IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
That's completely beside the point: the tax and benefits system should not have cliffs where the marginal tax rate shoots up well above 100%.
We should be encouraging Casino to work, and to generate value and tax revenues.
The impact of this move is to discourage a large portion of the population from working.
Madness.
... a large portion ... guffaws.
How many people are affected? A very tiny portion of the UK earn over 100k per annum, and they only need childcare for a very small portion of their working life.
How many people are affected by cliff edges and tax and benefits rates shooting upto around 100%?
Many millions of people actually.
For starters anyone on UC paying IC and NI is already at 70% marginal tax rate even before anything else. These cliff edges exist throughout our NYC skyline tax code and it is damaging.
Of course, cliff edges are bad. The question is why pb.com is fixated on this cliff edge.
Because PB is full of middle class/high earners.
I think I'm the only working class PBer.
Jolly well done to you.
The 8th baronet always used to say to me that the poor are always with us, and we mustn't patronise them as they do what they can. That's always been a mantra I have lived by.
Of course, he was referring to the beaters on the Passmore grouse moors, but I'm sure it applies equally to PB.com.
As somebody once observed about me
'You're as working class as foie gras.'
Apparently marrying a working class woman doesn't make me working class.
"Disposal income per person will fall by 6% this financial year and next, according to the OBR, representing the largest two-year fall in living standards since records began in the 1950s.
That could lead to people dipping into their savings to pay for things."
22m have less than £1k of savings, half of which have less than £100 and they are going to be the ones hit hardest......
The largest two-year fall in living standars since the 1950s - true, but that takes us back to, what, 2014 standards? Which weren't exactly penury. And given that the last two years have seen us paying for lockdown and the impact of war in Ukraine, not unexpected - when has there been a confluence of events like this?
And what do the BBC expect to be done about this? One strongly suspects they expect the chancellor to conjure up money from nowhere. Which was what got us into this mess in the first place.
As an intellectual exercise, to what year would PB readers be willing to retreat, in terms of living standards, before it would be considered unacceptable? To the nearest decade for older readers….
It is completely perverse to accept any decline in living standards. It is absolutely being inflicted deliberately by an ideologically-crazed minority peddling climate alarmism, and we are badly in need of a counter-narrative.
There are dozens of reasons for accepting declining living standards. We all have our hobbyhorses. I would, for example, accept a future where I was poorer - let's say one in which I need to work for another 12 months before retirement to retire on the same level of comfort - in return for a UK less trewn with graffiti and litter and with more trains. Others will have different priorities for what the state might do which might not equal 'living standards', or at least easily measurable ones.
If for example we suddenly had no smartphones or streaming tv would people be less happy. Probably not. Technology has made a small number of uber nerds rich but as time goes on its contribution to human happiness becomes less and less. Would i want to live without a refrigarator..hell no. Could i live without streaming tv. Of course.
That was, I'm sure, the argument of Communists in eastern Europe.
If people in the UK didn't have smartphones, and people in France did, I think people would notice.
Thats the point. In eastern europe they did have unreliable cars and lacked basic consumer goods. that hasnt been true in the west since at least the 60s or 70s. And im talking of a situation where no country has a smartphone not one does one doesnt. Do you think smartphones have been major beneficiaries for humanity because i could certainly live without them.
Every generation can look back at life 25 years ago and say "hey, life was pretty good back then because we had [y] and do we really need new fangled [x]".
So, people in the 1930s could have said "Life in the 1910s was pretty good; I mean we didn't have cars yet, with all that nasty pollution and the risk of getting knocked over. And who actually needs to go to the cinema anyway?"
And people in the 1950s could say "Life in the 1930s was pretty good. They already the cinema and cars, which is all you really need to lead a modern life. Do we really need jetplanes? And you used to be able to send your washing out for almost nothing. Is it really an improvement to have an unreliable and expensive machine and to do it yourself?"
Then people in the 1970s would say "Life in the 1950s was great. Already you innovations like washing machines and fridges than make home care simple. And the railway system was great - you could get anywhere in the UK cheaply. All there is today is colour TV and ridiculously expensive VCRs and the shows are exactly the same!"
Etcetera. Etcetera.
If we didn't advance technologically and France did. People would notice. And they would be spitting mad.
The difference is the tech elite actually shield their kids from tablets and smartphones. They know. The point is as im sure you will understand the marginal benefit of each wave of technological development is less and less and the associated costs more and more negative so that at some point the costs outweigh the benefits. We are arguably close to this point now which is why the dreams of silicon valley uber nerds will remain dreams,
Absurd assertions without evidence.
And as a member of the tech elite, I can assure you that I teach my kids how to use tech, I don't shield them from it.
ok an example. Social media like facebook and twitter. Have they contributed to the sum of human happiness in the same way as the invention of the automobile or refrigarator. I think not.
You honestly think that Facebook and Twitter are even in the top 10,000 innovations of this century?
Here's a question: has that modern (Communist and post-Communist) China had made no significant technological advancements/innovations that have significantly changed the world? Computers, the Internet, GNSS/GPS, many medical advances and drugs, all came from the west.
China have been very good at copying/productionising, but what major things have they invented? Widening it out, what major scientific breakthroughs have they made?
I'm not saying there are not any; I just can't immediately think of any.
"Disposal income per person will fall by 6% this financial year and next, according to the OBR, representing the largest two-year fall in living standards since records began in the 1950s.
That could lead to people dipping into their savings to pay for things."
22m have less than £1k of savings, half of which have less than £100 and they are going to be the ones hit hardest......
The largest two-year fall in living standars since the 1950s - true, but that takes us back to, what, 2014 standards? Which weren't exactly penury. And given that the last two years have seen us paying for lockdown and the impact of war in Ukraine, not unexpected - when has there been a confluence of events like this?
And what do the BBC expect to be done about this? One strongly suspects they expect the chancellor to conjure up money from nowhere. Which was what got us into this mess in the first place.
As an intellectual exercise, to what year would PB readers be willing to retreat, in terms of living standards, before it would be considered unacceptable? To the nearest decade for older readers….
It is completely perverse to accept any decline in living standards. It is absolutely being inflicted deliberately by an ideologically-crazed minority peddling climate alarmism, and we are badly in need of a counter-narrative.
