National insurance.

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Chippy_Tea

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The Tories promised no NI increase and they have now said its going up, the shameful thing is if you earn £50,000 or more you only pay 2% the rest of us pay the full amount meaning you are going to pay approximately £20 per month extra at a time when most of us haven't had a wage rise in years.
 
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JockyBrewer

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I do feel that political parties should have to substantiate how they’re going to pay for their promises during an election cycle.

There was never any way they could fill the massive black hole in health and social care funding without a raise in taxes.

What I am annoyed about is the 50k cap. I’d love to hear the reasons why someone on 80k should pay proportionately less of their earnings than someone on 20k.
 

Leon103

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The government still get their money by the extra tax they charge those on higher wages
 

MickDundee

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Then we should scrap the State Pension. Why should the working poor, who don't (yet) receive one, pay more tax?
That’s a completely different thing to taxing pensioners who earn over the personal allowance though.

The state pension is below the tax threshold though, so pensioners who only receive the state pension, correctly, don’t pay tax.
 

Bold_Ron

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That’s a completely different thing to taxing pensioners who earn over the personal allowance though.

The state pension is below the tax threshold though, so pensioners who only receive the state pension, correctly, don’t pay tax.
I know but reductio ad absurdum and all that.

I appreciate your point however there are also occupational pensions; police, teachers, forces etc as well as those that paid into a private pension pot for a more comfortable retirement. If we discourage people from investing in their own future we are on a slippery slope.
 

obscure

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I know but reductio ad absurdum and all that.

I appreciate your point however there are also occupational pensions; police, teachers, forces etc as well as those that paid into a private pension pot for a more comfortable retirement. If we discourage people from investing in their own future we are on a slippery slope.
Part of the reason why pension contributions are tax deductible is the idea of avoiding double taxation you don’t pay tax on it when you pay in because you pay tax when you draw your pension.

I have somewhat mixed feelings on this I do accept that we need to pay more in taxes to cover social care costs, but the other issue with national insurance is that it’s not just pension income that don’t pay it on it’s also not paid on dividend income. Even if I was paying effectively the same amount I would say it would be far fairer to raise revenue through income and dividend taxes rather than through national insurance.
 

chrissyr63

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I thought NI was for pensions and working related benefits (sick pay, maternity pay etc). This change seems to want it to use it for health/care costs which is traditionally from income tax. But it is more convenient for this government to up NI as this is capped with 2% above £50k - ie in the usual Tory voting pot. If we really are in this together they should just up income tax.

As an aside the 2% cap after £50k is sort of fair! If you pay 12% of £50k over 50 years into a private fund you could easily get a £40-50k pension. With NI you only get £8-9k with the rest going to up those people who didn't earn as much.
 

Bold_Ron

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Part of the reason why pension contributions are tax deductible is the idea of avoiding double taxation you don’t pay tax on it when you pay in because you pay tax when you draw your pension.

I have somewhat mixed feelings on this I do accept that we need to pay more in taxes to cover social care costs, but the other issue with national insurance is that it’s not just pension income that don’t pay it on it’s also not paid on dividend income. Even if I was paying effectively the same amount I would say it would be far fairer to raise revenue through income and dividend taxes rather than through national insurance.
I am in full agreement.

The purpose of my first post on this thread was to point out that there are pitfalls to raising income tax rather than NICs. The opposition and MSM would be screaming either way. Raising NICs also has an impact on employers' contributions and has a significant impact on small businesses in particular. The 'simple' solution is to have a simple tax system that has no loop holes but that isn't an easy solution to achieve.

As to the 'no tax or NIC increases' pledge in the manifesto I'm sure most sensible people would acknowledge that the Treasury has had to fork out a fair bit of dosh recently that wasn't planned for in the run up to the election. I am no fan of Boris (I personally think he's a bumbling idiot) and I'm sure that there must be someone better to run the country from a cast of 600+ but I can certainly easily discount about 90% of them straight away from both sides of the House.
 

chopps

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I hope this isn't too controversial, but I'm genuinely interested in people's thoughts.
We can bash the rich, but I'm just not sure about the current system either with many people not making a contribution at all.

32M people pay income tax in the UK, broken down as :
27M people at lower rate, 4M at higher rate, 0.4M at additional rate and 0.7M at Savings rate.

The UK population is approx 67M
And working age population is 63% of that.
So that's 42M potential tax payers and only 32M paying into taxation.
There are obvious reasons why some can't work and therefore not contribute taxes.
eg 8.4M people of working age have disabilities (but 53.6% (4.5M) of them are in work)

So why are around 5M people not contributing income tax at all ? (feel free to correct the maths, and I know a proportion will choose not to work)
e.g. Someone working 30 hours a week at £8.21/hour is paying zero income tax
As for national insurance, a worker at the same £8.21 rate does not contribute personally until 22 hours of work per week (edit : 14 hours, then contributions start at £2.85/week)

This is not down to the employee as this is the system we have, but is it fair?

At low pay rates and limited hours any additional taxation is a challenge, but should we all make 'some' contribution if we are fit and able to?
I do pay tax, but I'd be uncomfortable with the idea of relying on the rest of society to pay my share in different circumstances.
Is it right to move the burden to the rest of 'us', to allow employers to pay less than adequate levels of pay?
If any business cannot afford to pay people a sensible living wage, where they can make a contribution to taxation, it's not a business that should exist.
And if that means we all have to pay a bit more for goods and services, then that's what's needed.

Tell my why I'm wrong. No fighting please.

Sources
 
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moto748

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And if they did that, I doubt pensioners would be 'hit' by it anyway. Although considered as taxable income, the State pension is always quoted nett of tax. I can't imagine they would actually reduce the amount of cash going into pensioners' accounts each month. No government would do that, it would be electoral suicide.
 
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