So What Is Fair?

[Oh Dear]

This week, as a 'just into the 40 pence tax bracket person' (by £50) with a wife and two children that I support in our society, I will (or expect to) be losing Child Benefit, WFT credit and Childcare Benefit. This will reduce our family income by about £200 per month. It is a significant amout but, to be honest, affordable but painful.

How much are you willing to sacrifice in order to get the national debt down?

If it is to be compensated by a reduction in nominal house prices I am more than happy. However, if I am still to be outbid for a family home by a BTL landlord who had the fortune to be born just a few years before me (at no fault of my own) I will be very annoyed. Bring on the spending review.

What are your thoughts?

[Traktion]

I (or my other half) don't receive nor qualify for (afaik!) any benefits, os I'm not sure what I can sacrifice, other than some more of my hard earned with higher taxes.

I suppose I could live with coughing up more tax, but it feels like I pay plenty of that already, considering how little I am given back.

Edited October 6, 2010 by Traktion

[Kyoto]

If it is to be compensated by a reduction in nominal house prices I am more than happy. However, if I am still to be outbid for a family home by a BTL landlord who had the fortune to be born just a few years before me (at no fault of my own) I will be very annoyed. Bring on the spending review.

What are your thoughts?

Similar thoughts.

I wouldn't squeal too much if my tax bill went up by 10% tomorrow, IF and only IF they took radical steps to move to a fairer society that discouraged parasitic behaviour against both those same tax funds, and us as a broader society.

This would mean an end to industry bailouts, BTL, bank charges, highly paid public sector managers, car clamping firms, ambulance chasers, benefit abusers, education as a business, VIs, quangos......

I would also be willing to pay more tax if the government announced an enormous programme of capital investment projects - infrastructure or the building of vast swathes of council housing.

What I don't want is to foot the bill and just have it pissed up the wall to maintain the status quo.

Edited October 6, 2010 by Kyoto

[Si1]

that measure was only clumsily said in order to deflect attention away from cuts on the poor

they will introduce some kind of smoothign to make sure you are not hit so hard (I hope) - it is not legislation...yet

either that or ask your employer for a salary sacrifice benefit of some kind, increased pension contribution being the most obvious, and then magically you are no longer in that tax bracket...

[Cinnamon]

What are your thoughts?

That until 2013 we will have our ears chewed off by people who are (rightfully) complaining about this new tax on children. (CB removal = tax raise of 4%+ = penalty for having kids and being married = applied stupidity... etc)

That £44k being in the top 10% of income means that the UK is actually a nation of overtaxed paupers.

That given the vast sums outstanding, no amount of sacrifice will stop Britannia from supinely sinking into the debt.

That moving away from the UK is a good idea for anyone who has plans to have a life in future.

[porca misèria]

This week, as a 'just into the 40 pence tax bracket person' (by £50) with a wife and two children that I support in our society, I will (or expect to) be losing Child Benefit, WFT credit and Childcare Benefit. This will reduce our family income by about £200 per month. It is a significant amout but, to be honest, affordable but painful.

How much are you willing to sacrifice in order to get the national debt down?

If it is to be compensated by a reduction in nominal house prices I am more than happy. However, if I am still to be outbid for a family home by a BTL landlord who had the fortune to be born just a few years before me (at no fault of my own) I will be very annoyed. Bring on the spending review.

What are your thoughts?

Increase your pension contributions / charity contributions / any other tax-deductables by £50, plus a margin of safety.

Agree, as someone with a substantially higher income, I'd have no problem giving a significantly higher proportion of it ... if in return they'd remove support for house prices so I could afford one.

[david m]

My wife is in the 40% tax bracket and I'm in the 50% bracket. With our tax bill well into six figures, I'm not keen to pay anything more even if we can afford it.

I wouldn't mind seeing some taxes changed (income tax and CGT set at same level), property or land tax introduced for example. However, I think the overall tax burden on the population is way too high. We need to cut costs not increase taxation.

Personally, I don't seem to get any more back despite an increasing tax take each year. I'm considering either leaving the UK or utilizing an EBT to reduce my tax footprint. Frankly I feel like a mug to have paid this much tax to Labour all these years ...

[Timm]

I think the coalition have got it about right.

I wish the newspapers would go back to reporting the news, instead of wailing in support of their target reader.

The fact is: Everyone is going to realise they are poorer than they thought.

[RufflesTheGuineaPig]

My wife is in the 40% tax bracket and I'm in the 50% bracket. With our tax bill well into six figures, I'm not keen to pay anything more even if we can afford it.

Just get your wife to ask her boss to drop her wage a fraction and give her an extra 1/2 days holiday instead... with next years pay rise in the form of extra holidays.

