[Closed] Has the time come for 2-5p increase in base rate income tax?

all the things i really want, need public investment.

i want: better schools, hospitals, transport, national parks, environmental protection, etc.

from a selfish point of view, i want to pay more taxes.

I look at the state of this country

- ever worsening road conditions
- the NHS is falling apart and set to get worse ( http://www.bbc.co.uk/news/health-38887694)
- councils struggling to make ends meet

This list goes on and on. Is it not time that successive governments stopped giving tax reducing sweeteners and made the decision to raise the basic rate income tax?

I completely agree, and I would be happy to pay that, if it meant improving the NHS and other services, and better environmental regulation. However, good luck at the next election to any Government who does it (which is probably why they haven't done).

I'd happily pay more tax if I was confident it wouldn't go towards buying pensioners votes and keeping the banks in business.

As above really.
Too much Me! Me! Me! in the electorate I'm afraid for people to consider voting for taxation.

APF

+1 for Jam bo

However, good luck at the next election to any Government who does it (which is probably why they haven't done).

Maybe a gov petition should be started to that affect stating that those who have signed are happy to have an increase in income tax, provided xyz.

The problem is you can throw all the money you like at the NHS, but until stuff like PFI(2), shitty procurement deals and outsourcing to private companies at greater costs is dealt with it's just not going to help in the long run.

...also, as per jambo.

Short-termism is the death of progressive policy.

Yep, tax should be increased - the 40% tax should be raised as anyone on 40% can afford 2% more. It should somehow be ring-fenced though otherwise it will get swallowed and used for things I wouldn't want it used for.

1% could go on NHS
1% could go on elderly care

It's the fundamental problem with politics and politicians (mostly). They want to be elected, so will say what the public wants to hear in order to win power. Any political party that says they're going to raise taxes is on to a loser, end of. Even though is plainly obvious that we need more spending, Joe Public thinks there's a never ending pot of cash because "I've been paying in for 30 years" 🙄

We need more spending, not less. But we need to spend money that actually exists!

Say it quietly, but the Lib Dems had 'a penny more on income tax' as one of their key policies for many years...before they joined the coalition...

I'd be all for it, I think a 2% rise for all those earning over £20,000 (including 40% to 42% increase) would do the job.

What would do the job even better though would be to get Starbucks et al to pay their 'fair share' of UK corporation tax.

Here's another idea whilst we're at it...why don't we take the £350 bazillion a week we won't be paying to the EU and spend it on the NHS????? 🙄

Nope, the time has come for the Govt to spend our money more wisely and often not to spend it at all.

FWIW I've worked in both central Govt and the NHS (along with the private sector) - so seen waste from all sides.

[I]I'd be all for it, I think a 2% rise for all those earning over £20,000 (including 40% to 42% increase) would do the job.[/I]

So practically everyone then, since minimum wage (for over 25's) will be nigh on £16k in April.

Maybe we could have a two tier system? Those who don't think we are taxed enough could pay an extra 5%.

Everyone is in favour of better services. Most don't want to pay more tax when actually voting in an election. Or else a party with a tax raising manifesto would be elected.

 

The problem is you can throw all the money you like at the NHS, but until stuff like PFI(2), shitty procurement deals and outsourcing to private companies at greater costs is dealt with it's just not going to help in the long run

My Brothers an accountant in the HHS. October is when he says it's going to go bust, in England anyway.

My answer is no, the extra money will just disappear without giving any extra value. There is massive waste in government spending, pouring good money after bad is not the solution.

What we need is a new kind of leader to shake things up, he might have small hands, but they would be beautiful, so beautiful that they would seem like the biggest hands; wonderful hands even, so amazing they would just take away all your concerns, it will be amazing, incredible even, you'll see...

Provided they abandon the triple lock and stop bribing pensioners with our money, sure.

Oh yes I would be more than happy to give an extra £50 a week in taxes ,as long as it helped fund the 50" tv brigade in Blackpool fund their 8 different coloured children and pay for more Regal kings sized. Maybe even adding a little toward Johnny shitkicker get over his tyre kicking habbit.

How about capping what the halfwits in Parliament can claim for ,that should free up a few quid eh

You are Paul Dacre and I claim my £5.

As above - throwing money at a broken institution is not going to help, NHS being a prime example.

