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Both parties are the same in having to do U-turns due to increased taxes for the lower paid.
The 'evil working class' hating tories have increased the personal allowance meaning those on low pay are paying less tax than before.
From 2010 it was £6,475, 2020 was £12,500
In comparison 2000 was £4,385. Yes it is now frozen but I suspect it might get unfrozen to help the cost of living.
So those on higher than average wages are paying more tax, isn't that a better way? You earn more money, you pay more tax.
It is, but marginal deductions of over 50% from your pay (tax, nic, student loans, workplace pensions and child benefit clawback) when wages are as low as £50-£60k isn't good and doesn't incentivise working harder/more hours etc. There needs to be an upper limit on such deductions where you don't lose more than you gain when you do an extra shift or take a promotion. A "take home" increase of less than 50% from your extra earnings is a massive disincentive to better yourself!
It is, but marginal deductions of over 50% from your pay (tax, nic, student loans, workplace pensions and child benefit clawback) when wages are as low as £50-£60k isn't good and doesn't incentivise working harder/more hours etc. There needs to be an upper limit on such deductions where you don't lose more than you gain when you do an extra shift or take a promotion. A "take home" increase of less than 50% from your extra earnings is a massive disincentive to better yourself!
When you think about your income, do you feel rich, poor, or just plain average? Find out where you lie in the UK income distribution.
ifs.org.uk
For example someone with 2 dependents earning £50,000 and paying £200 in council tax each month would be better off than 80% of the population.
Anyway, if you get a £1,200 pay rise or earn that from a few extra shifts each month that's still an extra £50 a month, which as a percentage of your income may not be so that much when you're take home is comfortably over £2,000/month. As such an extra shift may not be worth the lost hours, likewise depending on what you're required to do for the promotion you may also decide it's not worth it.
However, it should be noted that those on truly low pay (i.e. minimum wage) who are claiming benefits often lose out on increased pay by more than 50%. In fact the government recently cut this to ensure that it was 55% rather than 63%, as the following news story confirms:
It is, but marginal deductions of over 50% from your pay (tax, nic, student loans, workplace pensions and child benefit clawback) when wages are as low as £50-£60k isn't good and doesn't incentivise working harder/more hours etc. There needs to be an upper limit on such deductions where you don't lose more than you gain when you do an extra shift or take a promotion. A "take home" increase of less than 50% from your extra earnings is a massive disincentive to better yourself!
Ah yes, that old myth used to justify lower taxes for high earners.
99% of people wouldn't make the decision to reject opportunities to take a higher paid job because the net pay increase would only be say 40% of the gross pay increase, especially when in your example some of that is accounted for by higher pension contributions which you'll benefit from on retirement. It would be a perfect example of cutting off your nose to spite your face.
Ah yes, that old myth used to justify lower taxes for high earners.
99% of people wouldn't make the decision to reject opportunities to take a higher paid job because the net pay increase would only be say 40% of the gross pay increase, especially when in your example some of that is accounted for by higher pension contributions which you'll benefit from on retirement. It would be a perfect example of cutting off your nose to spite your face.
Tell that to doctors who openly admit refusing extra shifts because of the tax impacts to keep their income under £100k.
Or how about multiple threads on other fora about people paying extra into pensions or refusing promotions to keep their taxable under £50k to avoid the child benefit clawback.
It IS a real problem and far more than 1% of those affected take action to avoid punitively high marginal tax rates.
If you earned £110k, would you really do an extra shift for £1000 gross, if you only came out with £220 net, and then had to pay your travelling costs etc - or would you just stay in bed or do something more fun? After all, you earn so much, you don't "Need" the £220, so why bother? At least if you could keep half of it, then you'd be more likely to do the shift as £500 in your hand is more motivational than £220!
It's not just money either. Someone breaching the £50k income level suddenly needs to register and complete SA tax returns, which is another burden. (Cue some smart asses coming on to say it's easy and they do it in their sleep - maybe, but for lots, it's something they can't do themselves!).
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No I'm talking about behaviour. Someone already on a pretty decent wage doesn't "need" to earn more, so they need to be incentivised, or at least NOT disincentivised to work more, take promotions, etc. A marginal deductions rate of over 50% doesn't motivate them!
