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Increased taxation for the older generation?
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Easyrider
Posted: 19 January 2021 11:16:07(UTC)
#407

Joined: 09/11/2020(UTC)
Posts: 1,951

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Going back to the suggestion that retired people should pay NICs, there is a logic to this in the sense that NICs were initially introduced to pay for the NHS and older people are the main beneficiaries of the NHS. Of course we all eventually become old, if we're lucky.
As far as I'm aware NIC contributions are no longer hypothecated to NHS budgets but are channelled into a "general taxation" pool.
Although pensioners are better off than they ever have been, on average, there are still many struggling to make ends meet.
Until recently there were many people employed in the private sector doing important jobs who had no occupational pension arrangements and were therefore dependent on the State Pension and supplementary benefits in retirement.
This was one of the reasons why the Government enhanced the State Pension and introduced auto-enrolment.
The fact that this was introduced by a Conservative administration is impressive IMO.
It would be unfair IMO if a working person retired on the State Pension which I think is £9,110.4 (at least that's what I receive), and a small occupational/private pension, say £5k, giving a total of about £14 and then was hit by a 12% NIC on a significant fraction of that income, as well as paying the standard rate of tax on the excess over £12k a year.
I also support a bonfire of subsidies. One person's subsidy is another's tax. Also a subsidy conceals the real cost of supplying a good or service. If something is free, some people can think it really is free and aren't aware than others have to pay for it. They may also have no idea how much things cost such as basic NHS prescriptions.
Nevertheless I am a strong supporter of the NHS and its public service ethos.
There are two subsidies I would keep however. First,I suggest NHS prescriptions should continue to be subsidised but retired people should pay a standard fee of say £100 a year rather than receiving them "free".
IMO it would be unfair to many old people with multiple health conditions and small retirement incomes to have to pay for an array of medications.
Second, I would keep the bus pass. The marginal cost of this is small given that older people use the buses off-peak when the buses are rarely full, but it enhances their lives enormously.
Better off people tend not to use their bus pass but drive instead.
Interestingly we only use our bus passes when visiting offspring in London. I'm at the age when I enjoy sitting upstairs and looking out a window.
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4 users thanked Easyrider for this post.
ANDREW FOSTER on 19/01/2021(UTC), Tim D on 19/01/2021(UTC), Martina on 19/01/2021(UTC), dd on 19/01/2021(UTC)
Richard T
Posted: 19 January 2021 14:28:43(UTC)
#384

Joined: 25/02/2017(UTC)
Posts: 176
ANDREW FOSTER;147236 wrote:
Richard T;147175 wrote:
There is a (Covid) bill to pay and the obvious solution is to increase income tax,


It is obvious but that doesn't mean the best.

There are a myriad of changes I would make first, for instance:

1) End higher rate tax relief on pension contributions.

2) Set pension contribution tax relief at, say, 15% across the board.

3) Limit ISA contributions to £10K and set a lifetime ISA limit of, say, £250,000

4) Find a way to Road Tax EV's more realistically ;)

5) Increase Airport Passenger Tax

6) Introduce a Tourism overnight tax in hotels, as many countries do.

7) Close a lot of cushy tax loopholes, the Tax manuals are full of them

All these are quite progressive, and have limited effects at the lower end, so most people should be content. It isn't retrospective.

And yes, these would affect me too... ;)


While I agree pretty much with all that, does it fill the hole? Would love to see the numbers crunched.
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Keith Cobby
Posted: 19 January 2021 14:43:28(UTC)
#408

Joined: 07/03/2012(UTC)
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I favour combining NI with income tax then having a flat rate. The VAT base should be widened, renamed Sales Tax, and food etc should no longer be zero rated/exempt. Personal tax allowance, child benefit and other income benefits should be raised to compensate lower income families. Abolish council tax (the most regressive of them all). Finally the BBC paid for by subscription as it is also a hugely regressive tax.
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dd on 19/01/2021(UTC)
ANDREW FOSTER
Posted: 19 January 2021 14:55:25(UTC)
#385

Joined: 23/07/2019(UTC)
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Richard T;147370 wrote:
ANDREW FOSTER;147236 wrote:
Richard T;147175 wrote:
There is a (Covid) bill to pay and the obvious solution is to increase income tax,


It is obvious but that doesn't mean the best.