It won't happen, not whilst Chairwomen May is in charge, God won't let her.

It's not how it works anyway, we're at .25% base rate to try to preserve spending, they're not going cut it by 2-3%.

A50 will be triggered soon, that much is certain sadly - the chancellor has already said austerity plans are going out the window - any new public spending will be funded with national debt, not taxation - we'll pay it off when we're booming again (or rather won't, it'll be kicked down the road again).

The NHS has a funding problem, because they want it to have one - it's about to get royally ****ed and even more privatised to secure a "good" trade deal with the US to 'prove' May was right all along. 65 Million people, having their future and health put at risk, to try to secure a full term for an unelected Prime Minister.

In 10 years’ time, when the NHS is like NHS dentistry, a much smaller service to help the poor, young and old and we're all paying £100s a month for insurance, remember, we did all this, because the Tories couldn't live with the UKIP threat and Labour couldn't mobilise to offer any meaningful opposition.

b r - Member
I'd be all for it, I think a 2% rise for all those earning over £20,000 (including 40% to 42% increase) would do the job.

So practically everyone then, since minimum wage (for over 25's) will be nigh on £16k in April.

1.Yes it would affect a lot of folk.

2. Min wage is not set as an annual salary, millions of part-timers earn less than your plucked from the air 16K, and are not part-time out of choice, they would prefer full-time work (or a non-zero hours contract) but can't get one.

Any extra tax we paid now would just go towards funding the massive fiscal disaster that Brexit will become.

I'm totally for this. However, in addition I want to see HMRC close the loopholes that allow corporations and wealthy individuals to opt out of the tax system.

Perhaps closing loop holes and ensuring corporate tax is paid would be better than taxing the working man?

Tax is not the issue. The countries tax intake is at an all time high - or just about to hit an all time high, and it is still not enough. When are we going to realise we need to re-structure/reform many of our old and outdated institutions that are not fit for purpose in the modern world. The NHS is one, the benefits system (which costs us more than the NHS) is another. Until we sort out these institutions that are just sinking tax payers money with no real improvements, then things will never improve.

Something like a half of our spend is on the NHS and benefits, a good chunk of the other half is on our pensions liabilities and everything else, education, defence, police infrastructure maintenance (forget improvements) etc. has to try to jossle for a share of the scraps.

People talk about austerity as if there is a viable or real alternative option for us.

We're a rich and successful country, we're just mismanaging it.

mattyfez - Member
As above - throwing money at a broken institution is not going to help, NHS being a prime example.

but this winters NHS problems are because of cuts to local councils that have resulted in these unprecedented levels of bed blocking and the choking of the system.

reforms to the whole model are needed but 'austerity' is a con in many ways, see also sure start centres etc

Raising income tax by, say 2% won't increase total revenue by 2% though. You'll just have less to spend. Most of what we earn eventually goes to the treasury; you buy something and pay VAT, the shop pays tax on its profits, the staff pay tax on their wages and so on. So there is an argument for decreasing income tax to boost spending and the economic growth.

wobbliscott - Member
...Something like a half of our spend is on the NHS and benefits...

are you talking about this:
[img] [/img]

?

because it's wrong. it includes public sector pensions in the large chunk called 'welfare'.

BTW the NHS isn't broken, it works fairly well. It can seem a bit bureaucratic at times, but most large organisations are.

What it suffers from is being a political pawn and if you think their procurement is wasteful, try being a 120bn a year turn-over ‘business’ employing 1.4 million people that has to change it’s plans every 3-8 years when the next guy comes along who thinks He or She knows best (or rather wants to further their own goals by saying it).

If Westminster really wanted a efficient, well run NHS, they should give it a % of GDP, taxation or whatever that befits our needs for healthcare - set it for 10 years, and **** off and leave it to provide our healthcare, not micromanage it for political gain.

BTW the NHS isn't broken, it works fairly well. It can seem a bit bureaucratic at times, but most large organisations are.

+1

All organisations are inefficient, the larger they are the more so. No way to really avoid it. Privatisation just adds in larger inefficiencies (profit for share holders)....

