Budget 2016

[Senex]

How about a train driver on £51k?

Very definitely into the 40% bracket. Are they, and others like them, now to be counted amongst the rich, to be penally taxed by the left-wing tax raisers?

Surely there is an extremely strong case for adjustment to the threshold for the 40% level because of both the way that creep has extended its impact over recent years and also the way in which in the early stages of the raising of the starting-point for any income tax the 40% threshold was cut so that those liable to that rate should not get the benefit of the reduction. And did I not hear that the same has been done in connection with the change of taxation on low levels of earned interest? And the argument justifying a need for some change because of the marginal impact of the 40% rate has been very clearly spelled out above.

So far, in income tax terms, the Conservatives over the last six years have helped those at the very top of the earnings scale and those at the bottom. Isn't it time now for something for those in the middle--especially as in electoral terms the Tories won't get back in without their votes? Or is it OK for Brown to target help at Labour voters but not OK when a Tory chancellor does the same for his voters?

 

[miami]

I see the budget passed
http://www.bbc.co.uk/news/uk-politics-35877442

Ahead of the vote, Mr Osborne defended his handling of the economy, but told MPs that where mistakes were made he was ready "to listen and learn".
The Budget was accepted by 310 votes to 275, a government majority of 35.

But without the raid on disabled people:
http://www.bbc.co.uk/news/uk-35868216

With the hugely controversial cuts to the disability benefit Personal Independence Payments (PIPs) being scrapped, where does this leave disabled people now?
Relieved, I'd say, but fearful that this relief will be short-lived.

So far, in income tax terms, the Conservatives over the last six years have helped those at the very top of the earnings scale and those at the bottom. Isn't it time now for something for those in the middle--especially as in electoral terms the Tories won't get back in without their votes? Or is it OK for Brown to target help at Labour voters but not OK when a Tory chancellor does the same for his voters?

Basically the choice comes to either help those at the bottom, or help those at the top and bottom.

£51k, while a perfectly normal salary for a professional, and certainly not someone who is "rich", it is a very high salary statistically - it's in the top 10% -- i.e. 90% of the country earn less than £50,600.

What's the definition of rich? top 10% by income? Top 5%? Top 1%?

 

[Butts]

What's the definition of rich? top 10% by income? Top 5%? Top 1%?

For most people it is anyone wealthier than them hence avoiding any requirement for personal sacrifice whilst maintaining the illusion of being altruistic.

 

[jon0844]

For most people it is anyone wealthier than them hence avoiding any requirement for personal sacrifice whilst maintaining the illusion of being altruistic.

Spot on.

 

[DarloRich]

For most people it is anyone wealthier than them hence avoiding any requirement for personal sacrifice whilst maintaining the illusion of being altruistic.

Spot on.

So taking your position you are happy for the disabled to pay for you to have an increase in the threshold on the 40% tax bracket?

You are happy that the brunt of "austerity" should be carried not by those with the greatest ability to pay but by those with the least?

Are you happy with that - yes or no?

Very definitely into the 40% bracket. Are they, and others like them, now to be counted amongst the rich, to be penally taxed by the left-wing tax raisers?

Surely there is an extremely strong case for adjustment to the threshold for the 40% level because of both the way that creep has extended its impact over recent years and also the way in which in the early stages of the raising of the starting-point for any income tax the 40% threshold was cut so that those liable to that rate should not get the benefit of the reduction. And did I not hear that the same has been done in connection with the change of taxation on low levels of earned interest? And the argument justifying a need for some change because of the marginal impact of the 40% rate has been very clearly spelled out above.

So far, in income tax terms, the Conservatives over the last six years have helped those at the very top of the earnings scale and those at the bottom. Isn't it time now for something for those in the middle--especially as in electoral terms the Tories won't get back in without their votes? Or is it OK for Brown to target help at Labour voters but not OK when a Tory chancellor does the same for his voters?

Those with the greatest ability to pay should do so as part of a fare system that spreads the burden. It is the pay back for taking advantage of all the state has to offer to better yourself.

I paid (I wont now - I'm all right Jack ) 40% tax and whilst it isn't something I might choose to do I accept it is something I have to do in order to fund things we all need like the police, the NHS and yes those evil benefits.

Lots of you don't seem to accept that. That saddens me.