I feel like I should be on MSE!

[Self Employed Youth]

100%+ I will stop claiming all benefits, begin working and pay income tax again. I ask that working tax credits are open to single people under 25. To not have to pay income tax on levels lower than the level of benefits I'm legally entitled to. And for an allowance to be made for travel to work costs and a few beers.

[Pauly_Boy]

I think the coalition have got it about right.

I wish the newspapers would go back to reporting the news, instead of wailing in support of their target reader.

The fact is: Everyone is going to realise they are poorer than they thought.

agreed, I also wish all poor suffering people who only earn £44k would sftu. Yes it sucks that you'll lose CB, but I'm on of the many people who get NOTHING and are paying for these handouts!

Edited October 7, 2010 by Pauly_Boy

[olliegog]

as far as i can see, child benefit is just like another public sector job, but it's a wage you manage to get for having shagged someone and gotten them up the duff? how is it any different for the middle classes than it is when we read about some doley who has them to increase her own 'salary'?

family isn't a civil service job, the population's more than back from the reduced numbers from WW2. noone has a family because of patriotism... you do it because you find someone you want to procreate with... that children are now reduced to a financial perk by the middle classes is interesting to hear. i appreciate it costs but who knocked on your door and begged you to take it on?

okay, 42k isn't brilliant but it's still £120 a day after tax and, if you have one parent at home it's presumably through choice?

never understood the idea of getting taxed then expecting some of it back... you should be getting it back socially. in: new schools, filled potholes, more public transport, better teachers, susidised basics... that's your return... not branded trainers for the kids, colour tv in the bedroom and jamster downloads on the mobile phone...

from each according to his ability, to each according to his need...

red maz

have to agree with most of that. I wish the Govt would stop pussyfooting around the VIs and 'vulnerable groups' and tell it like it is. We all have to suffer with a bit of belt tightening - after the party and all that.

[waferthin]

'just into the 40 pence tax bracket person' (by £50)

Should you not ask for a pay cut of £51?

Arbitrary cut off points are annoying - its the same with Stamp Duty, just no logic to it.

[non frog]

......

What are your thoughts?

If you work out how much is needed to actually start paying off debt it is so huge it will stop the economy dead. The pussyfooting around that was proposed is a p1ss in the ocean and even that now is too much and will see hordes of Range Rover driving yummy mummies on the streets with Socialist Worker placards demanding their handout back.

The present government has put forward a target of bringing the structural deficit to zero in one term. So that's not the deficit but some made up figure that is "structural" the definition of which is flexible. The IMF think that is too ambitious and the Tories agree (see this morning's FT).

I don't think anyone is prepared to pay the true price. The greedy old boomers with their gold plated pensions certainly are not. Big companies and rich people are already refusing the tax increases that are mathematically required if the objective is to be realised. At a time when taxes need to go up Dave has given away billions on corporation tax.

Even if the government achieve their target (they will not) the UK will be over the critical 90% of GDP debt level within this parliament. The pain, such as it is, will last another 20 years or more. By then half the UK (me included) will be demanding our pension handouts.

This will not end well.

[DabHand]

I literally get nothing from the central government and overpay for those services provided via my council tax (police, bins and roads/lighting). I got no kids, no house, no health issues (well none l cant self medicate), no grants/subsidies or debts and a job where l am directly competing with cheap offshore labour and thus only ever have about 3 months as my employment security horizon.

I got nothing to give.

Edited October 7, 2010 by DabHand

[Peter Skellan]

I paid £33,000 in income tax last year and my employer paid £13,000 in NI tax to employ me.

Now they want to take away my child benefit.

OK.

Guess what - I'm moving out of my household and living in my second property. My household that contains children no longer contains a higher rate tax payer. Bingo bango banjo - £1750 a year tax free money (for two kids) back on. Oh, and a 25% drop in council tax on the band G place. Another £600 a year

That's the Golf Club membership fees covered then.

PS

Edited October 7, 2010 by Peter Skellan

[hayder]

Whatever cuts are implemented, they are too little too late. Even a small step like the child benefit has created an uproar (even though CB for a higher rate tax payer is a marginal amount at best). Imagine what would happen if the doleites / pensioners get the chop... there'd be a revolution with a couple of million "disabled" storming parliament!

In truth Britain has no other path than to:

MOD:

-Eliminate Trident Replacement

-Keep only one Aircraft Carrier

-Sell off as many RAF Typhoons as possible to the Saudis and keep tornados flying a while longer

-Withdraw the UK from any "international operations" where the UN, US or someone else is not paying for the presence of UK troops.