[i]Min wage is not set as an annual salary, millions of part-timers earn less than your plucked from the air 16K, [/I]

£7.50 per hour for a full-time employee is £15,600

[url= https://c1.staticflickr.com/9/8512/8361851095_818227afbb_b.jp g" target="_blank">https://c1.staticflickr.com/9/8512/8361851095_818227afbb_b.jp g"/> [/img][/url][url= https://flic.kr/p/dJUF1t ]Benefit spending breakdown 2011-2012[/url] by [url= https://www.flickr.com/photos/brf/ ]Ben Freeman[/url], on Flickr

Love that pie chart, specifically the monster slice that is national debt interest.
What we need to do is forget red/blue bickering and accept we've collectively f'd up. Accept ~5yrs of fairly brutal cuts AND tax increases, and then when we are done we'll have a nice big piece of pie for us all to share.

Everyone always wants more, they want it better, and they want to help people not so fortunate. But there's only so long we can go on spending imaginary money kidding ourselves into thinking everything is great. As it stands, every year, the interest slice gets bigger, and every other slice gets smaller, the longer we ignore it, the longer we'll be screwed for to put it right.

Provided they abandon the triple lock and stop bribing pensioners with our money, sure.

^^ this

Why would you increase it at the low end?

One thing I'm fed up with is the constant bad news stories from the BBC about the NHS. From my contact with the NHS its a wonderful system. Nothings perfect but they must be doing something right. How about a few success stories for balance?

fifeandy - Member

Love that pie chart, specifically the monster slice that is national debt interest.
What we need to do is forget red/blue bickering and accept we've collectively f'd up. Accept ~5yrs of fairly brutal cuts AND tax increases, and then when we are done we'll have a nice big piece of pie for us all to share.

I agree with you in spirit, but national economics isn't the same as household economics you can't just tighten your belt for a few months or years and right the ship that way - spending is tied to income.

Tax rises, reduces consumer spending, reduces tax revenues, slows economy, means job loses etc - if you raise the rate, your actual income could just as likely fall - some brilliant minds (honestly, Carney and his guys are very bright people) advise on tax rates to ensure the maximum return, not just to keep the population happy.

Cuts, equally don't help - cuts means less jobs, more benefits as well as reduction in services - a lot of services are self-funded their costs are more than recouped by avoiding bigger costs later on, but cuts mean a reduction to urgent services only so the £5 a week Fat Fighters classes are cut, but you can't cut the Ambo and A&E trip for the heart attack it would have avoided.

It's a very complex problem - if you think you can offer a solution in a few paragraphs, you've not even scratched the surface.

Accept ~5yrs of fairly brutal cuts AND tax increases,

Problem is cuts hurt those who are already very vulnerable.

I'd be willing to pay 60-70% tax or even more if I thought the spending policies and priorities were right.

Id agree, its a very complex problem and its not just a case of throwing more money at the problem.

I'd certainly favour more money going to preventive measures - like a tax on sugar etc. If your a lifestyle problem, smoke, obese, then you should pay.

If we just cut missed appointments it saved a huge amount of money and waste.

I was surprised the NHS didn't colle3ct money from foreign patients not entitled to NHS treatment. Recent experience in Canada - no insurance, no $500 or no credit card = no treatment. And that was at reception.

There's an existing mechanism for the people who want to pay a bit more:

http://www.dmo.gov.uk/index.aspx?page=CRND/CRND_Portfolio/Donations

More income tax no thanks, anyway it just drives people to be more tax efficient.

NHS needs to be scrapped for an EU style system. It would be better to be honest that the NHS is not going to last, and put something better in place, rather than let it slowly fall apart to the point that it is unfixable.

Biggest win with NHS would be make it managed by cross party committee, not by government alone. Would reduce it being used as a vote winner with initiatives driven by headlines not by good care.

The foreign patient thing - it's about 0.5% of total NHS spend - it could be better but there are much bigger opportunities for improvement - just they don't suit the daily mail headlines!

There is a philosophical debate to be had about what the NHS should and shouldn't fund but it probably rates second to tax rises on the political suicide top ten!

One thing I'm fed up with is the constant bad news stories from the BBC about the NHS.

How else are they going to get the public onboard with the upcoming wholesale privitisation? They need to turn everyone against it first.

I agree with you in spirit, but national economics isn't the same as household economics you can't just tighten your belt for a few months or years and right the ship that way - spending is tied to income.

It's a very complex problem - if you think you can offer a solution in a few paragraphs, you've not even scratched the surface.

