Willetts targets the older generations

Arklight

http://www.independent.co.uk/news/business/news/baby-boomers-must-pay-to-fund-their-care-or-inflict-15p-income-tax-rise-on-their-children-lord-a8237371.html

Baby boomers must pay to fund the spiralling costs of health and social care or risk inflicting crippling tax hikes on their children and grandchildren, Lord Willetts will warn in a major speech on Monday.

“The time has come when we boomers are going to have to reach into our own pockets,” the Tory peer and chair of the Resolution Foundation will say.

Considering research shows that all but the best performing Boomers take out £200k more than they put in, is it time they put it back? There are few of this generaion for example that don't / won't retire with at least this in housing wealth.


Willetts


Boomers

I personally would be in favour of every boomer being given one of those thermometers like you see outside churches that want to fix the roof, which shows how much they have to pay in before they break even.

Rinoa

Every £ the boomers pay in health care/nursing care, is one less pound their children will inherit.

ukcarper

35% income tax similar to what I paid in my 20s.

Arklight

Rinoa wrote: »

Every £ the boomers pay in health care/nursing care, is one less pound their children will inherit.

That's a good point. We should abolish any kind of taxation in favour of feudal inheritance.

Not sure how many nurses that will train though.

lisyloo

Rinoa wrote: »

Every £ the boomers pay in health care/nursing care, is one less pound their children will inherit.

and every £ they don't pay is one more their children will pay in tax.
Health care is currently free.
As far as personal care goes I think those with excess funds should pay for it rather than have it fall on general taxation.

I will personally lose if that happens so this is not a vested interest

Malthusian

ukcarper wrote: »

35% income tax similar to what I paid in my 20s.

Similar to what we pay now.

35% income tax & 5.5% employee NI & 8.5% employer NI = 48% overall tax rate on the relevant band of earnings.

20% income tax & 12% employee NI & 13.8% employer NI = 45.8% overall tax rate on the relevant band of earnings. So about 2 percentage points difference.

Of course this only applies to earnings between the lower and upper earnings bands and allowances have changed considerably since then.

If income tax went up to 35% for the current generation without any change in National Insurance, they would be paying considerably more tax than people in 1975. Even after allowing for changes in allowances. However the notion of a 15p rise in income tax is of course plucked out of thin air and has absolutely nothing to do with social care.

Linton

ISTM he has mis-identified the key issue. The actual problem I see is that it has been government policy to provide tax advantages to those people living off income from assets compared with those who get their income from employment. Now it so happens that many of the people living off income from assets are older, but that certainly doesnt apply to everyone over 50 plus there must be a fair number of younger people who are also living off assets.

In particular:
- the employed pay NI but you dont pay NI on unearned income. Why not?
- the very generous S&S ISA limits mean if one is relatively rich it is possible to build up sufficient tax free income to live on. The employed cannot shelter their income from tax.

A very simple start to remedying the situation is to merge NI into income tax and CGT. Next step, decrease the ISA annual contribution limits to something closer to that which would be just affordable by the average person.

As it happens I would be significantly disadvantaged by both proposals.

Arklight

Boomers have had massive clout in forming government policy. As a generation they have been highly engaged politically, tend to be clear on what policies they want, and prepared to turn out and vote for them en masse.

I don't think they've intentionally ripped off the younger generations, but four decades of one government after another promising the same demographic a Scandanavian quality of life and American levels of taxation is now not adding up.

The reality is that whatever the next government is will need the Millennial vote. You can see with Brexit that the Boomer vote just about tipped Leave over the line, and barely got a gasping Tory Party into another coalition government, but it's not enough for the future.

Millennials aren't going to vote for a party that makes them pay for things that they won't get themselves. Obviously the challenge is how we deal with that fairly as a country. I don't think for instance that people who have saved their whole lives should have it all taken off them in care home fees.

But if we don't take money from people who have money, where does it come from?

LHW99

Possibly abolishing or at least increasing the NI upper earnings limit would be a good start. £45k seems quite low these days for NI to reduce to 2%

Out,_Vile_Jelly

Who was that other poster who was hysterically obsessed with boomers?

ukcarper

Malthusian wrote: »

Similar to what we pay now.

35% income tax & 5.5% employee NI & 8.5% employer NI = 48% overall tax rate on the relevant band of earnings.

20% income tax & 12% employee NI & 13.8% employer NI = 45.8% overall tax rate on the relevant band of earnings. So about 2 percentage points difference.

Of course this only applies to earnings between the lower and upper earnings bands and allowances have changed considerably since then.

If income tax went up to 35% for the current generation without any change in National Insurance, they would be paying considerably more tax than people in 1975. Even after allowing for changes in allowances. However the notion of a 15p rise in income tax is of course plucked out of thin air and has absolutely nothing to do with social care.

I did make that post tongue in check, but by late 70s employers in was 10% so 50% overall and personal allowance has outstripped inflation. But then indirect tax is higher.