There are dozens of reasons for accepting declining living standards. We all have our hobbyhorses. I would, for example, accept a future where I was poorer - let's say one in which I need to work for another 12 months before retirement to retire on the same level of comfort - in return for a UK less trewn with graffiti and litter and with more trains. Others will have different priorities for what the state might do which might not equal 'living standards', or at least easily measurable ones.
If for example we suddenly had no smartphones or streaming tv would people be less happy. Probably not. Technology has made a small number of uber nerds rich but as time goes on its contribution to human happiness becomes less and less. Would i want to live without a refrigarator..hell no. Could i live without streaming tv. Of course.
That was, I'm sure, the argument of Communists in eastern Europe.
If people in the UK didn't have smartphones, and people in France did, I think people would notice.
Thats the point. In eastern europe they did have unreliable cars and lacked basic consumer goods. that hasnt been true in the west since at least the 60s or 70s. And im talking of a situation where no country has a smartphone not one does one doesnt. Do you think smartphones have been major beneficiaries for humanity because i could certainly live without them.
Every generation can look back at life 25 years ago and say "hey, life was pretty good back then because we had [y] and do we really need new fangled [x]".
So, people in the 1930s could have said "Life in the 1910s was pretty good; I mean we didn't have cars yet, with all that nasty pollution and the risk of getting knocked over. And who actually needs to go to the cinema anyway?"
And people in the 1950s could say "Life in the 1930s was pretty good. They already the cinema and cars, which is all you really need to lead a modern life. Do we really need jetplanes? And you used to be able to send your washing out for almost nothing. Is it really an improvement to have an unreliable and expensive machine and to do it yourself?"
Then people in the 1970s would say "Life in the 1950s was great. Already you innovations like washing machines and fridges than make home care simple. And the railway system was great - you could get anywhere in the UK cheaply. All there is today is colour TV and ridiculously expensive VCRs and the shows are exactly the same!"
Etcetera. Etcetera.
If we didn't advance technologically and France did. People would notice. And they would be spitting mad.
The difference is the tech elite actually shield their kids from tablets and smartphones. They know. The point is as im sure you will understand the marginal benefit of each wave of technological development is less and less and the associated costs more and more negative so that at some point the costs outweigh the benefits. We are arguably close to this point now which is why the dreams of silicon valley uber nerds will remain dreams,
Absurd assertions without evidence.
And as a member of the tech elite, I can assure you that I teach my kids how to use tech, I don't shield them from it.
ok an example. Social media like facebook and twitter. Have they contributed to the sum of human happiness in the same way as the invention of the automobile or refrigarator. I think not.
You honestly think that Facebook and Twitter are even in the top 10,000 innovations of this century?
ok well the smartphone then. I think that counts. Do you regard zombies walking down the street staring at their phones as a societal improvement.
Does anyone have that old photo of everyone on a bus or train with their faces buried in the newspaper handy?
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I mean, that's all well and good. But where does it end? Should I also not have my children's schooling paid for? Or my healthcare?
My wife is a midwife and so it has been completely uneconomical for her to return to work while we have young children (other than the minimum amount to accrue maternity leave between children). Why would she work for practically zero marginal net income uplift and lots of stress?
Economically, the end result is likely greater shortfalls in a skilled part of the workforce until both children are in school in a few years' time.
For us we can manage fine as we are and she enjoys time with the kids, but I'm not sure that large cliff edges in the tax system are the best way to encourage economic growth.
I am not defending cliff edges. I have fallen off too many of them personally. But it is still a question of priorities. And those earning over £100k are not it.
"Disposal income per person will fall by 6% this financial year and next, according to the OBR, representing the largest two-year fall in living standards since records began in the 1950s.
That could lead to people dipping into their savings to pay for things."
22m have less than £1k of savings, half of which have less than £100 and they are going to be the ones hit hardest......
The largest two-year fall in living standars since the 1950s - true, but that takes us back to, what, 2014 standards? Which weren't exactly penury. And given that the last two years have seen us paying for lockdown and the impact of war in Ukraine, not unexpected - when has there been a confluence of events like this?
And what do the BBC expect to be done about this? One strongly suspects thvey expect the chancellor to conjure up money from nowhere. Which was what got us into this mess in the first place.
Mine already fell 10.pc will be ameliorated slightly by the state pension increase
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
But it doesn't make any sense that someone earning £130k would be better off in practice, in terms of take home pay etc, reducing their salary to £100k, which is what this situation effectively is. It is total madness.
I've been based in London with work recently and think that these people, earning £100k, are not even vaguely rich in this context, where a terraced house costs £700k. If you are earning £5k per month (after pensions) a large chunk of money would go servicing a mortgage, it is not like school/nursery fees are just a trivial expense, you can't actually afford to pay them.
The system is creating bizarre incentives, ie to work less, or to move out of London and the south east; this has caused a lot of problems within the public sector.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
The trouble is that old socialists, like @NickPalmer, agree with me.
The £100k cliff-edge is retarded and totally counterproductive. And it's not right that two earners in a household earning £95k each get all the help and none of the extra tax and a household with one earner on £105k and another on zero get nothing. Have a think about what that incentivises for a minute.
As @DougSeal said on the previous thread £100k today is equivalent to about £55k in 1999 prices. It's a yardstick now of a successful career built over many years of hard graft, not of "repulsive" wealth and your use of such language is disgusting.
The point is that there is lots of unfairness in our tax and benefit system.
Sure .. in an ideal world, there should not be and it should be fixed.
But, I doubt if anyone would pick on this as the most serious and glaring unfairness that needs urgent attention (except on pb.com).
If you follow my posts you'll see (earlier today in fact) that as part of a package for growth I have advocated (a) further streamlining the UC withdrawal taper (b) reducing tax on young people and student loans and (c) removing the £100k cliff edge.
I would pay for it upfront by trimming pensioner benefits. In the longer term I expect it would easily pay for itself.
It's all about aspiration, getting people into work and making work pay, which benefits all of us.
Good evening
Just heard a pensioner complain that the 10.1% increase in her pension will leave her worse off as she moves into the higher tax band
"Disposal income per person will fall by 6% this financial year and next, according to the OBR, representing the largest two-year fall in living standards since records began in the 1950s.
That could lead to people dipping into their savings to pay for things."
22m have less than £1k of savings, half of which have less than £100 and they are going to be the ones hit hardest......
