Is £40,000 really a liveable income for families in the UK?

greggymagic

Graham_Devon wrote: »

It's the marginal tax rate too thats the completely wrong way to think about things.

If I earn £1000 a month, but if I chose to "accidentally" lose my job and not find another, and could get £900 a month from the state all in...is my tax rate therefore 90%?

Of course it's not. But it's how some people prefer to view it. It's completely the wrong way around.

You are not paying any more tax than the next person on the same wage. You are simply losing the benefits generously given to you by the state intended to be there for times of need. Not for lifestyle choices.

I completely understand and am very sympathetic to people when they face the situation of actually being at a loss each month due to working vs staying on benefits....single mothers for instance who would lose their rent and then have to pay for childcare to work. But for people just sitting back enjoying their extra free time I have absolutely no sympathy.

The greed will eventually bring the entire benefits system to its knees. It's ok for those who are picking and choosing, they will simply choose then to work.

But those who will suffer from all this greed is those who DON'T have the choice of working.

It's wrong. Completely wrong and fuelled by greed. The system needs to be changed. But so do peoples mindsets, especially on this marginal tax rate nonsense.

And there it is - rather than talking about marginal tax rates, it's rather "I don't want to work extra hours as I'll lose the gains that the system allows me to abuse"

So in fact the marginal tax rate isn't 72% odd, it's just that you're not paying as much tax as you should on the 25k.

I think when they thought about WTCs and the like, they had in mind that it would be benefiting people who work full time and earn a low wage - not people who can work more but choose to only do 2 days a week.

It's the system that's at fault though.

It's a completely silly system.

RenovationMan

JonnyBravo wrote: »

You mean like you did?

Nope, I didn't. I haven't received any CTC or WTC for years due to my income and when I did 'receive' it, I was mostly paying back an overpayment because the tax man dropped a zero off the end of my salary and paid me a huge amount the first month.

lostinrates

michaels wrote: »

I am now in the position where I could increase my hours but am loathe to do so before the next tax year because I will face a marginal effective tax rate of 72% .

I still fid the 72% staggaring every time you remind us of it, and I agree its a disincintive. I presue you haven't included in that the tax credits/benefits as a tax rebate? Either way, it is a disinsentive as is, IMO, wht you point out, lower but still significant tax rates.

grizzly1911

Wheezy wrote: »

It was a cheap remark and Miliband even managed to screw that one up.

http://www.telegraph.co.uk/news/politics/8927034/Strikes-sketch-Cameron-Jr-stays-home-and-misses-Fathers-Peppa-Pig-impression.html

Yeah I know I heard the original too and it stumped me, for a nano second, as I computed.

grizzly1911

Graham_Devon wrote: »

But those who will suffer from all this greed is those who DON'T have the choice of working and see money taken away from them due to the greed of others merrily suiggesting "well I'm doing nothing wrong, rules said X Y and Z, and i worked within them".

It's wrong. Completely wrong and fuelled by greed. The system needs to be changed. But so do peoples mindsets, especially on this marginal tax rate nonsense.

Don't disagree with your "greed" effect leading to spoiling.

It isn't any different to the tax system either when people avoid tax knowing they are going against the spirit of the tax. Conveniently the Government are lax their too. I guess the posters position/example is probably peanuts in reality. I know there are many self employed people who stretch the boundaries too.

quantic

I've always been brought up to only take assistance if I actually needed it. Maybe thats my problem, can't really hold it against you if you choose to take whats on offer, regardless of if you need it.

lostinrates

Wheezy wrote: »

It was a cheap remark and Miliband even managed to screw that one up.



http://www.telegraph.co.uk/news/politics/8927034/Strikes-sketch-Cameron-Jr-stays-home-and-misses-Fathers-Peppa-Pig-impression.html

You know, I didnt get why nooe picked up o this yesterday...I don't ski but had an idea it would be pricier!

Graham_Devon

grizzly1911 wrote: »

Don't disagree with your "greed" effect leading to spoiling.

It isn't any different to the tax system either when people avoid tax knowing they are going against the spirit of the tax. Conveniently the Government are lax their too. I guess the posters position/example is probably peanuts in reality. I know there are many self employed people who stretch the boundaries too.

Very true.

I'm not sure if it's right or wrong, but I don't seem to feel that someone putting as much down on their tax form to avoid paying too much tax is the same as someone actively declining work and finding ways to increase benefits income.

It's probably a sub concious thing, for at least the person trying to minimise their tax expenditure has actually worked for their money.

I know both are wrong, I just feel one is morally worse. Whether they are or not is another matter...but I think, based on threads on here in the past, most people feel the same.

As with public vs private pensions debates, it's often those claiming benefits who feel those reducing their income tax is far worse and vice versa!#

I'd be willing to bet a FAR higher number of families are taking more from the benefits system than they actually need, then there are families avoiding income tax....and I guess thats why I feel the whole "I'm working within the rules and claiming more benefits" is wrong.

Only takes one family "working within the rules" and claiming benefits when they could be working to swallow up 20 other families entire contribution of tax.

wotsthat

Graham_Devon wrote: »

But those who will suffer from all this greed is those who DON'T have the choice of working and see money taken away from them due to the greed of others merrily suiggesting "well I'm doing nothing wrong, rules said X Y and Z, and i worked within them".

It's wrong. Completely wrong and fuelled by greed. The system needs to be changed. But so do peoples mindsets, especially on this marginal tax rate nonsense.

Well at least no-one will make the mistake of posting their personal circumstances again whilst you are about.

I'm alright though - faced with a marginal tax rate of 72% I'd probably work the extra hours - there's a sunbeam shining down on me now and I can almost feel the hand of god on my shoulder.

silvercar

I think when they thought about WTCs and the like, they had in mind that it would be benefiting people who work full time and earn a low wage - not people who can work more but choose to only do 2 days a week.

That could easily be corrected by raising the minimum number of hours required to get credits to 35 hours a week.

I suspect they don't make that simple change to allow/ encourage one parent families to work school hours only or to encourage people into part time working as a first step out of benefits.