There are a myriad of changes I would make first, for instance:

1) End higher rate tax relief on pension contributions.

2) Set pension contribution tax relief at, say, 15% across the board.

3) Limit ISA contributions to £10K and set a lifetime ISA limit of, say, £250,000

4) Find a way to Road Tax EV's more realistically ;)

5) Increase Airport Passenger Tax

6) Introduce a Tourism overnight tax in hotels, as many countries do.

7) Close a lot of cushy tax loopholes, the Tax manuals are full of them

All these are quite progressive, and have limited effects at the lower end, so most people should be content. It isn't retrospective.

And yes, these would affect me too... ;)


While I agree pretty much with all that, does it fill the hole? Would love to see the numbers crunched.


I don't know, but to be honest I doubt it. Lets face it, the UK has run a deficit even in the good times so the "hole" is never filled, it just a matter of what a amount of material you want to throw into it.

I guess my point is that there are plenty of measures available before a wealth tax or increased income tax is introduced and that would have general if grudging approval from across the spectrum. The high rate pension tax relief is such an obvious one to me..

There are other steps that might be less popular, such as an end to EV government contribution that is doing nothing but distort a marketplace.

Might also look at reducing working tax credits and increasing minimum wage a bit.

There are hundreds of measures that might be taken, including REDUCING corporation tax to encourage investment, jobs and hence reduce the benefit bill.

I can't offer numbers sorry, but too many of such choices are currently ideological rather than fiscal.
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Richard T on 19/01/2021(UTC)
Richard T
Posted: 20 January 2021 19:54:33(UTC)
#409

Joined: 25/02/2017(UTC)
Posts: 176
A side note on tax benefits for the rich... Many may not be aware that works of art are eligible for a reduced rate of import VAT - 5%. So if you decide to spend £500,000 on a nice Basquiat drawing at one of the New York auctions and bring to to London you will pay £25,000 on import to the UK. If you spend the same amount on, say, one of Eric Clapton's guitars at another auction that day, you will have to pay £100,000 tax on import.

Put another way, person A pays as much VAT on a non-art import costing £5,000 as person B does on an artwork costing £20,000.
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2 users thanked Richard T for this post.
Tim D on 20/01/2021(UTC), Easyrider on 27/01/2021(UTC)
Tim D
Posted: 20 January 2021 20:54:24(UTC)
#410

Joined: 07/06/2017(UTC)
Posts: 8,883
Richard T;147668 wrote:
A side note on tax benefits for the rich... Many may not be aware that works of art are eligible for a reduced rate of import VAT - 5%. So if you decide to spend £500,000 on a nice Basquiat drawing at one of the New York auctions and bring to to London you will pay £25,000 on import to the UK. If you spend the same amount on, say, one of Eric Clapton's guitars at another auction that day, you will have to pay £100,000 tax on import.


Alternatively (assuming you bought both of them as investments and didn't actually want to hang them on your wall or play the guitar), stash both of them in a freeport and don't pay any import duty at all. Then it can be traded around owners without anyone paying any more duty and become another part of someone's shady "offshore" assets.
Interesting reads at
https://www.artacacia.co...-choice-for-storing-art
https://www.artsy.net/ar...rgins-global-art-market
on how important freeports are to art investors.
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Bulldog Drummond
Posted: 27 January 2021 22:49:39(UTC)
#411

Joined: 03/10/2017(UTC)
Posts: 6,253
Tim D;147681 wrote:
Richard T;147668 wrote:
A side note on tax benefits for the rich... Many may not be aware that works of art are eligible for a reduced rate of import VAT - 5%. So if you decide to spend £500,000 on a nice Basquiat drawing at one of the New York auctions and bring to to London you will pay £25,000 on import to the UK. If you spend the same amount on, say, one of Eric Clapton's guitars at another auction that day, you will have to pay £100,000 tax on import.