The largest two-year fall in living standars since the 1950s - true, but that takes us back to, what, 2014 standards? Which weren't exactly penury. And given that the last two years have seen us paying for lockdown and the impact of war in Ukraine, not unexpected - when has there been a confluence of events like this?
And what do the BBC expect to be done about this? One strongly suspects they expect the chancellor to conjure up money from nowhere. Which was what got us into this mess in the first place.
As an intellectual exercise, to what year would PB readers be willing to retreat, in terms of living standards, before it would be considered unacceptable? To the nearest decade for older readers….
Living standards in the 90s were perfectly fine. Foreign travel relatively cheap by then and affordable homes with still plenty of technology around for entertainment.
But there was a lot of prejudice around then, racism, sexism and homophobia. Also the dangers of climate change were not appreciated. Great if you’re a white male. Not good if you’re anyone else.
I dont know if you were alive then but certainly by the late 90s there wasnt a great deal of racism and homophobia. Queer as Folk a groundbreaking tv show on gays came out in 1999 and actually showed a gay man having sex with a 15 year old boy.
Did you actually live through the Nineties as a gay man, or are you basing your conclusions about an entire decade on the existence of a TV programme?
Plenty of out and proud gays in london in the 90s. Some where i worked too. They didnt suffer particular prejudice.
London in the 90s was far more progressive and woke than the rest of the U.K., and a far better place for it.
Oh definitely. A gay man in Barnsley would be a different prospect but that is still true today. Its why gays migrate to the metropolitan centres like london and manchester.
The biggest gayer I know is born and bred in Barnsley.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
"Disposal income per person will fall by 6% this financial year and next, according to the OBR, representing the largest two-year fall in living standards since records began in the 1950s.
That could lead to people dipping into their savings to pay for things."
22m have less than £1k of savings, half of which have less than £100 and they are going to be the ones hit hardest......
The largest two-year fall in living standars since the 1950s - true, but that takes us back to, what, 2014 standards? Which weren't exactly penury. And given that the last two years have seen us paying for lockdown and the impact of war in Ukraine, not unexpected - when has there been a confluence of events like this?
And what do the BBC expect to be done about this? One strongly suspects they expect the chancellor to conjure up money from nowhere. Which was what got us into this mess in the first place.
As an intellectual exercise, to what year would PB readers be willing to retreat, in terms of living standards, before it would be considered unacceptable? To the nearest decade for older readers….
It is completely perverse to accept any decline in living standards. It is absolutely being inflicted deliberately by an ideologically-crazed minority peddling climate alarmism, and we are badly in need of a counter-narrative.
There are dozens of reasons for accepting declining living standards. We all have our hobbyhorses. I would, for example, accept a future where I was poorer - let's say one in which I need to work for another 12 months before retirement to retire on the same level of comfort - in return for a UK less trewn with graffiti and litter and with more trains. Others will have different priorities for what the state might do which might not equal 'living standards', or at least easily measurable ones.
If for example we suddenly had no smartphones or streaming tv would people be less happy. Probably not. Technology has made a small number of uber nerds rich but as time goes on its contribution to human happiness becomes less and less. Would i want to live without a refrigarator..hell no. Could i live without streaming tv. Of course.
That was, I'm sure, the argument of Communists in eastern Europe.
If people in the UK didn't have smartphones, and people in France did, I think people would notice.
Thats the point. In eastern europe they did have unreliable cars and lacked basic consumer goods. that hasnt been true in the west since at least the 60s or 70s. And im talking of a situation where no country has a smartphone not one does one doesnt. Do you think smartphones have been major beneficiaries for humanity because i could certainly live without them.
Every generation can look back at life 25 years ago and say "hey, life was pretty good back then because we had [y] and do we really need new fangled [x]".
So, people in the 1930s could have said "Life in the 1910s was pretty good; I mean we didn't have cars yet, with all that nasty pollution and the risk of getting knocked over. And who actually needs to go to the cinema anyway?"
And people in the 1950s could say "Life in the 1930s was pretty good. They already the cinema and cars, which is all you really need to lead a modern life. Do we really need jetplanes? And you used to be able to send your washing out for almost nothing. Is it really an improvement to have an unreliable and expensive machine and to do it yourself?"
Then people in the 1970s would say "Life in the 1950s was great. Already you innovations like washing machines and fridges than make home care simple. And the railway system was great - you could get anywhere in the UK cheaply. All there is today is colour TV and ridiculously expensive VCRs and the shows are exactly the same!"
Etcetera. Etcetera.
If we didn't advance technologically and France did. People would notice. And they would be spitting mad.
The difference is the tech elite actually shield their kids from tablets and smartphones. They know. The point is as im sure you will understand the marginal benefit of each wave of technological development is less and less and the associated costs more and more negative so that at some point the costs outweigh the benefits. We are arguably close to this point now which is why the dreams of silicon valley uber nerds will remain dreams,
Absurd assertions without evidence.
And as a member of the tech elite, I can assure you that I teach my kids how to use tech, I don't shield them from it.
ok an example. Social media like facebook and twitter. Have they contributed to the sum of human happiness in the same way as the invention of the automobile or refrigarator. I think not.
You honestly think that Facebook and Twitter are even in the top 10,000 innovations of this century?
ok well the smartphone then. I think that counts. Do you regard zombies walking down the street staring at their phones as a societal improvement.
Does anyone have that old photo of everyone on a bus or train with their faces buried in the newspaper handy?
Who needs streaming TV or a smartphone (as opposed to a plain mobey) when one has a Penguin paperback? Quite the innovation in its day.
"Disposal income per person will fall by 6% this financial year and next, according to the OBR, representing the largest two-year fall in living standards since records began in the 1950s.
That could lead to people dipping into their savings to pay for things."
22m have less than £1k of savings, half of which have less than £100 and they are going to be the ones hit hardest......
The largest two-year fall in living standars since the 1950s - true, but that takes us back to, what, 2014 standards? Which weren't exactly penury. And given that the last two years have seen us paying for lockdown and the impact of war in Ukraine, not unexpected - when has there been a confluence of events like this?
And what do the BBC expect to be done about this? One strongly suspects they expect the chancellor to conjure up money from nowhere. Which was what got us into this mess in the first place.
As an intellectual exercise, to what year would PB readers be willing to retreat, in terms of living standards, before it would be considered unacceptable? To the nearest decade for older readers….