 

[Butts]

So taking your position you are happy for the disabled to pay for you to have an increase in the threshold on the 40% tax bracket?

You are happy that the brunt of "austerity" should be carried not by those with the greatest ability to pay but by those with the least?

Are you happy with that - yes or no?

What I'm saying is that if you radically want to improve the welfare of the poorest in society then that money is not just going to come from those paying 40% or higher tax rates.

The vast majority of people in the middle are going to have to make a contribution as well through higher taxation in one form or another. This is where your definition of "greatest ability to pay" will become contentious.

My contention is that these people are not willing to make any sacrifices to help their fellow man and find it all to easy to be altruistic in outlook as long as their wallets remain untouched.

 

[DarloRich]

What I'm saying is that if you radically want to improve the welfare of the poorest in society then that money is not just going to come from those paying 40% or higher tax rates.

The vast majority of people in the middle are going to have to make a contribution as well through higher taxation in one form or another. This is where your definition of "greatest ability to pay" will become contentious.

My contention is that these people are not willing to make any sacrifices to help their fellow man and find it all to easy to be altruistic in outlook as long as their wallets remain untouched.

so yes or no then

 

[Butts]

so yes or no then

Obviously no, but it is a little more nuanced than simply one or the other.

If you want to raise money I would :



Increase VAT to 25%

Means Test Pensioner Benefits

Tax gains on Property at the point of sale with no further purchase or inheritance

 

[Dave1987]

I've given up to be honest now. I started to take an interest in politics around 5 yrs ago when I realised its something that affects your life so greatly why not try and understand it. I don't claim to understand it all. When the Tories won a majority at the last election it was said that the opinion polls got it so wrong because of the spread of people they asked and that some are reluctant to admit they vote Tory because of the attitude some people have towards others who dare to vote Tory. And some of that is shown on this forum. I'm in the minority on this forum with my political beliefs. I doesn't seem as though you can have a debate on here without it turning nasty so I shall leave it there.

 

[Butts]

I've given up to be honest now. I started to take an interest in politics around 5 yrs ago when I realised its something that affects your life so greatly why not try and understand it. I don't claim to understand it all. When the Tories won a majority at the last election it was said that the opinion polls got it so wrong because of the spread of people they asked and that some are reluctant to admit they vote Tory because of the attitude some people have towards others who dare to vote Tory. And some of that is shown on this forum. I'm in the minority on this forum with my political beliefs. I doesn't seem as though you can have a debate on here without it turning nasty so I shall leave it there.

Cheer up.....

Try being a Scottish Conservative supporter , we are about as popular as an anal deposit in a swimming pool

It is my belief that I am the only Scottish Domiciled Tory in the whole of RailUK Forums, or so my shrink tells me !!

 

[Xenophon PCDGS]

Matthew 19:24
"It is easier for a camel to go through the eye of a needle than for a rich man to enter the Kingdom of God".

In these Days of Mammon, there will be creative private financial accountants who will be skilled enough to ensure that the sizes of needle eyes will be increased commensurately to allow camels to take such a step forward...:roll:

 

[Dave1987]

Cheer up.....

Try being a Scottish Conservative supporter , we are about as popular as an anal deposit in a swimming pool

It is my belief that I am the only Scottish Domiciled Tory in the whole of RailUK Forums, or so my shrink tells me !!

Wow, yes at least I can say that I live in a part of the country where there is a majority of Tory support.

 

[DarloRich]

I've given up to be honest now. I started to take an interest in politics around 5 yrs ago when I realised its something that affects your life so greatly why not try and understand it. I don't claim to understand it all. When the Tories won a majority at the last election it was said that the opinion polls got it so wrong because of the spread of people they asked and that some are reluctant to admit they vote Tory because of the attitude some people have towards others who dare to vote Tory. And some of that is shown on this forum. I'm in the minority on this forum with my political beliefs. I doesn't seem as though you can have a debate on here without it turning nasty so I shall leave it there.

of course you can - There is nothing wrong with expressing your view or supporting the conservatives, just be prepared to defend your views especially form those of us who have been part of the I'm NOT all right Jack section of society or felt the effect of Tory policy once to often.
--- old post above --- --- new post below ---

Cheer up.....

Try being a Scottish Conservative supporter , we are about as popular as an anal deposit in a swimming pool

It is my belief that I am the only Scottish Domiciled Tory in the whole of RailUK Forums, or so my shrink tells me !!

i think you are the ONLY Scottish Tory.