Fully understand - I have no qualification in economics, so don't know specifics of how to make it work. Plenty of people smarter than me probably can figure something out though.
I am however fairly sure that with the current deficit things are only going to get worse unless some fairly drastic measures are taken.

Problem is cuts hurt those who are already very vulnerable.

Yep, tax should be increased - the 40% tax should be raised as anyone on 40% can afford 2% more.

Out of interest, how so? Why's that?

I'm not disagreeing with a tax increase (or agreeing, for that matter), but just wondering what the basis of that statement is.

DrP

Time to close the tax loop holes that multinationals exploit and for higher rate income tax rise. Most important though to take a holistic approach to the problems which are connected. NHS can't solve our health issues alone, poor diet and lack of exercise are major factors. Folk often choose unhealthy options because of perceived low prices or time saving convenience food. Low pay and long working hours are also an issue for many people. We should at least look at a universal basic income. We should continue to invest in education and in developing skills. (Edit)

es, i agree, and its horrible, but the alternative is the section of pie we can consume getting smaller and smaller, and ultimately reducing our ability to help the vulnerable.

Or we could cut from or tax those who CAN afford to pay and not put the burden on those who can't.

I have no qualification in economics

Basic theory then - there are two ways to get rid of a deficit. Either cut spending, or boost income. Income can be boosted without raising taxes by increasing GDP. So you can borrow a bit more money to invest which then pays back the extra and more by growing the economy and therefore increasing total tax take.

Or, you can cut spending, but this tends to hinder economic growth which then reduces your tax take.

It only takes a small amount of GDP growth to produce a shitload of extra money. And it was alleged when the austerity debate was raging that no economy had ever successfully managed to cut its way out of a deficit - only grow.

Basic theory then..............

I said I had no qualifications, not that I was a complete idiot - geez 🙄

Basic theory then - there are two ways to get rid of a deficit. Either cut spending, or boost income. Income can be boosted without raising taxes by increasing GDP. So you can borrow a bit more money to invest which then pays back the extra and more by growing the economy and therefore increasing total tax take.

That's the theory reality is a bit different. For instance borrowed money isn't infinite and needs servicing.

"And it was alleged when the austerity debate was raging that no economy had ever successfully managed to cut its way out of a deficit - only grow."

I bet Greece wish they'd tried!

BTW: Laffer curve.

I'd happily pay more tax if I was confident it wouldn't go towards buying pensioners votes and keeping the banks in business.

First bit I agree with, second but makes me roll my eyes. People seem to forget what an utter shitstorm would have ensued if RBS and Lloyds, major, major retail banks, had gone bust and every account holder had lost all their money, overnight. And the sole traders, small businesses and enormous corporations that held accounts with them that would have gone bust, overnight. And the business who traded with those businesses that would have gone bust, overnight.

The bank bail outs were not about doing favours for chums in the city, they were about avoiding financial catastrophe (and it's a wholly appropriate word) for millions of people, and the collapse, as in it would cease functioning, of the entire economy of the country.

Without numbers one can't be sure but some small increases in income could be made. Is there a good reason why luxuries shouldn't have a whopping tax leveied. Might I suggest, alcohol, tobacco, sugar, take away foodetc.
In fact anything that isn't actually a help to our society. I could add electrical entertainment even. These are things that people don't need but enjoy yet they add to our burden. I am talking sticking a zero or two on. Yes , in the long run that may damage some industries but a short term influx of cash won't do any harm. Things like traffic fines could be increased. Add a zero or two and the policing would be funded. All little things.
Socialist I'm not but possibly we need some more socialist actions. Maybe one shouldn't benefit without contributions. Directed labour for those fit and able to work. Avoiding contributions deliberately could mean missing out on the benefits of society.
Also can we really afford luxuries such as the arts, funded sports, National parks etc? Some would say that we can't afford not to have them but to me a hospital bed is more important than a new set of footpath signs.
I actually see roads as a low priority. We could get from a to b on gravel tracks.
I wonder what the long term costs of reversing Beeching would be? The network of long flat spaces is there, just a case of the rails maybe. Things do not need to be so expensive. The stations for the railways could be sheds not fancy places with lounges with wifi. They would be used if there was no alternative. Remove modern standards to. So much of our life is overdone, be it luxury or safety. We don't have street lights in the country so why on motorways.
Ultimately I would say balls to peoples selfish needs and hi to the essentials.
None of my ideas are gong to solve the problem but even a little helps.
I feel that what we should be doing as a country is finding out what makes some countries with no natural resources better off, then copying them. Tax havens, maybe?