Look at the graph of marginal deductions. It's like a mountain range. It should be a smooth curve to avoid the demotivational aspects.
And yes, it's the same at very low incomes up to £20k when there's a high marginal deduction rate due to having to start paying tax & NIC at the same time as losing universal credit/tax credits. I believe there are marginal deductions (cost) of 70-80% for lower earners under £20k. That's crazy too!
And yes, it's the same at very low incomes up to £20k when there's a high marginal deduction rate due to having to start paying tax & NIC at the same time as losing universal credit/tax credits. I believe there are marginal deductions (cost) of 70-80% for lower earners under £20k. That's crazy too!
I pretty much agree with what you write. One point though: On the issue of universal credit deductions, a high marginal rate of deductions is unfortunately probably unavoidable. If you want to be paying people enough UC that someone on almost no other income can live, but you don't want to be wasting vast sums of money paying UC to people whose income is easily enough to survive without it, then the mathematics makes it pretty much impossible to achieve both of those without a fairly steep marginal deduction rate.
I pretty much agree with what you write. One point though: On the issue of universal credit deductions, a high marginal rate of deductions is unfortunately probably unavoidable. If you want to be paying people enough UC that someone on almost no other income can live, but you don't want to be wasting vast sums of money paying UC to people whose income is easily enough to survive without it, then the mathematics makes it pretty much impossible to achieve both of those without a fairly steep marginal deduction rate.
I agree, but I think it's been worsened by raising the starting point for paying tax & NIC without changing the UC/TC clawback thresholds/rates, so the "transition" period with very high marginal deduction rates has been squeezed, and that's the very range of income where we should be encouraging the lower paid to take more shifts or take a promotion from worker to team leader, etc.
Successive governments seem incapable of "doing the Math" to properly understand how changes in one thing (i.e. tax/nic) affects the "bigger picture" when considering other things, such as UC/TC. A mountain range graph for marginal deductions is pretty crazy and is caused by "unforeseen" consequences which were actually entirely foreseeable if decision makers used joined up thinking. This isn't a criticism of any particular party or politician - I've been an accountant for nearly 40 years and seen it constantly over the decades with the same lame excuse of "unforeseen" consequence. Sadly, I'm now very jaundiced when it comes to politicians of all colours!
Tell that to doctors who openly admit refusing extra shifts because of the tax impacts to keep their income under £100k.
Or how about multiple threads on other fora about people paying extra into pensions or refusing promotions to keep their taxable under £50k to avoid the child benefit clawback.
Those are very different scenarios to the ones you described in your earlier post whereby people were actually having LESS money in their pocket after taking extra shifts or a higher paid job due to a poorly designed system for tax free pension contributions (in the case of doctors) and benefits thresholds (in the case of child benefit recipients). In both cases you effectively lost a chunk of net income when crossing a specific threshold, if the systems were changed so instead of losing a lump sum at certain points it tapered off on the basis of a percentage of your income, that problem wouldn't exist.
In the case of the pension contributions for high earners, it would only negatively affect you if you had a small increase (in percentage terms) in annual income anyway. An extra £1000 gross pay could in certain circumstances result in a decrease in net income but a £10k increase definitely wouldn't.
For the scenario outlined above I agree it would be significantly more than 1%, which is why the tax & benefit rules should be chnaged so it can never happen, but in the case of the scenario mentioned in your earlier post:
If you earned £110k, would you really do an extra shift for £1000 gross, if you only came out with £220 net, and then had to pay your travelling costs etc - or would you just stay in bed or do something more fun? After all, you earn so much, you don't "Need" the £220, so why bother? At least if you could keep half of it, then you'd be more likely to do the shift as £500 in your hand is more motivational than £220!
Depends on your circumstances some wouldn't for those reasons (there are reasons other than money why people would refuse extra shifts) but I suspect the majority would. In most industries it isn't a problem anyway as there are usually enough people willing to take the extra shifts.
Technically it was a tax implication on pension contributions.
However it does highlight that there's a case for reviewing things more often than is often the case.