 

[Butts]

of course you can - There is nothing wrong with expressing your view or supporting the conservatives, just be prepared to defend your views especially form those of us who have been part of the I'm NOT all right Jack section of society or felt the effect of Tory policy once to often.
--- old post above --- --- new post below ---


i think you are the ONLY Scottish Tory.

Have I misread your post or is that a subliminal message...... are you scribing from Hogans with the aid of "99p specials" ?

"Dodo" - signing off

 

[northwichcat]

Very definitely into the 40% bracket. Are they, and others like them, now to be counted amongst the rich, to be penally taxed by the left-wing tax raisers?

The frustrating thing for me is that I think Dave1987 is correct that there is a higher proportion of left-wing views here than in the UK as a whole, and it would be nice if this forum was more evenly weighted in that regard. I'm sure it can't be easy posting on a forum in which your views are a minority

I think train crews fall in to a less conventional category. If you post a left of centre or radical centre view on Trade Unions on here you get all sort of criticism from train crews even some people accusing you of being a Tory. However, while they might generally be pro-Corbyn and anti-Cameron how many are actually against the Conservative's income tax threshold changes if it gives them more net pay, even if the don't want to admit they like a Conservative policy?

 

[Bletchleyite]

Increase VAT to 25%

Regressive, as it hits poorer people harder.

Better to increase *Income Tax* by a couple of per cent. To avoid this hitting the low-paid, it could be met with a commensurate increase in the personal allowance.

Tax gains on Property at the point of sale with no further purchase or inheritance

There already is to all intents and purposes, it's called Capital Gains Tax.

 

[northwichcat]

Regressive, as it hits poorer people harder.

Agreed especially as so many essential items incur VAT. I don't consider it being a luxury to buy new clothes or shoes to replace worn out ones. I also don't see why digestive biscuits with a thin layer of chocolate incurs VAT but chocolate cakes do not.

 

[miami]

So taking your position you are happy for the disabled to pay for you to have an increase in the threshold on the 40% tax bracket?

You are happy that the brunt of "austerity" should be carried not by those with the greatest ability to pay but by those with the least?

The problem is those on £50k, while able to bear the burden of an extra £1k in tax far more than someone on £15k, doesn't mean they should suffer from Osborne's mismanagement of the economy.

Income is a strange thing and doesn't really relate to "how rich you are". You can easily earn £50k, be in the top 10% of income, not be able to afford to buy a house, and end up spending £20k/year on rent and £13k on tax and £3k on commuting, leaving £14k left over, and that's before trying to save for a pension. On the other hand pensioners who have, through sheer luck of buying at the right time, are now millionaires, don't pay a penny on housing, but have incomes of £15k/year so are classed as "poor".

 

[northwichcat]

The problem is those on £50k, while able to bear the burden of an extra £1k in tax far more than someone on £15k, doesn't mean they should suffer from Osborne's mismanagement of the economy.

If the threshold for 20p and 40p are changed at the same time it can be done in a way so that people on lower incomes get higher net pay, while people on higher incomes get the same amount of net pay. While someone getting a payrise which takes them over the 40p threshold doesn't lose anything even if they don't gain as much as they hoped.

 

[miami]

If the threshold for 20p and 40p are changed at the same time it can be done in a way so that people on lower incomes get higher net pay, while people on higher incomes get the same amount of net pay. While someone getting a payrise which takes them over the 40p threshold doesn't lose anything even if they don't gain as much as they hoped.

It could, but that gets away from the fact in some edge cases it costs more to work than you get paid (a 4 hour extra shift for someone on £25/hour with 2 kids and a £30 cost to go to work).

It raises the question "why bother working hard for an extra 5 years before entering the workforce at 23 incurring £40k of debt when you could have left school at 18 and spent that time working up a career with a ceiling of £40k/year rather than £60k/year, given that the extra 20k is taxed at a 52% marginal. If you're lucky the 5 years less you spend in the workforce will lose you £150k, but the 20 years you earn at a full level of £60k will net you £200k, minus the £40k debt and that's £160k.

At the end of your career you'd be £10k better off.