Increasing the higher tax rate is just a knee jerk reaction by those who don't pay it. A bit of spiteful jealousy really. Its not fair. Fair is treating us all the same not penalising some, ultimately those who can best afford to actually do something about avoiding paying to much. It creates social unhappiness and injustice.

[quote=IHN ]
First bit I agree with, second but makes me roll my eyes. People seem to forget what an utter shitstorm would have ensued if RBS and Lloyds, major, major retail banks, had gone bust and every account holder had lost all their money, overnight. And the sole traders, small businesses and enormous corporations that held accounts with them that would have gone bust, overnight. And the business who traded with those businesses that would have gone bust, overnight.
The bank bail outs were not about doing favours for chums in the city, they were about avoiding financial catastrophe (and it's a wholly appropriate word) for millions of people, and the collapse, as in it would cease functioning, of the entire economy of the country.

so where did the money go then.

because it looks from the outside that the rich got richer and joe public picked up the tab...

joe public picked up the tab

because it looks from the outside that the rich got richer and joe public picked up the tab...

The rich will always get richer, but that's a different discussion.

Joe public did pick up the tab, but was left with a method of paying it, when the alternative was to be left with nothing.

I'm not saying it's fair, because it's not, and [b]much [/b]more should have been done to hold those who caused the mess accountable, but the act itself of bailing the banks out had to be done. It was a choice between a long term but manageable (and, again, the method of management can be debated) hit to the economy, or it's total collapse.

Increasing the higher tax rate is just a knee jerk reaction by those who don't pay it. A bit of spiteful jealousy really. Its not fair. Fair is treating us all the same not penalising some, ultimately those who can best afford to actually do something about avoiding paying to much. It creates social unhappiness and injustice.

It's not a knee jerk reaction or spiteful jealousy. It's a necessary result of the huge income and wealth disparities.

Otherwise, people on lower incomes pay more tax than everyone else.

Stop thinking ONLY of income tax.

Poorer a people spend almost everything they earn each month and have nothing left. That means all their money is subject to 20% VAT, or 70% tax when they buy fuel etc... It makes up a far greater [b]proportion[/b] of their spending than it does for richer people.

I was surprised the NHS didn't colle3ct money from foreign patients not entitled to NHS treatment.

Argh, stuff like this drives me mad.

The rules, for years, have been that the NHS charges non-uk residents for non-A&E treatment. No, patients don't always pay, sometimes because they leave the country without paying*, sometimes because the hospitals don't know that they're non-resident. It could be a white, british born person who's spent most of their life living abroad. They 'look British', they sound British, they've given a UK address (maybe they're back here visiting relatives, so give their aunty Ethel's address), so how is a nurse supposed to know that they aren't a UK resident?

The NHS website says

If you are visiting England from a non-EEA country, even if you are a former UK resident, you need to ensure you are covered for healthcare through personal medical or travel insurance for the duration of your visit. If you need NHS treatment and you have not arranged insurance, you will be charged at 150% of the standard NHS rate, unless an exemption category applies to either you or the treatment.
If you are a non-EEA national, failure to pay this charge may have an effect on any future immigration application you make, and you risk being turned down

The NHS [b]DOES[/b] charge foreign patients and has done for years, those patients pay significantly more than the hospital gets paid for treating a UK resident! IF a hospital has it's overseas patient detection and processing sorting then the non-UK patients are subsidising the care (under)paid for by the local commissioners for 'local people'.

If someone is here from the EU it's even better. There's a portal that the hospital goes on to to log the EHIC details of the patient and then they get paid for the treatment provided, nice and easy, no haggling with insurers or chasing people who've gone back to the other side of the world. Good job we've not done anything to jeopardise that...

*In those situations the Border Agency get involved and will stop people on the way in if they return and potentially refuse entry if they have outstanding NHS debts.

so how is a nurse supposed to know that they aren't a UK resident?

has a passport and or NI number?