It is completely perverse to accept any decline in living standards. It is absolutely being inflicted deliberately by an ideologically-crazed minority peddling climate alarmism, and we are badly in need of a counter-narrative.
There are dozens of reasons for accepting declining living standards. We all have our hobbyhorses. I would, for example, accept a future where I was poorer - let's say one in which I need to work for another 12 months before retirement to retire on the same level of comfort - in return for a UK less trewn with graffiti and litter and with more trains. Others will have different priorities for what the state might do which might not equal 'living standards', or at least easily measurable ones.
If for example we suddenly had no smartphones or streaming tv would people be less happy. Probably not. Technology has made a small number of uber nerds rich but as time goes on its contribution to human happiness becomes less and less. Would i want to live without a refrigarator..hell no. Could i live without streaming tv. Of course.
That was, I'm sure, the argument of Communists in eastern Europe.
If people in the UK didn't have smartphones, and people in France did, I think people would notice.
Thats the point. In eastern europe they did have unreliable cars and lacked basic consumer goods. that hasnt been true in the west since at least the 60s or 70s. And im talking of a situation where no country has a smartphone not one does one doesnt. Do you think smartphones have been major beneficiaries for humanity because i could certainly live without them.
Every generation can look back at life 25 years ago and say "hey, life was pretty good back then because we had [y] and do we really need new fangled [x]".
So, people in the 1930s could have said "Life in the 1910s was pretty good; I mean we didn't have cars yet, with all that nasty pollution and the risk of getting knocked over. And who actually needs to go to the cinema anyway?"
And people in the 1950s could say "Life in the 1930s was pretty good. They already the cinema and cars, which is all you really need to lead a modern life. Do we really need jetplanes? And you used to be able to send your washing out for almost nothing. Is it really an improvement to have an unreliable and expensive machine and to do it yourself?"
Then people in the 1970s would say "Life in the 1950s was great. Already you innovations like washing machines and fridges than make home care simple. And the railway system was great - you could get anywhere in the UK cheaply. All there is today is colour TV and ridiculously expensive VCRs and the shows are exactly the same!"
Etcetera. Etcetera.
If we didn't advance technologically and France did. People would notice. And they would be spitting mad.
The difference is the tech elite actually shield their kids from tablets and smartphones. They know. The point is as im sure you will understand the marginal benefit of each wave of technological development is less and less and the associated costs more and more negative so that at some point the costs outweigh the benefits. We are arguably close to this point now which is why the dreams of silicon valley uber nerds will remain dreams,
Absurd assertions without evidence.
And as a member of the tech elite, I can assure you that I teach my kids how to use tech, I don't shield them from it.
ok an example. Social media like facebook and twitter. Have they contributed to the sum of human happiness in the same way as the invention of the automobile or refrigarator. I think not.
You honestly think that Facebook and Twitter are even in the top 10,000 innovations of this century?
Here's a question: has that modern (Communist and post-Communist) China had made no significant technological advancements/innovations that have significantly changed the world? Computers, the Internet, GNSS/GPS, many medical advances and drugs, all came from the west.
China have been very good at copying/productionising, but what major things have they invented? Widening it out, what major scientific breakthroughs have they made?
I'm not saying there are not any; I just can't immediately think of any.
"Disposal income per person will fall by 6% this financial year and next, according to the OBR, representing the largest two-year fall in living standards since records began in the 1950s.
That could lead to people dipping into their savings to pay for things."
22m have less than £1k of savings, half of which have less than £100 and they are going to be the ones hit hardest......
The largest two-year fall in living standars since the 1950s - true, but that takes us back to, what, 2014 standards? Which weren't exactly penury. And given that the last two years have seen us paying for lockdown and the impact of war in Ukraine, not unexpected - when has there been a confluence of events like this?
And what do the BBC expect to be done about this? One strongly suspects they expect the chancellor to conjure up money from nowhere. Which was what got us into this mess in the first place.
As an intellectual exercise, to what year would PB readers be willing to retreat, in terms of living standards, before it would be considered unacceptable? To the nearest decade for older readers….
It is completely perverse to accept any decline in living standards. It is absolutely being inflicted deliberately by an ideologically-crazed minority peddling climate alarmism, and we are badly in need of a counter-narrative.
There are dozens of reasons for accepting declining living standards. We all have our hobbyhorses. I would, for example, accept a future where I was poorer - let's say one in which I need to work for another 12 months before retirement to retire on the same level of comfort - in return for a UK less trewn with graffiti and litter and with more trains. Others will have different priorities for what the state might do which might not equal 'living standards', or at least easily measurable ones.
If for example we suddenly had no smartphones or streaming tv would people be less happy. Probably not. Technology has made a small number of uber nerds rich but as time goes on its contribution to human happiness becomes less and less. Would i want to live without a refrigarator..hell no. Could i live without streaming tv. Of course.
That was, I'm sure, the argument of Communists in eastern Europe.
If people in the UK didn't have smartphones, and people in France did, I think people would notice.
Thats the point. In eastern europe they did have unreliable cars and lacked basic consumer goods. that hasnt been true in the west since at least the 60s or 70s. And im talking of a situation where no country has a smartphone not one does one doesnt. Do you think smartphones have been major beneficiaries for humanity because i could certainly live without them.
Every generation can look back at life 25 years ago and say "hey, life was pretty good back then because we had [y] and do we really need new fangled [x]".
So, people in the 1930s could have said "Life in the 1910s was pretty good; I mean we didn't have cars yet, with all that nasty pollution and the risk of getting knocked over. And who actually needs to go to the cinema anyway?"
And people in the 1950s could say "Life in the 1930s was pretty good. They already the cinema and cars, which is all you really need to lead a modern life. Do we really need jetplanes? And you used to be able to send your washing out for almost nothing. Is it really an improvement to have an unreliable and expensive machine and to do it yourself?"
Then people in the 1970s would say "Life in the 1950s was great. Already you innovations like washing machines and fridges than make home care simple. And the railway system was great - you could get anywhere in the UK cheaply. All there is today is colour TV and ridiculously expensive VCRs and the shows are exactly the same!"
Etcetera. Etcetera.
If we didn't advance technologically and France did. People would notice. And they would be spitting mad.