For comparison, I believe the new Zealand income tax is

£0 to £7k: 10.5%
£7k-£23k: 17.5%
£23k-£33k: 30%
above £33k: 33%

The UK is
£0k - £8k: 0%
£8k - £10k: 12%
£10k-£42k: 32%
£42k-£43k: 22%
£43k-£50k: 42%
£50k-£60k: 52% (including the loss in child benefit for a family with 2 kids)
£60k-£100k: 42%

(Although in reality the employers NI rate should also be counted, as it's basically charged before Gross salary, numbers approximate)

£0k - £8k: 0%
£8k - £10k: 23%
£10k-£42k: 38%
£42k-£43k: 33%
£43k-£50k: 55%
£50k-£60k: 65% (including the loss in child benefit)
£60k-£100k: 55%


That means to earn an extra £1000 take home pay, a train driver on £50k has to be paid an extra £2,800.

That is a stupid amount, and one that the Tories not only seem unwilling to fix, they actually created it in the first place in 2013.

Make no mistake - the Tories are not the party for people earning in the £40k-£60k region, at least from a normal job (run your own company and you're far better off as far as taxes go at that level)

 

[Tetchytyke]

Around 15% of people who pay income tax pay it at the higher rate, with around a further 2% paying it at the maximum rate . These people are not the squeezed middle- they're not in the middle, for one thing. I'm sympathetic to people who can't afford things on that wage, but trying to claim they're middle income people is ludicrous. 83% of all income tax payers do not ever reach the higher rate.

 

[miami]

Around 15% of people who pay income tax pay it at the higher rate, with around a further 2% paying it at the maximum rate . These people are not the squeezed middle- they're not in the middle, for one thing. I'm sympathetic to people who can't afford things on that wage, but trying to claim they're middle income people is ludicrous. 83% of all income tax payers do not ever reach the higher rate.

Firstly "squeezed middle" probably relates to a variety of factors including total household income, household disposible income, and wealth. Gross income is not neccersilly related to any of those factors for a variety of reasons.

The Tories have helped those earning >£150k.
The Tories (mainly thanks to the libdems from 2010-2015) have helped those earning <£30k

They haven't done much for the £40k-£100k bracket, which is their traditional voting demographic. They don't need to, as they aren't going to leave the country en-mass (or have their income leave the country) like the >£150k lot, and they aren't going to vote Labour like the <£40k lot.

P.S I referred to train drivers as part of the top 10%, not middle.
P.P.S I know the stats, but I find it amazing how many houses are being sold with an average price of £300k when only 10% of the country have a gross salary of £50k (thus a 6:1 ratio, way over a reasonable mortgage level)
--- old post above --- --- new post below ---
So I just watched PMQs on these two stories

http://www.bbc.co.uk/news/uk-politics-35884655
http://www.bbc.co.uk/news/uk-politics-35884656

Only two people come off like professionals to me, Bercow and Corbyn.

Cameron, when not au-pairing at the pier, seems incapable of answering a simple question
Most of the Labour bench (aside form Corbyn) are jeering away like it's a playground fight. The Tory front bench seems slightly better, but not much.

Absolutely pathetic. Not sure what the point is in PMQs to be honest.

 

[Darren R]

Tax gains on Property at the point of sale with no further purchase or inheritance

Even ignoring the political impossibility of this, extending Capital Gains Tax (CGT) to a person's home is a non-starter.

Firstly, a couple are each taxed individually, and everyone has a CGT exempt amount each year - currently £11,100. So, if the family home is sold, owned jointly by a married couple, who has the tax liability, and what is the exempt amount? (Remember, it cannot be a joint liability.)

Secondly, it would be a bureaucratic nightmare for home-owners. Before any Chargeable Gain is calculated for CGT purposes, allowable expenses are deducted from the profit on the disposal, including repairs and enhancements. If CGT was extended to the principal private residence, every time the home-owner replaced anything on a like-for-like basis, or any improvements were made, these would be allowable deductions upon disposal - but you'd have to keep the documentation to prove it. How many times over the course of twenty years (or more) does the average householder redecorate, repair or make improvements to the home in which they live? That's a lot of receipts to keep - or wave goodbye to the money when they sell the house.

Thirdly, and, on the subject of fairness, perhaps the most important: It would disproportionately hit the lower paid.