Benefits:

-Eliminate all benefits for people who never paid into the system (churches / charities / salvation army are there to give them temporary housing and food kitchens)

-Increase the retirement age to 70, and cancel all the various gold plated pension schemes to a single universal pension for state employees, which should be low.

-Eliminate housing benefit / mortgage payment to the unemployed, and if there's any homelessness, give out the old army barracks to the church, salvation army and other charities to use to temporarily house the homeless.

NHS/Universities/Schools

-Reduce doctors pay to the "average" salary of other similar professionals in Europe

-Do the same to nurses

-Fire all the extraneous admin muppets

-Bring GPs back under NHS pay and slash it.

-create a "visit charge" of 10 pounds for all visits to the NHS by patients.

-Limit research funding to only the best universities and slash 100% of state funding for any of the frivolous courses at the polys

Taxation:

-Eliminate all the silly tax credit systems that benefit only sweatshop operators (tesco etc...)

-Bring the threshold for income tax to 10k to make it worthwhile for people to work on minimum wage

-simplify the tax system for PAYEs, Self Employed and corporations.

-Match the Corporate tax rates offered by the new EU states in order to attract inward investment to the UK

and I'm sure there's plenty of other stuff you can cut like the out of control "legal aid" system, state sponsored Quangos etc....

Perhaps if the UK's "benefits" budget is reduced by 60%, defence budget by 40%, Health and education by 40%, legal aid by 70% etc... then the UK, may just start to BEGIN paying down some of the debt....

Compared to the above, child benefit really is the tiny tip of a huge iceberg.

good thing is that houses will be more affordable, companies will be attracted to the UK's low tax + low cost environment creating more jobs, and with teh benefits rung taken away , a savings culture among the working can be implemented. The unemployed will suddenly find the urge to get jobs again, weakening the wage demands of the average worker (which will attract more inward investment).

Edited October 7, 2010 by hayder

[SomethingHasToGive]

Whatever cuts are implemented, they are too little too late. Even a small step like the child benefit has created an uproar (even though CB for a higher rate tax payer is a marginal amount at best). Imagine what would happen if the doleites / pensioners get the chop... there'd be a revolution with a couple of million "disabled" storming parliament!

The numbers here are not right, but it shows how much of a problem it is.

Assuming our debts are over a trillion pounds ( 771.6 billion + PFIs ), our deficit is 162billion and we have 30 million taxpayers, the rest being not significantly economically active ( unemployed, in education, retired etc ).

Our government has debt worth about £66k per taxpayer, this increasing at £5400 per year. That is pretty nasty

People earning £44k are complaining about child benefit at about £1000, when ( assuming taxs are raised in proportion to income ) they are going to be losing something like £10k worth of services, benefits and income if/when we remove the deficit.

The maths doesn't work... every has to pay off the equivalent of a second mortgage if we are to sort this out. But sorting out the deficit is like an IO mortgage, we still need to pay back the money, or we're screwed if our revenue collapses or our credit rating goes down and we need to refinance our debts.

Is there a way out of this?

The least painful way that I can see is mass systemic inflation. Unfortunately this will reward the irresponsible behaviour that caused this mess.

Edited October 7, 2010 by SomethingHasToGive

[xux42]

In truth Britain has no other path than to:

MOD:

-Eliminate Trident Replacement

-Keep only one Aircraft Carrier

-Sell off as many RAF Typhoons as possible to the Saudis and keep tornados flying a while longer

-Withdraw the UK from any "international operations" where the UN, US or someone else is not paying for the presence of UK troops.

Benefits:

-Eliminate all benefits for people who never paid into the system (churches / charities / salvation army are there to give them temporary housing and food kitchens)

-Increase the retirement age to 70, and cancel all the various gold plated pension schemes to a single universal pension for state employees, which should be low.

-Eliminate housing benefit / mortgage payment to the unemployed, and if there's any homelessness, give out the old army barracks to the church, salvation army and other charities to use to temporarily house the homeless.

.

.

.

Yeah but -

Doing all this and sustaining it would eventually see the balance of payments overshoot leaving us with a trade surplus, growth, massive opportunities for entrepreneurs and people with scarce skills and millions of people completely left out.

I would probably benefit from this and so would my lads.

But I don't want it. As a programmer I had a massive leg up in the 80s while many I know remained unemployed, underemployed or chronically skint.

I don't want an unfair advantage, I want justice - a level playing field with rewards based on merit, not who you know, when you were born, the point in an economic cycle and all that other crap which seems to control/pervert people's fortunes.

After about 5000 years of civilisation we should not still be straws in the wind.

Good to get that off my chest.