The difference is the tech elite actually shield their kids from tablets and smartphones. They know. The point is as im sure you will understand the marginal benefit of each wave of technological development is less and less and the associated costs more and more negative so that at some point the costs outweigh the benefits. We are arguably close to this point now which is why the dreams of silicon valley uber nerds will remain dreams,
Absurd assertions without evidence.
And as a member of the tech elite, I can assure you that I teach my kids how to use tech, I don't shield them from it.
ok an example. Social media like facebook and twitter. Have they contributed to the sum of human happiness in the same way as the invention of the automobile or refrigarator. I think not.
You honestly think that Facebook and Twitter are even in the top 10,000 innovations of this century?
ok well the smartphone then. I think that counts. Do you regard zombies walking down the street staring at their phones as a societal improvement.
How about you ask the sensible question: what inventions in the last twenty years have the potential to change the world to the same degree as the refrigerator?
And I can come up with three, if you like:
(1) Modern solar panels, which will revolutionize the cost of energy over the next hundred years.
(2) Battery technology, which harnesses that abundant energy and allows it to be used in places and in ways that were simply inconceivable.
(And these two mean that people in tiny villages in Africa can look forward to having a refrigerator in the near future.)
(3) Artificial intelligence and Machine Learning: ChatGPT is just the merest glimpse of what we're going to get.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
That's completely beside the point: the tax and benefits system should not have cliffs where the marginal tax rate shoots up well above 100%.
We should be encouraging Casino to work, and to generate value and tax revenues.
The impact of this move is to discourage a large portion of the population from working.
Madness.
... a large portion ... guffaws.
How many people are affected? A very tiny portion of the UK earn over 100k per annum, and they only need childcare for a very small portion of their working life.
How many people are affected by cliff edges and tax and benefits rates shooting upto around 100%?
Many millions of people actually.
For starters anyone on UC paying IC and NI is already at 70% marginal tax rate even before anything else. These cliff edges exist throughout our NYC skyline tax code and it is damaging.
Of course, cliff edges are bad. The question is why pb.com is fixated on this cliff edge.
Because PB is full of middle class/high earners.
I think I'm the only working class PBer.
Jolly well done to you.
The 8th baronet always used to say to me that the poor are always with us, and we mustn't patronise them as they do what they can. That's always been a mantra I have lived by.
Of course, he was referring to the beaters on the Passmore grouse moors, but I'm sure it applies equally to PB.com.
As somebody once observed about me
'You're as working class as foie gras.'
Apparently marrying a working class woman doesn't make me working class.
You've done your bit by marrying one. I trust you remind her of that on a daily basis, and that she is grateful to a suitable extent.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
But it doesn't make any sense that someone earning £130k would be better off in practice, in terms of take home pay etc, reducing their salary to £100k, which is what this situation effectively is. It is total madness.
I've been based in London with work recently and think that these people, earning £100k, are not even vaguely rich in this context, where a terraced house costs £700k. If you are earning £5k per month (after pensions) a large chunk of money would go servicing a mortgage, it is not like school/nursery fees are just a trivial expense, you can't actually afford to pay them.
The system is creating bizarre incentives, ie to work less, or to move out of London and the south east; this has caused a lot of problems within the public sector.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I mean, that's all well and good. But where does it end? Should I also not have my children's schooling paid for? Or my healthcare?
My wife is a midwife and so it has been completely uneconomical for her to return to work while we have young children (other than the minimum amount to accrue maternity leave between children). Why would she work for practically zero marginal net income uplift and lots of stress?
Economically, the end result is likely greater shortfalls in a skilled part of the workforce until both children are in school in a few years' time.
For us we can manage fine as we are and she enjoys time with the kids, but I'm not sure that large cliff edges in the tax system are the best way to encourage economic growth.
I am not defending cliff edges. I have fallen off too many of them personally. But it is still a question of priorities. And those earning over £100k are not it.
A contradiction there as one of the biggest cliff edges is for those earning modestly above £100k with young children.
I'm all for increasing the top rate of tax to 45% or 50% for all income above £100k and removing the withdrawal of the personal allowance / childcare.
At a first order approximation it would probably be broadly revenue neutral, but boost economic activity as the incentive to work more remains.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
If a higher earner, out of pique that we are not lobbing still more money down his/her gullet, fucks off to America ..; well then his/her job is occupied by another high earner.
With the exception of Erling Haaland, most people are actually very easily replaceable.
This idea that we have to go down on our knees & bribe & plead with high earners to work with massive bribes for their childcare, otherwise the entire country will become deprived of their taxes & sink into penury, is the most insane I have yet heard on pb.com.
That's nonsense. There isn't a finite amount of high income work which can be done by fungible high earners. Many, if not most high earners are responsible for deciding just how much they earn by how much work they do. The sorts of people who own their own business, for example. If you make it pointless for them to earn more, they won't do the work, and the GV will go un Added.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
That's completely beside the point: the tax and benefits system should not have cliffs where the marginal tax rate shoots up well above 100%.
We should be encouraging Casino to work, and to generate value and tax revenues.
The impact of this move is to discourage a large portion of the population from working.
Madness.
... a large portion ... guffaws.
How many people are affected? A very tiny portion of the UK earn over 100k per annum, and they only need childcare for a very small portion of their working life.
How many people are affected by cliff edges and tax and benefits rates shooting upto around 100%?
Many millions of people actually.
For starters anyone on UC paying IC and NI is already at 70% marginal tax rate even before anything else. These cliff edges exist throughout our NYC skyline tax code and it is damaging.
Of course, cliff edges are bad. The question is why pb.com is fixated on this cliff edge.
Because PB is full of middle class/high earners.
I think I'm the only working class PBer.
Jolly well done to you.
The 8th baronet always used to say to me that the poor are always with us, and we mustn't patronise them as they do what they can. That's always been a mantra I have lived by.
Of course, he was referring to the beaters on the Passmore grouse moors, but I'm sure it applies equally to PB.com.
As somebody once observed about me
'You're as working class as foie gras.'
Apparently marrying a working class woman doesn't make me working class.
You've done your bit by marrying one. I trust you remind her of that on a daily basis, and that she is grateful to a suitable extent.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
That's completely beside the point: the tax and benefits system should not have cliffs where the marginal tax rate shoots up well above 100%.
We should be encouraging Casino to work, and to generate value and tax revenues.
The impact of this move is to discourage a large portion of the population from working.
Madness.