Currently, the main exemptions from Capital Gains Tax are:

• chattels bought and sold for £6,000 or less
• wasting chattels (ie anything with an expected life span of fifty years or less)
• cars
• principal private residence (PPR), providing the owner has occupied the property throughout the period of ownership (although certain exemption periods apply.)

This means that pretty much everything owned by those on lower earnings is likely to be exempt from CGT. By making the PPR liable to Capital Gains Tax, you would be taxing the lower-paid on the only thing they own that is likely to bring in a large-enough profit to bring them into the CGT bracket. Not only that, but CGT is levied at only two rates; currently 18% and 28%. The higher rate kicks-in when the tax payer has used all of his or her Basic Rate Band (nominally £31,785 until April 5th, although the actual figure varies up or down depending on other things not pertinent here.) If CGT was levied on profits from the sale of one's PPR, even a modest wage earner would go way over their Basic Rate Threshold for the year and end up paying the higher rate of CGT on the lion's share of the profit they made. For CGT purposes, once the taxpayer has surpassed their Basic Rate Threshold, it doesn't matter whether they are earning £4,000 over the limit or £4 million.

To use someone I know as an example: they earn a modest £15,000 per annum, and have lived in the same terraced house for over 40 years. If the house was to be sold now, a profit of around £85,000 would be made (as the house was bought for a paltry £800!) In that scenario, the tax due according to the total income, would be as follows:

• £15,000 p.a. earnings - £17,702 tax liability - (118.01% of earnings)
• £20,000 p.a. earnings - £18,202 tax liability - (91.01%)
• £30,000 p.a. earnings - £19,202 tax liability - (64.01%)
• £40,000 p.a. earnings - £20,202 tax liability - (50.51%)
• £50,000 p.a. earnings - £20,440 tax liability - (40.88%)
• £100,000 p.a. earnings - £20,440 tax liability - (20.44%)

It would penalize the pensioner more than the millionaire. There are reforms that could be made to CGT, but this is not one of them.


(Sorry - the table has got a bit mangled in the posting!)

 

[Butts]

Even ignoring the political impossibility of this, extending Capital Gains Tax (CGT) to a person's home is a non-starter.

Firstly, a couple are each taxed individually, and everyone has a CGT exempt amount each year - currently £11,100. So, if the family home is sold, owned jointly by a married couple, who has the tax liability, and what is the exempt amount? (Remember, it cannot be a joint liability.)

Secondly, it would be a bureaucratic nightmare for home-owners. Before any Chargeable Gain is calculated for CGT purposes, allowable expenses are deducted from the profit on the disposal, including repairs and enhancements. If CGT was extended to the principal private residence, every time the home-owner replaced anything on a like-for-like basis, or any improvements were made, these would be allowable deductions upon disposal - but you'd have to keep the documentation to prove it. How many times over the course of twenty years (or more) does the average householder redecorate, repair or make improvements to the home in which they live? That's a lot of receipts to keep - or wave goodbye to the money when they sell the house.

Thirdly, and, on the subject of fairness, perhaps the most important: It would disproportionately hit the lower paid.

Currently, the main exemptions from Capital Gains Tax are:

• chattels bought and sold for £6,000 or less
• wasting chattels (ie anything with an expected life span of fifty years or less)
• cars
• principal private residence (PPR), providing the owner has occupied the property throughout the period of ownership (although certain exemption periods apply.)

This means that pretty much everything owned by those on lower earnings is likely to be exempt from CGT. By making the PPR liable to Capital Gains Tax, you would be taxing the lower-paid on the only thing they own that is likely to bring in a large-enough profit to bring them into the CGT bracket. Not only that, but CGT is levied at only two rates; currently 18% and 28%. The higher rate kicks-in when the tax payer has used all of his or her Basic Rate Band (nominally £31,785 until April 5th, although the actual figure varies up or down depending on other things not pertinent here.) If CGT was levied on profits from the sale of one's PPR, even a modest wage earner would go way over their Basic Rate Threshold for the year and end up paying the higher rate of CGT on the lion's share of the profit they made. For CGT purposes, once the taxpayer has surpassed their Basic Rate Threshold, it doesn't matter whether they are earning £4,000 over the limit or £4 million.