 

[quote=bails ] so how is a nurse supposed to know that they aren't a UK resident?By checking their ID card (and don't think that's not on the way)

Is there a good reason why luxuries shouldn't have a whopping tax leveied. Might I suggest, alcohol, tobacco, sugar, take away food etc.

Already been done on alcohol and tobacco. With tobacco it's reached the point of diminishing returns. Higher taxes - more smuggling. Also more people give up smoking. Higher tax on beer - I'd go back to home brewing.

From the tax/benefit point of view it's best if people drink heavily, smoke like chimneys, then die at 60 before pensions kick in and health care costs ramp up.

Yep, tax should be increased - the 40% tax should be raised as anyone on 40% can afford 2% more.

bear in mind that in future, most people who qualify for the 40% tax rate will effectively be paying 49% as they also pay for their student loan for 30-ish years. (ie anyone who is currently about 23 or under)...

Has the time come for 2-5p increase in base rate income tax?

Nah, getting fed up with paying for others chuff ups and lack of moral fibre.

Tax property - massively.
Avoid taxing earned income, it disincentivises labour and wealth creation from actual work.
Maybe tax consumption - that way the wealthier will tend to pay more
Tax property - there are literally millions of people who're hundreds of thousands of pounds richer than they were three years ago, let alone ten or twenty years ago and ALL of it was unearned so they won't mind giving some of it back to pay for schools, hospitals etc*
Most of this 'wealth' has been created by forcing younger generations into crippling amounts of debt so taxing it is likely reduce the incentive for homeowners to do everything they can to inflate house prices which will free up post-tax income for broader economy. WIN WIN.

Land Value Tax is well discussed in the FT and Economist but so far, no sign of a response from the government sadly

* they probably will but that's more a sign of our new national character rather than any sense of care for anyone else...

3 anecdotes

land value tax is the missing bit from the planning system in 1946 (edit: we nationalised development rights but not the uplift in value), we are still paying for it. the last two labour governments (70,s and 00s) at the fag end of their terms have tried half heartedly to introduce something along those lines but its been quickly binned by the incoming conservatives

my anecdotal experience of the NHS is that its much worse than it was, say, 10 years ago. As are most other public services.

heard yesterday that after the autumn statement we now have the highest tax burden for 30 years which surprised me. Means all this talk of tax raising is coming from an already high base relative to recent times.

heard yesterday that after the autumn statement we now have the highest tax burden for 30 years which surprised me

No surprise. Income tax, national insurance, VAT, fuel tax, alcohol duty, council tax, insurance tax, stamp duty, flight tax, vehicle excise duty, etc ......

No need - Brexit will make us all richer. Oh wait...

No - crazy idea

Under the nasties the UK tax take is already rising and will be the highest it's been since the 80s

Increaseing the MRT does not guarantee more tax revenue - we are at/close to the optimium peak. Only those looking to make cheap political stunts would increase it.

We should be reducing the tax burden not increasing it.

If your a lifestyle problem, smoke, obese, then you should pay.

Where do you stop that logic, though? My cycling makes me fit and 'healthy' but it's also been the cause of my only demands on the NHS, with injuries which have often required surgery. What about rugby players, equestrians? Who gets to decide on who's lifestyle choices deserve to be charged or excluded from free treatment?

Totally agree, it should be universal.

Almost all sports carry injury risk, charge them for being reckless?

Or charge them when they don't exercise and get fat and have obesity related health costs?

Complete nonsense.

If your a lifestyle problem, smoke, obese, then you should pay.

We've done this before... lots of unhealthy stuffed is already taxed to take this into account, like alcohol and cigarettes.

It's all got that horrible smell of PR stunts and being played TBH.

http://wingsoverscotland.com/a-division-of-principles/

No. Increasing the basic rate of income tax would be counter-productive given the efforts to increase the tax free allowance to try and bring people out of poverty and into work. The yield would be puny compared to looking at other tax options or increased fiscal efficiency in government. Increasing the higher rates of tax would possibly increase the enthusiasm for avoidance and reduce national productivity as folks try to reduce the amount of income at the higher rate.

Having said this, I'd rather see the basic rate of income tax increase if that meant a removal of the evil, regressive VAT.

This [url= https://www.ifs.org.uk/bns/bn09.pdf ]IFS report[/url] might provide some more substance to the discussion.