... a large portion ... guffaws.
How many people are affected? A very tiny portion of the UK earn over 100k per annum, and they only need childcare for a very small portion of their working life.
How many people are affected by cliff edges and tax and benefits rates shooting upto around 100%?
Many millions of people actually.
For starters anyone on UC paying IC and NI is already at 70% marginal tax rate even before anything else. These cliff edges exist throughout our NYC skyline tax code and it is damaging.
Of course, cliff edges are bad. The question is why pb.com is fixated on this cliff edge.
Because PB is full of middle class/high earners.
I think I'm the only working class PBer.
Jolly well done to you.
The 8th baronet always used to say to me that the poor are always with us, and we mustn't patronise them as they do what they can. That's always been a mantra I have lived by.
Of course, he was referring to the beaters on the Passmore grouse moors, but I'm sure it applies equally to PB.com.
As somebody once observed about me
'You're as working class as foie gras.'
Apparently marrying a working class woman doesn't make me working class.
I suspect you are as working class as you are subtle
Rather off-topic, though a recurring subject. GPT developer walks through the improvements in today's GPT-4 release vs the 3/3.5 one https://www.youtube.com/watch?v=outcGtbnMuQ
I'm a OpenAI partner and have been using GPT-4, for a few days. It's better. But pretty subtly better. The leap in generations has gone from 100x with 1 to 2, 10x from 2 to 3, 2x from 3 to 3.5, and now it's 1.25x for 3.5 to 4.
I'll take it all the same. I'm in the process of moving a bunch of web UI stuff from bulma/bootstrap to tailwind and it was already saving me a bunch of time. If it even chops another 5% off the process then I'll be delighted.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
But it doesn't make any sense that someone earning £130k would be better off in practice, in terms of take home pay etc, reducing their salary to £100k, which is what this situation effectively is. It is total madness.
I've been based in London with work recently and think that these people, earning £100k, are not even vaguely rich in this context, where a terraced house costs £700k. If you are earning £5k per month (after pensions) a large chunk of money would go servicing a mortgage, it is not like school/nursery fees are just a trivial expense, you can't actually afford to pay them.
The system is creating bizarre incentives, ie to work less, or to move out of London and the south east; this has caused a lot of problems within the public sector.
Rather off-topic, though a recurring subject. GPT developer walks through the improvements in today's GPT-4 release vs the 3/3.5 one https://www.youtube.com/watch?v=outcGtbnMuQ
I'm a OpenAI partner and have been using GPT-4, for a few days. It's better. But pretty subtly better. The leap in generations has gone from 100x with 1 to 2, 10x from 2 to 3, 2x from 3 to 3.5, and now it's 1.25x for 3.5 to 4.
I'll take it all the same. I'm in the process of moving a bunch of web UI stuff from bulma/bootstrap to tailwind and it was already saving me a bunch of time. If it even chops another 5% off the process then I'll be delighted.
I use ChatGPT in exactly the same way. It is an incredible time saver.
"Disposal income per person will fall by 6% this financial year and next, according to the OBR, representing the largest two-year fall in living standards since records began in the 1950s.
That could lead to people dipping into their savings to pay for things."
22m have less than £1k of savings, half of which have less than £100 and they are going to be the ones hit hardest......
The largest two-year fall in living standars since the 1950s - true, but that takes us back to, what, 2014 standards? Which weren't exactly penury. And given that the last two years have seen us paying for lockdown and the impact of war in Ukraine, not unexpected - when has there been a confluence of events like this?
And what do the BBC expect to be done about this? One strongly suspects they expect the chancellor to conjure up money from nowhere. Which was what got us into this mess in the first place.
As an intellectual exercise, to what year would PB readers be willing to retreat, in terms of living standards, before it would be considered unacceptable? To the nearest decade for older readers….
It is completely perverse to accept any decline in living standards. It is absolutely being inflicted deliberately by an ideologically-crazed minority peddling climate alarmism, and we are badly in need of a counter-narrative.
The decline in living standards has not been inflicted by "an ideologically-crazed minority peddling climate alarmism". It has been inflicted by the Conservative government. It was Jeremy Hunt who delivered today's Budget, not Molly Scott Cato.
"Disposal income per person will fall by 6% this financial year and next, according to the OBR, representing the largest two-year fall in living standards since records began in the 1950s.
That could lead to people dipping into their savings to pay for things."
22m have less than £1k of savings, half of which have less than £100 and they are going to be the ones hit hardest......
The largest two-year fall in living standars since the 1950s - true, but that takes us back to, what, 2014 standards? Which weren't exactly penury. And given that the last two years have seen us paying for lockdown and the impact of war in Ukraine, not unexpected - when has there been a confluence of events like this?
And what do the BBC expect to be done about this? One strongly suspects they expect the chancellor to conjure up money from nowhere. Which was what got us into this mess in the first place.
As an intellectual exercise, to what year would PB readers be willing to retreat, in terms of living standards, before it would be considered unacceptable? To the nearest decade for older readers….
It is completely perverse to accept any decline in living standards. It is absolutely being inflicted deliberately by an ideologically-crazed minority peddling climate alarmism, and we are badly in need of a counter-narrative.
There are dozens of reasons for accepting declining living standards. We all have our hobbyhorses. I would, for example, accept a future where I was poorer - let's say one in which I need to work for another 12 months before retirement to retire on the same level of comfort - in return for a UK less trewn with graffiti and litter and with more trains. Others will have different priorities for what the state might do which might not equal 'living standards', or at least easily measurable ones.
If for example we suddenly had no smartphones or streaming tv would people be less happy. Probably not. Technology has made a small number of uber nerds rich but as time goes on its contribution to human happiness becomes less and less. Would i want to live without a refrigarator..hell no. Could i live without streaming tv. Of course.
That was, I'm sure, the argument of Communists in eastern Europe.
If people in the UK didn't have smartphones, and people in France did, I think people would notice.
Thats the point. In eastern europe they did have unreliable cars and lacked basic consumer goods. that hasnt been true in the west since at least the 60s or 70s. And im talking of a situation where no country has a smartphone not one does one doesnt. Do you think smartphones have been major beneficiaries for humanity because i could certainly live without them.
Every generation can look back at life 25 years ago and say "hey, life was pretty good back then because we had [y] and do we really need new fangled [x]".