To use someone I know as an example: they earn a modest £15,000 per annum, and have lived in the same terraced house for over 40 years. If the house was to be sold now, a profit of around £85,000 would be made (as the house was bought for a paltry £800!) In that scenario, the tax due according to the total income, would be as follows:

• £15,000 p.a. earnings - £17,702 tax liability - (118.01% of earnings)
• £20,000 p.a. earnings - £18,202 tax liability - (91.01%)
• £30,000 p.a. earnings - £19,202 tax liability - (64.01%)
• £40,000 p.a. earnings - £20,202 tax liability - (50.51%)
• £50,000 p.a. earnings - £20,440 tax liability - (40.88%)
• £100,000 p.a. earnings - £20,440 tax liability - (20.44%)

It would penalize the pensioner more than the millionaire. There are reforms that could be made to CGT, but this is not one of them.


(Sorry - the table has got a bit mangled in the posting!)

Thanks for the dissertation evisecerating my proposal, I will return to the "drawing board"

 

[Senex]

Firstly "squeezed middle" probably relates to a variety of factors including total household income, household disposible income, and wealth. Gross income is not neccersilly related to any of those factors for a variety of reasons.

The Tories have helped those earning >£150k.
The Tories (mainly thanks to the libdems from 2010-2015) have helped those earning <£30k

They haven't done much for the £40k-£100k bracket, which is their traditional voting demographic. They don't need to, as they aren't going to leave the country en-mass (or have their income leave the country) like the >£150k lot, and they aren't going to vote Labour like the <£40k lot.

Exactly so. But I think they do need to look to the interests of these people -- they can't afford for too many to decide not to vote at all or to go off and vote for UKIP (or its successor). And whilst you're right in my view to say that the band in question is 40K to 100K, I think the crucial section is the 40K to 60K section where the impact seems to be greatest.

Absolutely pathetic. Not sure what the point is in PMQs to be honest.

No point -- it's the extreme example of an adversarial system of politics (and justice) that seems to owe more to badly-run schoolboy debating societies than to anything else.

 

[northwichcat]

Only two people come off like professionals to me, Bercow and Corbyn.

Cameron, when not au-pairing at the pier, seems incapable of answering a simple question
Most of the Labour bench (aside form Corbyn) are jeering away like it's a playground fight. The Tory front bench seems slightly better, but not much.

Absolutely pathetic. Not sure what the point is in PMQs to be honest.

Cameron acts like a rebellious school boy who refuses to give straight answers, while Corbyn acts more like a school teacher. Corbyn's reaction usually gives the impression that he's thinking "It's your time that you're wasting not mine."

Although in fairness to Cameron, Blair was no better at PMQs but Brown was an improvement.

 

[miami]

Even ignoring the political impossibility of this, extending Capital Gains Tax (CGT) to a person's home is a non-starter.

Yes, it should be a similar tax, which takes into account years of owning it, inflation (of some sort), and maintenence.

The goal should be to encourage income (which is a proxy for useful work done for mankind) but discourage wealth begatting wealth (which is more a proxy for luck and historical abuse)

It would penalize the pensioner more than the millionaire.

It would peanalise neither. They spent £800 on a house in say 1975, about equivelent to £7k now. The other £71k is pure profit, made not from any contribution to society, not through hard work, but through sitting on their behinds doing nothing.

Taxing that £71k at say 20% would mean a total tax of say £15k.

That £15k would be deducted from the selling price, leaving the pensioner with £65k in the bank. Not bad for doing nothing.

Compare someone who paid rent over that period, and that rent came to cover the cost of the mortgage in the first place and any maintenence (in reality it would be higher). They'd be left with £0. So for the current pensioner spending 20 weeks wage (or 4,000 pints) on a house in 1976, they're making a fortune. P.S £80k today is 160 weeks wage, or 30,000 pints, so that house now costs about 8 times more than it did.

Other forms of income are completely irrelevant to this calculation.

 

[Darren R]

Yes, it should be a similar tax, which takes into account years of owning it, inflation (of some sort), and maintenence.

The goal should be to encourage income (which is a proxy for useful work done for mankind) but discourage wealth begatting wealth (which is more a proxy for luck and historical abuse)



It would peanalise neither. They spent £800 on a house in say 1975, about equivelent to £7k now. The other £71k is pure profit, made not from any contribution to society, not through hard work, but through sitting on their behinds doing nothing.

Taxing that £71k at say 20% would mean a total tax of say £15k.

That £15k would be deducted from the selling price, leaving the pensioner with £65k in the bank. Not bad for doing nothing.

