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Post by bracknellboy on Jul 28, 2021 13:37:08 GMT
Being a higher earner and having a DB pension is a nightmare that the average man in the street would love to have. As I said before, it’s not a race to the bottom. You can’t improve the wealth/life of the average person by bringing down the top.But that's not actually true is it ? Its called redistribution. At any given time there is a fixed amount of GDP (ok, so that's a shorthand, but lets call it fixed amount of GDP + Borrowing which must be paid for from future GDP). Even as a very simple and narrow example, you could increase the amount spent on a particular part of the economy, e.g. by lets say raising the %age of GDP which is spent on health via NHS spending. At the two ends of the spectrum, you could choose to either use the extra money solely to increase salaries of those there and keep headcount the same, or use it solely to increase actual resources deployed (people and physical in terms of increasing the number employed and e.g. equipment investment). In the former the 'health wellness' output would remain static, and in the latter the total 'health wellness' output should increase. Therefore the 'life' of the general population who benefit from the output would be enhanced in the latter case through better health outcomes, at the expense of not increasing the individual 'wealth' of those employed. Or alternatively, for a fixed wage bill you could choose to reduce the amount paid to the highest earners - who will be in the small minority - and redistribute to lower earners. That would increase the wealth/life of the higher number of lower earners and in effect narrow the gap a bit. I'm not advocating any of that as policy: I am highlighting the point that all pay and wealth is relative, and to say you can't improve the wealth/life of the average person (lets say the 'majority' so we don't get hung up on what is meant by 'average') by bringing down the top is self-evidently incorrect.
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hazellend
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Post by hazellend on Jul 28, 2021 14:33:40 GMT
As I said before, it’s not a race to the bottom. You can’t improve the wealth/life of the average person by bringing down the top.But that's not actually true is it ? Its called redistribution. At any given time there is a fixed amount of GDP (ok, so that's a shorthand, but lets call it fixed amount of GDP + Borrowing which must be paid for from future GDP). Even as a very simple and narrow example, you could increase the amount spent on a particular part of the economy, e.g. by lets say raising the %age of GDP which is spent on health via NHS spending. At the two ends of the spectrum, you could choose to either use the extra money solely to increase salaries of those there and keep headcount the same, or use it solely to increase actual resources deployed (people and physical in terms of increasing the number employed and e.g. equipment investment). In the former the 'health wellness' output would remain static, and in the latter the total 'health wellness' output should increase. Therefore the 'life' of the general population who benefit from the output would be enhanced in the latter case through better health outcomes, at the expense of not increasing the individual 'wealth' of those employed. Or alternatively, for a fixed wage bill you could choose to reduce the amount paid to the highest earners - who will be in the small minority - and redistribute to lower earners. That would increase the wealth/life of the higher number of lower earners and in effect narrow the gap a bit. I'm not advocating any of that as policy: I am highlighting the point that all pay and wealth is relative, and to say you can't improve the wealth/life of the average person (lets say the 'majority' so we don't get hung up on what is meant by 'average') by bringing down the top is self-evidently incorrect. It’s true to an extent. But with a 60% tax rate between 100 - 125k many people are choosing to reduce hours or turn down extra work as the net pay is not worth it. For some jobs that doesn’t matter but in shortage areas, like senior doctors, it’s a problem. The pension issues are also causing people to reduce hours or retire early. Personally I think taxes have been increased almost to the limit of the laffer curve.
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keitha
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Post by keitha on Jul 28, 2021 16:36:26 GMT
One thing that perhaps should be thought of is NI and changing the Bands At the moment between £9568 and £50270 a year you pay 12% NI, Over 50270 2% Tax is 20% From £12,570 to £37,700 and 40% up to £150,000 So Joe earns £40K Nicola earns £100k Joe pays 33% of his taxable income in tax and NI 22.8% of total income Nicola Pays 38% of her taxable income in tax and NI or 33% of total income More Interesting is To Look at Europe The UK Top rate of 45% kicks in at 3.6 times average earnings £150k Belgium 52.9% at 1.1 times average earnings €52,848 Denmark 55.9% at 1.3 times average earnings €77,429 Germany 47.5% At 5.4 times average earnings €282,934 of course I don't know what our European friends pay in other taxes ie do they have an equivalent to NI. but Slovenia (61.1 percent), Belgium (60.2 percent), and Sweden (60.2 percent) had the highest top marginal income tax rates This stats.oecd.org/index.aspx?DataSetCode=TABLE_I6 has some interesting stats
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littleoldlady
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Post by littleoldlady on Jul 28, 2021 16:52:16 GMT
Tax is 20% From £12,570 to £37,700 and 40% up to £150,000 So Joe earns £40K Nicola earns £100k Joe pays 33% of his taxable income in tax and NI 22.8% of total income Nicola Pays 38% of her taxable income in tax and NI or 33% of total income s But when Nicola gets a pay raise she will pay a marginal rate of 60% (due to the withdrawal of personal allowance)
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keitha
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Post by keitha on Jul 28, 2021 17:15:42 GMT
AH but Joe is probably losing benefits at the same or a faster rate
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littleoldlady
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Post by littleoldlady on Jul 29, 2021 7:26:21 GMT
AH but Joe is probably losing benefits at the same or a faster rate Should someone on £40k be getting benefits?
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keitha
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Post by keitha on Jul 29, 2021 8:34:07 GMT
you'd be surprised
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