So, people in the 1930s could have said "Life in the 1910s was pretty good; I mean we didn't have cars yet, with all that nasty pollution and the risk of getting knocked over. And who actually needs to go to the cinema anyway?"
And people in the 1950s could say "Life in the 1930s was pretty good. They already the cinema and cars, which is all you really need to lead a modern life. Do we really need jetplanes? And you used to be able to send your washing out for almost nothing. Is it really an improvement to have an unreliable and expensive machine and to do it yourself?"
Then people in the 1970s would say "Life in the 1950s was great. Already you innovations like washing machines and fridges than make home care simple. And the railway system was great - you could get anywhere in the UK cheaply. All there is today is colour TV and ridiculously expensive VCRs and the shows are exactly the same!"
Etcetera. Etcetera.
If we didn't advance technologically and France did. People would notice. And they would be spitting mad.
The difference is the tech elite actually shield their kids from tablets and smartphones. They know. The point is as im sure you will understand the marginal benefit of each wave of technological development is less and less and the associated costs more and more negative so that at some point the costs outweigh the benefits. We are arguably close to this point now which is why the dreams of silicon valley uber nerds will remain dreams,
Absurd assertions without evidence.
And as a member of the tech elite, I can assure you that I teach my kids how to use tech, I don't shield them from it.
ok an example. Social media like facebook and twitter. Have they contributed to the sum of human happiness in the same way as the invention of the automobile or refrigarator. I think not.
You honestly think that Facebook and Twitter are even in the top 10,000 innovations of this century?
ok well the smartphone then. I think that counts. Do you regard zombies walking down the street staring at their phones as a societal improvement.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
But it doesn't make any sense that someone earning £130k would be better off in practice, in terms of take home pay etc, reducing their salary to £100k, which is what this situation effectively is. It is total madness.
I've been based in London with work recently and think that these people, earning £100k, are not even vaguely rich in this context, where a terraced house costs £700k. If you are earning £5k per month (after pensions) a large chunk of money would go servicing a mortgage, it is not like school/nursery fees are just a trivial expense, you can't actually afford to pay them.
The system is creating bizarre incentives, ie to work less, or to move out of London and the south east; this has caused a lot of problems within the public sector.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
That's completely beside the point: the tax and benefits system should not have cliffs where the marginal tax rate shoots up well above 100%.
We should be encouraging Casino to work, and to generate value and tax revenues.
The impact of this move is to discourage a large portion of the population from working.
Madness.
... a large portion ... guffaws.
How many people are affected? A very tiny portion of the UK earn over 100k per annum, and they only need childcare for a very small portion of their working life.
How many people are affected by cliff edges and tax and benefits rates shooting upto around 100%?
Many millions of people actually.
For starters anyone on UC paying IC and NI is already at 70% marginal tax rate even before anything else. These cliff edges exist throughout our NYC skyline tax code and it is damaging.
Of course, cliff edges are bad. The question is why pb.com is fixated on this cliff edge.
Because PB is full of middle class/high earners.
I think I'm the only working class PBer.
Jolly well done to you.
The 8th baronet always used to say to me that the poor are always with us, and we mustn't patronise them as they do what they can. That's always been a mantra I have lived by.
Of course, he was referring to the beaters on the Passmore grouse moors, but I'm sure it applies equally to PB.com.
As somebody once observed about me
'You're as working class as foie gras.'
Apparently marrying a working class woman doesn't make me working class.
I suspect you are as working class as you are subtle
As subtle as a brick through a window according to my friends.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
The trouble is that old socialists, like @NickPalmer, agree with me.
The £100k cliff-edge is retarded and totally counterproductive. And it's not right that two earners in a household earning £95k each get all the help and none of the extra tax and a household with one earner on £105k and another on zero get nothing. Have a think about what that incentivises for a minute.
As @DougSeal said on the previous thread £100k today is equivalent to about £55k in 1999 prices. It's a yardstick now of a successful career built over many years of hard graft, not of "repulsive" wealth and your use of such language is disgusting.
The point is that there is lots of unfairness in our tax and benefit system.
Sure .. in an ideal world, there should not be and it should be fixed.
But, I doubt if anyone would pick on this as the most serious and glaring unfairness that needs urgent attention (except on pb.com).
If you follow my posts you'll see (earlier today in fact) that as part of a package for growth I have advocated (a) further streamlining the UC withdrawal taper (b) reducing tax on young people and student loans and (c) removing the £100k cliff edge.
I would pay for it upfront by trimming pensioner benefits. In the longer term I expect it would easily pay for itself.
It's all about aspiration, getting people into work and making work pay, which benefits all of us.
Good evening
Just heard a pensioner complain that the 10.1% increase in her pension will leave her worse off as she moves into the higher tax band
As a pensioner my response is tough
Well they are complete idiot's saying that because the increase in the state pension is about £1000, so they must have been on about £50k already to do that and even then the extra tax on the £1000 is £200 and it can never make her worse off. This isn't the £100k cliff edge.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
The trouble is that old socialists, like @NickPalmer, agree with me.
The £100k cliff-edge is retarded and totally counterproductive. And it's not right that two earners in a household earning £95k each get all the help and none of the extra tax and a household with one earner on £105k and another on zero get nothing. Have a think about what that incentivises for a minute.
As @DougSeal said on the previous thread £100k today is equivalent to about £55k in 1999 prices. It's a yardstick now of a successful career built over many years of hard graft, not of "repulsive" wealth and your use of such language is disgusting.
The point is that there is lots of unfairness in our tax and benefit system.
Sure .. in an ideal world, there should not be and it should be fixed.
But, I doubt if anyone would pick on this as the most serious and glaring unfairness that needs urgent attention (except on pb.com).
If you follow my posts you'll see (earlier today in fact) that as part of a package for growth I have advocated (a) further streamlining the UC withdrawal taper (b) reducing tax on young people and student loans and (c) removing the £100k cliff edge.
I would pay for it upfront by trimming pensioner benefits. In the longer term I expect it would easily pay for itself.
It's all about aspiration, getting people into work and making work pay, which benefits all of us.
Good evening
Just heard a pensioner complain that the 10.1% increase in her pension will leave her worse off as she moves into the higher tax band
As a pensioner my response is tough
Well they are complete idiot's saying that because the increase in the state pension is about £1000, so they must have been on about £50k already to do that and even then the extra tax on the £1000 is £200 and it can never make her worse off. This isn't the £100k cliff edge.