Compare someone who paid rent over that period, and that rent came to cover the cost of the mortgage in the first place and any maintenence (in reality it would be higher). They'd be left with £0. So for the current pensioner spending 20 weeks wage (or 4,000 pints) on a house in 1976, they're making a fortune. P.S £80k today is 160 weeks wage, or 30,000 pints, so that house now costs about 8 times more than it did.

Other forms of income are completely irrelevant to this calculation.

You appear to be proposing a flat-rate tax levied to both prince and pauper alike. It has been tried before - it didn't work out well! A flat-rate tax that fails to take income into account is inherently unfair. On the same disposal the multi-millionaire would pay exactly the same amount of tax as the war widow living on State Pension.

As for the notion that these fat cats (living in a two-bedroom terraced house worth a paltry £80,000!) are undeserving of any profit because they have been "sitting on their behinds doing nothing;" this is patent nonsense. In the decades since the house was bought, unknown thousands have been spent on maintaining and improving it. (In the specific case of my example, the house concerned did not even have an inside toilet when the property was purchased.) Not every house in the country is now worth a million pounds simply because of house-price inflation. A flat rate tax levied on house profits would be very regressive.

Don't forget that second homes are liable to Capital Gains Tax upon disposal, and a second home incurs a higher rate of Stamp Duty Land Tax.

 

[underbank]

Need to get back to CGT being based on length of ownership. Current rules are silly - same tax rate whether you've owned it for 5 or 50 years. We used to have "taper relief" where you got more relief based on years of ownership. Before that, we had indexation where the original cost was "indexed" upwards according to inflation. Now we have nothing like that.

It's another tax that the politicians have screwed up (other many Parliaments), meaning some people with huge gains pay little or nothing.

Scrap all the reliefs, no PPR, no entrprenneurs relief, not lettings relief. Put it back to being based on years of ownership, so the longer you've owned it, the lower rate of tax is payable when sold. Quick purchases/disposals attract the highest rate. Either taper the gain or index the cost.

 

[miami]

You appear to be proposing a flat-rate tax levied to both prince and pauper alike. It has been tried before - it didn't work out well! A flat-rate tax that fails to take income into account is inherently unfair. On the same disposal the multi-millionaire would pay exactly the same amount of tax as the war widow living on State Pension.

Wealth != income.

Who is richer, a millionaire on £15k a year, or someone on £25k with no assets?

This would be a wealth tax, far fairer than a productivity tax.

As for the notion that these fat cats (living in a two-bedroom terraced house worth a paltry £80,000!) are undeserving of any profit because they have been "sitting on their behinds doing nothing;" this is patent nonsense. In the decades since the house was bought, unknown thousands have been spent on maintaining and improving it. (In the specific case of my example, the house concerned did not even have an inside toilet when the property was purchased.) Not every house in the country is now worth a million pounds simply because of house-price inflation. A flat rate tax levied on house profits would be very regressive.

The vast majority of home owners earn more, and are far more wealthy, than those who rent. Taxing home owners is a progressive tax. Taxing council house renters is a regressive tax.

Don't forget that second homes are liable to Capital Gains Tax upon disposal, and a second home incurs a higher rate of Stamp Duty Land Tax.

And why should someone who owns two houses, perhaps a small £150k family house in an affordable area, and a £100k bedsit near work, pay CGT when someone in a £1m mansion who doesn't work not pay tax?

One in 10 households are millionaire households, yet many avoid the tax burden.

As the LSE state

"Inflation in house prices underlies the burgeoning wealth at the top end of the scale, and seeing as most of us are still living in the same old houses it is easy to regard this as an illusion. But that would be a mistake: whether through downsizing, inheritance or equity release, this notional wealth gets cashed in at some stage. And whether it is spent on a comfortable retirement or on master's degrees or deposits to help buy property in the right place, it will certainly have major implications for the life chances of some – but not others – in the next generation, and the one after that. The scale of the increase in wealth over the last 20 years makes the wins and losses from this lottery far bigger than it was in the past."

Wealth beggars wealth. 20 somethings paying over £200k to rent between leaving education and buying a 1 bed flat aged 34 are feeding the wealthy with their income. Those in the 10% who can get interest free loans or gifts from the bank of mum and dad avoid this £200k tax, leading to widening inequality.