However given that Labour have had no control of the tax system for the last 12 years, it's reasonable to assume that it's not something which is the cause of the current woes for them (yes they could have come up with better policies to include in their manefesto, however it is a fairly small number of people who would benefit from it).
A shadow Junior Minister has been sacked for what appears to be an unauthorised media appearance while on a picket line. Safe to say quite a few within his party will not be pleased with this:
Sam Tarry defied Sir Keir Starmer by joining striking rail workers on the picket line.
www.bbc.co.uk
Labour leader Sir Keir Starmer has sacked his junior shadow transport minister who joined striking rail workers on a picket line.
Ilford South MP Sam Tarry attended the protest at London's Euston station despite Sir Keir saying his frontbench MPs should stay away.
Speaking to reporters, Mr Tarry said "any Labour MP" would have "absolute solidarity with striking workers".
Labour said he had been fired for making unauthorised media appearances.
In a statement the party said Labour would "always stand up for working people fighting for better pay, terms and conditions at work".
"This isn't about appearing on a picket line. Members of the frontbench sign up to collective responsibility. That includes media appearances being approved and speaking to agreed frontbench positions.
"As a government in waiting, any breach of collective responsibility is taken extremely seriously and for these reasons Sam Tarry has been removed from the frontbench."
Trains services have been disrupted throughout the day after 40,000 rail workers in protest at pay, pensions and working conditions.
Negotiations between the RMT union and Network Rail have failed to find a solution to the dispute.
Several Labour MPs have expressed support for the strikes including five junior frontbenchers.
Talking to the BBC on Wednesday morning, Mr Tarry said he was "here as a shadow transport minister backing transport workers who are on strike" and "backing the travelling public".
Asked if he should be on the picket line he said "any Labour MP, any Labour member, will have absolute solidarity with striking workers."
He argued that under a Labour government in office "this dispute would not be happening" because a "fair pay deal would have been in place".
I'm confident a lot of what he's doing is to try and convince target voters, the problem is he needs to be careful not to lose too many base supporters (i.e. he risks them not turning up to vote). Looking at this a bit more his reasoning seems to make sense, but this is not being communicated effectively to the public; Sam Tarry appears to have been sacked for speaking to the media without permission and saying stuff that's not party policy from an official party position, but it's coming across as he was sacked just for being on a picket line.
A shadow Junior Minister has been sacked for what appears to be an unauthorised media appearance while on a picket line. Safe to say quite a few within his party will not be pleased with this:
Tarry went on TV, gave himself a promotion and talked about policy that wasn't policy. He knew what he was doing - also up for deselection by his CLP. Typical Corbynite.
Tarry went on TV, gave himself a promotion and talked about policy that wasn't policy. He knew what he was doing - also up for deselection by his CLP. Typical Corbynite.
Could you provide some sources for these please? Which television studio did he go to? What new job title did he give himself? And which formal policies did he announce?
Could you provide some sources for these please? Which television studio did he go to? What new job title did he give himself? And which formal policies did he announce?
And yet the BBC states that he is indeed the Shadow Secretary of State for Transport? And the notes of his dismissal make no note of anything relating to policy. It's time to stop sycophantically regurgitating dross from right wing journalists on Twitter.
And yet the BBC states that he is indeed the Shadow Secretary of State for Transport? And the notes of his dismissal make no note of anything relating to policy. It's time to stop sycophantically regurgitating dross from right wing journalists on Twitter.
And yet the BBC states that he is indeed the Shadow Secretary of State for Transport? And the notes of his dismissal make no note of anything relating to policy. It's time to stop sycophantically regurgitating dross from right wing journalists on Twitter.
1) Benjamin Butterworth isn't a right wing journalist.
2) Sam Tarry's exact words "I am the Shadow Secretary of State for Transport" - I'm sure Louise Haigh would love to find out he's promoted himself to that position.
3) Makes up policy
4) Up for de-selection.
Sam Tarry appears to have been sacked for speaking to the media without permission and saying stuff that's not party policy from an official party position, but it's coming across as he was sacked just for being on a picket line.
Correct. Worth noting Tarry was the TSSA political officer before winning his seat in Ilford. It is worth some background reading on the deselection situation in his constituency. He was attending a TSSA picket at Euston also attended by the TSSA general secretary.