[RufflesTheGuineaPig]

The maths doesn't work... every has to pay off the equivalent of a second mortgage if we are to sort this out. But sorting out the deficit is like an IO mortgage, we still need to pay back the money, or we're screwed if our revenue collapses or our credit rating goes down and we need to refinance our debts.

It gets better. If you include government unfunded pension liabilities it's £5trn

Is there a way out of this?

No

The least painful way that I can see is mass systemic inflation. Unfortunately this will reward the irresponsible behaviour that caused this mess.

That's agreat idea, with one minor problem. Wages are FALLING.

Wages can't rise because of competition from the far east where lower house prices mean lower costs which means people can afford to work for less.

And to cap it all we are dependant upon oil and gas imports.

[xux42]

Is there a way out of this?

Yes.

It will happen planned or unplanned and it will be awful.

Doing everything Hayder proposes quickly would work, but it would look like Dante's Inferno come to life.

[Pezerinno]

I think war is the only way so you may as well enjoy life while you can.

[alexw]

The numbers here are not right, but it shows how much of a problem it is.

Assuming our debts are over a trillion pounds ( 771.6 billion + PFIs ), our deficit is 162billion and we have 30 million taxpayers, the rest being not significantly economically active ( unemployed, in education, retired etc ).

Our government has debt worth about £66k per taxpayer, this increasing at £5400 per year. That is pretty nasty

People earning £44k are complaining about child benefit at about £1000, when ( assuming taxs are raised in proportion to income ) they are going to be losing something like £10k worth of services, benefits and income if/when we remove the deficit.

The maths doesn't work... every has to pay off the equivalent of a second mortgage if we are to sort this out. But sorting out the deficit is like an IO mortgage, we still need to pay back the money, or we're screwed if our revenue collapses or our credit rating goes down and we need to refinance our debts.

Is there a way out of this?

The least painful way that I can see is mass systemic inflation. Unfortunately this will reward the irresponsible behaviour that caused this mess.

Paying down the debt is like fools gold.

We live in a debt based monetary system.

Did you know total uk debt (corporate/personal/government) has never ever decreased.

All you can do is shift the debt around abit so you change who holds it.

The recent increase in government debt is mostly this. A change in who takes on the new debt. So as citizens deleverage government debt increases.

[easy2012]

This week, as a 'just into the 40 pence tax bracket person' (by £50) with a wife and two children that I support in our society, I will (or expect to) be losing Child Benefit, WFT credit and Childcare Benefit. This will reduce our family income by about £200 per month. It is a significant amout but, to be honest, affordable but painful.

How much are you willing to sacrifice in order to get the national debt down?

If it is to be compensated by a reduction in nominal house prices I am more than happy. However, if I am still to be outbid for a family home by a BTL landlord who had the fortune to be born just a few years before me (at no fault of my own) I will be very annoyed. Bring on the spending review.

What are your thoughts?

The Child benefit change is really bizarre. Not just the 44- 87k that the media highlighted, as it stands, it looks like you can be a non dom (err.. Lord Ashcroft), with a small amount of UK earning (and hence not 40% tax payer) but million of overseas earning / capital repatriation and yet family still qualify for CB.

As some other posters have said - there are several ways to avoid it - pension contribution, work less, salary sacrifice etc. Think CB change will not come into effect as announced.

As for how much sacrifice - yap, it depends how fair it will be, and what are done to prevent future abuses. If I pay lot of taxes and serious criminals get in front of me in an NHS queue type of system, I would be reluctant to cough up more. Further, the waste in public sector and EU remain staggering.. get that sorted and (1) the government will find that is needs a lot less (2) more people will be willing to pay a bit more.

Edited October 7, 2010 by easybetman

[SomethingHasToGive]

That's agreat idea, with one minor problem. Wages are FALLING.

Wages can't rise because of competition from the far east where lower house prices mean lower costs which means people can afford to work for less.

And to cap it all we are dependant upon oil and gas imports.

I don't think wages falling is a particularly big problem for this plan. Low wages = competiveness. High wages = pay tax back quicker. I suspect it would increase the gap between rich and poor though.

Oil and gas imports, perhaps the increase in sustainable energy generation is an attempt to cushion this. If so I don't think that it will work. Also they might be hoping that Falkland Island oil is as lucrative as North Sea Oil.

After all the debt bubble can't be burst without banks failing. This would result in significant amount of people losing all of their money and complete chaos everytime it happened.

I really don't like this idea, it seems completely underhand and dirty, but i think it must be the government and the BoE's plan to save us. Haven't they been doing this for the last 2 years?

I'd also like to know whether George Osbourne or Mervin King is buying gold...