isn’t how it works in the UK. People want the free stuff but expect the rich to pay, where “the rich” equals those earning £1 more than them.
Flippant one liner I know but it’s the truth.
Those who contribute the least tax also tend to demand the most service, expecting others to cover their needs & wants.Flippant one liner I know but it’s the truth.
Edited by Biggy Stardust on Tuesday 11th October 20:18
2xChevrons said:
ant1973 said:
I
However, do people really have an appetite for a larger state if it means that they have to pay higher taxes?
However, do people really have an appetite for a larger state if it means that they have to pay higher taxes?
Edited by 2xChevrons on Tuesday 11th October 17:49
Scandinavian countries have perhaps a better view of themselves as a community, whereas the UK there's often big disconnects between net payers and net receivers.
I would be in favour of a Scandinavian/Northern Europe style approach myself with everyone paying in a decent amount but with decent services/provisions etc.
Sadly, no one really offers it here and I agree with previous posters sentiment that the UK mindset almost splits people in to 2 different classes of people, those that should provide and those that should receive.
Sadly, no one really offers it here and I agree with previous posters sentiment that the UK mindset almost splits people in to 2 different classes of people, those that should provide and those that should receive.
ant1973 said:
It seems to me that there is a genuine appetite to have a bigger state in the UK, largely in the shape of higher spending.
Scandinavian countries are often referred to as good examples of what might be attainable with a larger state.
Naturally, a larger state means higher taxes.
...
I don't think there is that appetite, except among those who don't think they will be paying for it.Scandinavian countries are often referred to as good examples of what might be attainable with a larger state.
Naturally, a larger state means higher taxes.
...
The Scandinavian countries are often used as examples by the left. I think this is because they are an obviously white people in a country that feels close to us, but in truth most of us have no direct experience and have to accept all these claims at face value. Very handy. It is far too late for the UK to set up a Sovereign Fund for the North Sea oil, for example. Sweden's economic miracle is in the headlines when they are doing well, but it all goes a bit quiet when they aren't, etc, etc.
Given the government's Midas touch, I would rather it did less and taxed us less.
roger.mellie said:
Fusion777 said:
I would pay more to get more, yes. Some things are worth paying for. Sadly, "tax" is all too often immediately seen as a negative in this country.
Yip,Tax isn't a burden. Wealthy people thinking they should be able to freeload are a burden.
I have no issue paying more but I want a better outcome not the same service for ever more of a tax bill. Also we tried 10 plus years of Balir an labour everyone gets a degree and yet we still are less productive, under Boris we had highest burden for 70 years and yet NHS still in crisis an now a degree cost 50k for the same outcome
Edited by Gecko1978 on Tuesday 11th October 20:14
roger.mellie said:
Fusion777 said:
I would pay more to get more, yes. Some things are worth paying for. Sadly, "tax" is all too often immediately seen as a negative in this country.
Yip,Tax isn't a burden. Wealthy people thinking they should be able to freeload are a burden.
Andeh1 said:
roger.mellie said:
Fusion777 said:
I would pay more to get more, yes. Some things are worth paying for. Sadly, "tax" is all too often immediately seen as a negative in this country.
Yip,Tax isn't a burden. Wealthy people thinking they should be able to freeload are a burden.
Biggy Stardust said:
The answer is "nonsensical".
Nonsensical isn't an answer dumbass 
I dislike the masters of the universe thinking that people availing of state support are spongers when they avail of it too, just in different ways like tax breaks etc. Some like simple answers, they're simpletons, the rest of us will realise there are complexities on who's the real burden.
roger.mellie said:
Nonsensical isn't an answer dumbass
I dislike the masters of the universe thinking that people availing of state support are spongers when they avail of it too, just in different ways like tax breaks etc. Some like simple answers, they're simpletons, the rest of us will realise there are complexities on who's the real burden.
That singularly fails to address the question.I dislike the masters of the universe thinking that people availing of state support are spongers when they avail of it too, just in different ways like tax breaks etc. Some like simple answers, they're simpletons, the rest of us will realise there are complexities on who's the real burden.
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