Cranks gotta crank. They are desperate to make out this sacking is for attending a picket. It isn't. It is for not following the front bench line. If you want to crank, off you trot to the back benches.
With a wide open goalmouth, wider than it's been for years, only Labour leadership could instead steer the ball back into their own net. Corbyn, Sir Starmer......as disastrous a succession as Johnson followed by Truss. Bring back Ed Milliband, Liz Kendall, even Ed Balls. Get someone at least part competent and not half robot, who doesn't treat every subject like a dry legal treatise. The Tories never considered Sir Geoffrey Howe could make a leader, what on earth possessed the Labour membership to think Starmer passed any test, other than the one that he definitely wasn't a Corbyn clone? The FPTP system will be dealing us another Tory government if things continue like this.
With a wide open goalmouth, wider than it's been for years, only Labour leadership could instead steer the ball back into their own net. Corbyn, Sir Starmer......as disastrous a succession as Johnson followed by Truss. Bring back Ed Milliband, Liz Kendall, even Ed Balls. Get someone at least part competent and not half robot, who doesn't treat every subject like a dry legal treatise. The Tories never considered Sir Geoffrey Howe could make a leader, what on earth possessed the Labour membership to think Starmer passed any test, other than the one that he definitely wasn't a Corbyn clone? The FPTP system will be dealing us another Tory government if things continue like this.
Starmer is more than half competent but he isn't Corbyn so many on the crank left moan and whine. I get that you may wish the electorate were more sensible and voted for magic grandad but they didn't. They rejected him and massively. Many real people thought Corbyn a coward, a traitor and a crank. He was utterly toxic.
Starmer is a solid, stolid, sensible, mature adult. I would rather we have that than the clown show we have had with Johnson for the last few years!
if you read I said many people real people THOUGHT he was a traitor. That view was expressed to me by many people, and not just those infected with Daily Mailitis. That was based on his position in relation to the IRA, NATO, HAMAS, defence, deterrence etc etc.
Some love Corbyn and cant understand how any one can think badly of him but the reality of electoral performance doesn't lie.
Starmer gets criticism for being dry and unemotional, but I wonder if this has been an advantage over recent months. People may have begun to tire of the ‘erratic’ behaviour of Johnson, which has lost its entertainment value, and would like someone who looks as thought they will actually deal with the things they are worried about. How this will survive a new Conservative leader will be interesting, but whatever they do they are likely to be tainted by Johnson.
1) Benjamin Butterworth isn't a right wing journalist.
2) Sam Tarry's exact words "I am the Shadow Secretary of State for Transport" - I'm sure Louise Haigh would love to find out he's promoted himself to that position.
3) Makes up policy
4) Up for de-selection.
High profile left wing journalist Owen Jones has got very worked up on Twitter today and has ranted about Keir Starmer and has suggested they abuse him in the street if they happen to see him.
It’s a case of Blue on Blue attacks, hold my beer, let’s have Red on Red attacks instead
I wonder if that will make some of the "Corbyn supporting" MPs decide to leave Labour to form a new party, along with Corbyn himself. Maybe with one of the unions which fund Labour switching parties to fund the new party. Saying that Labour under Sir Keir doesn't stand for the worker etc.
Or will they learn from history and know if they did that, chances of having a job as a MP come the next election will be minimal so they will stay within Labour to try and force out Kier to bring back Corbyn, or someone like Long-Bailey.
I wonder if that will make some of the "Corbyn supporting" MPs decide to leave Labour to form a new party, along with Corbyn himself. Maybe with one of the unions which fund Labour switching parties to fund the new party. Saying that Labour under Sir Keir doesn't stand for the worker etc.
Or will they learn from history and know if they did that, chances of having a job as a MP come the next election will be minimal so they will stay within Labour to try and force out Kier to bring back Corbyn, or someone like Long-Bailey.
If Proportional Representation is brought in then the party splitting is inevitable; FPTP is the main reason it has that broad a group of MPs. Likewise the Tory party is likely to split as well in such a situation, with the ERG wing likely to break away, or if they don't a new party might form that attracts Tory moderate MPs.
www.bbc.co.uk
