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How should we fund Social Care?

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  • Hostafan1Hostafan1 Posts: 30,428
    JoeX said:
    Unless I've missed it. It doesn't explain WHY there's a drop in percentage at £50K
    Devon.
  • steveTusteveTu Posts: 1,721
    But don't the richest 1% have roughly the same proportion of the UK's wealth? AND that's the wealth that's known - the poor tend not to have accountants and schemes to hide their wealth and income - the wealthier you are the more is spent on protecting that wealth and hiding it from the tax man.

    UK - South Coast Retirement Campus (East)
  • KT53KT53 Posts: 5,933
    I hadn't realised that about NI.  It does seem unfair that the better paid lose proportionately less of their income to NI, although they do pay twice as much tax on higher earnings which does balance it out somewhat.
  • borgadrborgadr KentPosts: 187
    I'm no economist, but I don't see what's unfair about our tax system. Yes, better paid pay a slightly lower NI rate, but they don't get a higher state pension than anyone else or cost the NHS more. They pay a much higher tax rate (and so they should) which is much more significant than NI. 

    As an example (in England):
    Mrs A earns £200k per year. She pays £69.9k income tax and £7.9k in NI, a total of £77.8k.
    Mr B earns £20k per year. He pays £1.5k income tax and £1.25k NI, a total of £2.7k.

    In other words:
    Mrs A earns 10 x more than Mr B. She only pays 6 x more NI than him. But she pays 47 x more income tax.  Her total tax + NI burden is 28 times higher.
  • Hostafan1Hostafan1 Posts: 30,428
    edited September 2021
    borgadr said:
    I'm no economist, but I don't see what's unfair about our tax system. Yes, better paid pay a slightly lower NI rate, but they don't get a higher state pension than anyone else or cost the NHS more. They pay a much higher tax rate (and so they should) which is much more significant than NI. 

    As an example (in England):
    Mrs A earns £200k per year. She pays £69.9k income tax and £7.9k in NI, a total of £77.8k.
    Mr B earns £20k per year. He pays £1.5k income tax and £1.25k NI, a total of £2.7k.

    In other words:
    Mrs A earns 10 x more than Mr B. She only pays 6 x more NI than him. But she pays 47 x more income tax.  Her total tax + NI burden is 28 times higher.
    And Mrs A is still considerably richer at the end of the year, whilst not necessarily working any harder then Mr B, just lucky enough to be able to do a more highly paid job
    Devon.
  • FireFire LondonPosts: 12,134
    JoeX said:
     I think it’s nice of me to pay more tax than someone else, but that is the opposite of fair.
    Why?

  • JoeXJoeX Posts: 1,698
    Hostafan1 said:
    JoeX said:
    Unless I've missed it. It doesn't explain WHY there's a drop in percentage at £50K
    I’m no tax historian but from what I gather, it started as a flat rate. Not a percentage.  Everyone paid 4d whatever the hell that is.

    In 1975 it became a percentage with an upper limit to how much anyone could pay.

    Then they increased the percentage.

    Then they introduced an upper rate around 2003.

    So higher earners have been contributing increasing amounts since its inception.
  • Hostafan1Hostafan1 Posts: 30,428
    JoeX said:
    Hostafan1 said:
    JoeX said:
    Unless I've missed it. It doesn't explain WHY there's a drop in percentage at £50K
    I’m no tax historian but from what I gather, it started as a flat rate. Not a percentage.  Everyone paid 4d whatever the hell that is.

    In 1975 it became a percentage with an upper limit to how much anyone could pay.

    Then they increased the percentage.

    Then they introduced an upper rate around 2003.

    So higher earners have been contributing increasing amounts since its inception.
    I appreciate what you're saying, but it still doesn't answer the question of why income over 50K is charged at 1/6 of the income earned below that.
    Why 50K, and not, eg 40K or 60K?
    Devon.
  • KT53KT53 Posts: 5,933
    If it was 2003 then it was a Labour Government who capped payment but I'm sure they'll try to find a way to blame Boris :-)  He's mucked up enough things without taking the blame for other people.
  • punkdocpunkdoc Sheffield, Derbyshire border.Posts: 10,332
    This is why NI is the wrong tax.


    Southern trees bear a strange fruit
    Blood on the leaves and blood at the root
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