Alternatively (assuming you bought both of them as investments and didn't actually want to hang them on your wall or play the guitar), stash both of them in a freeport and don't pay any import duty at all. Then it can be traded around owners without anyone paying any more duty and become another part of someone's shady "offshore" assets.
Interesting reads at
https://www.artacacia.co...-choice-for-storing-art
https://www.artsy.net/ar...rgins-global-art-market
on how important freeports are to art investors.


Very true. There is some very dubious money floating around in the art world.
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Richard T
Posted: 28 January 2021 11:25:00(UTC)
#412

Joined: 25/02/2017(UTC)
Posts: 176
Bulldog Drummond;148850 wrote:

Very true. There is some very dubious money floating around in the art world.


While that may be true, European galleries at least now have to follow strict AML rules. Most buyers are wealthy individuals who want to decorate their (often multiple) homes with nice objects, impress their friends, and simultaneously diversify into the art asset class. They are quite diverse themselves - industrialists, landed gentry, financiers, doctors, lawyers, entrepreneurs, etc., and often knowledgable collectors. Sometimes nice people, sometimes really not.

The really salient point for me in terms of a one-off wealth tax is that you can walk into many, many homes in the UK (particularly London, of course) and find millions of pounds worth of modern and contemporary art on the walls, on table tops, in the garden. Then, of course, there is the old masters and antiquities trades, and so on. There is no shortage of real wealth in the UK. I think some on this forum think they are wealthy...
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1 user thanked Richard T for this post.
Tim D on 28/01/2021(UTC)
anglo29
Posted: 09 February 2021 15:17:38(UTC)
#414

Joined: 04/12/2015(UTC)
Posts: 779
Richard T;148913 wrote:
Bulldog Drummond;148850 wrote:

Very true. There is some very dubious money floating around in the art world.


While that may be true, European galleries at least now have to follow strict AML rules. Most buyers are wealthy individuals who want to decorate their (often multiple) homes with nice objects, impress their friends, and simultaneously diversify into the art asset class. They are quite diverse themselves - industrialists, landed gentry, financiers, doctors, lawyers, entrepreneurs, etc., and often knowledgable collectors. Sometimes nice people, sometimes really not.

The really salient point for me in terms of a one-off wealth tax is that you can walk into many, many homes in the UK (particularly London, of course) and find millions of pounds worth of modern and contemporary art on the walls, on table tops, in the garden. Then, of course, there is the old masters and antiquities trades, and so on. There is no shortage of real wealth in the UK. I think some on this forum think they are wealthy...



With reference to your second para. These are the very people who are "protected" by the establishment
whose real definition of "wealthy" means middle class folk who find, through no fault of their own that the modest house they bought 30 years ago has now rocketed in many cases to crazy valuations above £500,000. while their income remains nothing special.

The really wealthy, including the thousands of foreign oligarchs using the London property market to "launder" their millions, will always have ways of circumventing around any new tax rulings.
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huudi
Posted: 09 February 2021 16:45:40(UTC)
#415

Joined: 11/06/2010(UTC)
Posts: 266
"the modest house they bought 30 years ago has now rocketed in many cases to crazy valuations above £500,000. while their income remains nothing special."

At that price you still only get a claustrophobic hovel, the size and quality is inversely proportional to the price. The reason? Deliberate overcrowding, a policy started by 'New Labour' and adhered to by subsequent government, if the boom stalled then interest rates were lowered to restart it.

There was no reason for this other than to make a few rich much richer.

The downside is that indigenous working population pay for this, both in hard cash and in seeing the destruction of their country.

Maybe if they had simply taken our surplus cash and simply given it to the idle rich then they might have left well alone. But I doubt it, the rich have always robbed the poor since time immemorial.
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