A worrying trend (and a rebuttall to the "1% let alone the 10%" stuff on Social media)?

[????]

The top one per cent of earners will pay almost a third of income tax by 2020 and now nearly half of all working adults don't pay it at all, new figures reveal.

Rapid increases in the tax-free personal allowance since 2010 have led to a sharp decline in the number of people paying any income tax, according to analysis by the Institute for Fiscal Studies (IFS).

The comprehensive study found that the proportion of adults paying income tax fell from 65.7 per cent in 2007/8 to just 56.2 per cent last year.

The fall came despite a surge in the number of people in employment during the period.

The IFS said there was growing evidence of an ?increased reliance on a small number of taxpayers?, with the proportion of total income tax paid by the top one per cent of earners rising from 24.4 per cent to 27.5 per cent at the same time.

The figures mean that some 300,000 individuals now contribute more than a quarter of the Government?s entire income tax take - equivalent to ?49billion or ?140,000 each.

The figures give the lie to Labour claims that the Government?s austerity drive has been targeted unfairly at the poor.

But the IFS warned that the increasing reliance on taxes from the better off was potentially ?unpredictable and risky?. The think tank said tax revenues would ?become more sensitive? to the income growth of a relatively small group of taxpayers.

Under George Osborne the personal allowance has risen from ?6,475 to ?11,000, lifting millions of people out of the basic rate of income tax entirely. The Chancellor has pledged to raise the allowance to ?12,500 by 2020 as part of a drive to position the Tories as the ?workers? party?.

[Loz]

And if you start to examine the net givers vs the net takers...

[Blah Blah]

It's a reflection of the gap between those at the top and those at the bottom.

Plato argued the the ratio between top salary and bottom salary should be no more than 6-1. JP Morgan argued no more than 20-1. Today the ratio can be in the 1000s-1.

What those figures say to me, is just how imbalaced the employment market is, in relation to cost of living etc. The average salary is 27k, but most people in full time work don't earn it - that too reflects how that wage gap skews average figures.

We've been here before of course. The entire industrial revolution was enabled by such inequality of earnings, and things like employment, housing and welfare rights are historically a recent thing.

But when government tries to do something to address the imbalance (like rising min wages etc) they run into a ton of other problems.

We live in a plutocracy (always have) and you can't have true democracy with that. It's not really capitalism that is the problem either, but the form of capitalism that plutocrats foist upon us.

[numbers]

Thought all the top earners had it stashed overseas.

[????]

I don't disagree with you much on this Blah, especially the wage gap thing.

I think this is now very difficult to fix because the tax position is very precarious in terms of raising them. For every millionaire luvy who'd pay 60% ( admirable but fairly easy when you're in the ?10m+ wealth ) there's a fair few quiet high earners who wouldn't (as France found out) and in the UK these are even more important for tax revenue. Plus even a basic rate increase say inadvertently most effects the lower end of even 40% tax payers who are already pretty squeezed and take less out and have less support eg tax credits/child allowance etc.

We need people to start dying earlier (a joke) or a medical breakthrough to reduce significant treatment costs in something like cancer

[Mick Mac]

All those people screaming "save the NHS" - not surprising as it seems 44% of the population are getting it for free.

[Jeremy]

Blah Blah Wrote:

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> JP Morgan argued no more than 20-1

Jamie Dimon is on $27 million...

[Nigello]

Flat tax?

[JohnL]

Everyone's poor, except the rich.

[Blah Blah]

I agree with all of that ????, which is why I argue that the emphasis should be on finding ways to close the gap, or raise the wages of the 90% rather than increasing the taxes of those at the top. I also think that 50p is about the limit on top tax. As you say, beyond that you actually collect less in receipts. We are always competing with lower tax thresholds elsewhere.

[Earl Aelfheah]

Instead of a minimum wage, perhaps we ought to be looking for a maximum wage (as a multiple of average earnings for example). Dunno.

[Jeremy]

rahrahrah Wrote:

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> perhaps we ought to be looking for a maximum wage

I suspect capping the salary of top end high earners would result in only a very small trickle-down effect to the rest of us.

[????]

In reality we do need 'the state' to do things more efficiently - 'the state' hasn't a very good record in that - and the alternatives tried haven't been very effective, partly through execution but partly through entrenched interest opposing them and/or just the sheer difficulty of creating change in a vast bureaucracy..

[LondonMix]

That would be a disaster for so many reasons...

rahrahrah Wrote:

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> Instead of a minimum wage, perhaps we ought to be

> looking for a maximum wage (as a multiple of

> average earnings for example). Dunno.

[uncleglen]

The 'state' ,or public sector I suppose has many people working for it that have no social conscience and since it is almost impossible to sack people who work in the public sector unless they do something really dire, and I mean REALLY dire, then there is a lot of unproductive almost dead wood.

[Blah Blah]

It is true that it is extremely difficult to fire someone in the public sector, but the public sector is not responsible for pay differentials. If anything, it is the unions of the public sector that have fought for better wages for those at the bottom. And that is also why the public sector is no longer the torch bearer for the worst paid jobs. That accolade now belongs to the private sector again. The problem with that of course is that our taxes pay those salaries whereas the private sector can avoid tax on profit and pay the lowest wages. I think it's within the private sector that work needs to be done on this but that is always a fine line between attracting business and driving it away.

It's a complex thing, difficult to change or fix and of which (as ???? says) bureaucracy is a major obstacle. I'd also add into that the lobbying powers of those with most to lose.

[ratty]

uncleglen Wrote:

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> The 'state' ,or public sector I suppose has many

> people working for it that have no social

> conscience and since it is almost impossible to

> sack people who work in the public sector unless

> they do something really dire, and I mean REALLY

> dire, then there is a lot of unproductive almost

> dead wood.

I think progress is being made on this point but probably too slow. Seems to me however it is the liability insurers who are holding progress back, probably because unions have too much say in public sector. Insurers are scared of big payouts so instruct and advise to be risk averse.

Not way too much though. Just thinking of me dad spinning in his grave there.