I'm not sure if giving me £1000 a year would make me worse off. But I'm more than happy to find out if somebody would like to do so.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
If a higher earner, out of pique that we are not lobbing still more money down his/her gullet, fucks off to America ..; well then his/her job is occupied by another high earner.
With the exception of Erling Haaland, most people are actually very easily replaceable.
This idea that we have to go down on our knees & bribe & plead with high earners to work with massive bribes for their childcare, otherwise the entire country will become deprived of their taxes & sink into penury, is the most insane I have yet heard on pb.com.
That's nonsense. There isn't a finite amount of high income work which can be done by fungible high earners. Many, if not most high earners are responsible for deciding just how much they earn by how much work they do. The sorts of people who own their own business, for example. If you make it pointless for them to earn more, they won't do the work, and the GV will go un Added.
If you own your own business, there are plenty of ways in which you can avoid this cliff edge.
"Disposal income per person will fall by 6% this financial year and next, according to the OBR, representing the largest two-year fall in living standards since records began in the 1950s.
That could lead to people dipping into their savings to pay for things."
22m have less than £1k of savings, half of which have less than £100 and they are going to be the ones hit hardest......
The largest two-year fall in living standars since the 1950s - true, but that takes us back to, what, 2014 standards? Which weren't exactly penury. And given that the last two years have seen us paying for lockdown and the impact of war in Ukraine, not unexpected - when has there been a confluence of events like this?
And what do the BBC expect to be done about this? One strongly suspects they expect the chancellor to conjure up money from nowhere. Which was what got us into this mess in the first place.
As an intellectual exercise, to what year would PB readers be willing to retreat, in terms of living standards, before it would be considered unacceptable? To the nearest decade for older readers….
It is completely perverse to accept any decline in living standards. It is absolutely being inflicted deliberately by an ideologically-crazed minority peddling climate alarmism, and we are badly in need of a counter-narrative.
There are dozens of reasons for accepting declining living standards. We all have our hobbyhorses. I would, for example, accept a future where I was poorer - let's say one in which I need to work for another 12 months before retirement to retire on the same level of comfort - in return for a UK less trewn with graffiti and litter and with more trains. Others will have different priorities for what the state might do which might not equal 'living standards', or at least easily measurable ones.
If for example we suddenly had no smartphones or streaming tv would people be less happy. Probably not. Technology has made a small number of uber nerds rich but as time goes on its contribution to human happiness becomes less and less. Would i want to live without a refrigarator..hell no. Could i live without streaming tv. Of course.
That was, I'm sure, the argument of Communists in eastern Europe.
If people in the UK didn't have smartphones, and people in France did, I think people would notice.
Thats the point. In eastern europe they did have unreliable cars and lacked basic consumer goods. that hasnt been true in the west since at least the 60s or 70s. And im talking of a situation where no country has a smartphone not one does one doesnt. Do you think smartphones have been major beneficiaries for humanity because i could certainly live without them.
Every generation can look back at life 25 years ago and say "hey, life was pretty good back then because we had [y] and do we really need new fangled [x]".
So, people in the 1930s could have said "Life in the 1910s was pretty good; I mean we didn't have cars yet, with all that nasty pollution and the risk of getting knocked over. And who actually needs to go to the cinema anyway?"
And people in the 1950s could say "Life in the 1930s was pretty good. They already the cinema and cars, which is all you really need to lead a modern life. Do we really need jetplanes? And you used to be able to send your washing out for almost nothing. Is it really an improvement to have an unreliable and expensive machine and to do it yourself?"
Then people in the 1970s would say "Life in the 1950s was great. Already you innovations like washing machines and fridges than make home care simple. And the railway system was great - you could get anywhere in the UK cheaply. All there is today is colour TV and ridiculously expensive VCRs and the shows are exactly the same!"
Etcetera. Etcetera.
If we didn't advance technologically and France did. People would notice. And they would be spitting mad.
The difference is the tech elite actually shield their kids from tablets and smartphones. They know. The point is as im sure you will understand the marginal benefit of each wave of technological development is less and less and the associated costs more and more negative so that at some point the costs outweigh the benefits. We are arguably close to this point now which is why the dreams of silicon valley uber nerds will remain dreams,
Absurd assertions without evidence.
And as a member of the tech elite, I can assure you that I teach my kids how to use tech, I don't shield them from it.
ok an example. Social media like facebook and twitter. Have they contributed to the sum of human happiness in the same way as the invention of the automobile or refrigarator. I think not.
You honestly think that Facebook and Twitter are even in the top 10,000 innovations of this century?
ok well the smartphone then. I think that counts. Do you regard zombies walking down the street staring at their phones as a societal improvement.
How about you ask the sensible question: what inventions in the last twenty years have the potential to change the world to the same degree as the refrigerator?
And I can come up with three, if you like:
(1) Modern solar panels, which will revolutionize the cost of energy over the next hundred years.
(2) Battery technology, which harnesses that abundant energy and allows it to be used in places and in ways that were simply inconceivable.
(And these two mean that people in tiny villages in Africa can look forward to having a refrigerator in the near future.)
(3) Artificial intelligence and Machine Learning: ChatGPT is just the merest glimpse of what we're going to get.
Nearer thirty years than twenty, but I'd suggest white LEDs. In the West, powering a string of fairy lights off a small solar panel and an AA rechargable battery is a pleasantry in the garden. In other parts of the world, it's an utter game changer for light, reading, education and all that follows from it.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
That's completely beside the point: the tax and benefits system should not have cliffs where the marginal tax rate shoots up well above 100%.
We should be encouraging Casino to work, and to generate value and tax revenues.
The impact of this move is to discourage a large portion of the population from working.
Madness.
... a large portion ... guffaws.
How many people are affected? A very tiny portion of the UK earn over 100k per annum, and they only need childcare for a very small portion of their working life.
How many people are affected by cliff edges and tax and benefits rates shooting upto around 100%?
Many millions of people actually.
For starters anyone on UC paying IC and NI is already at 70% marginal tax rate even before anything else. These cliff edges exist throughout our NYC skyline tax code and it is damaging.
Of course, cliff edges are bad. The question is why pb.com is fixated on this cliff edge.
Because PB is full of middle class/high earners.
I think I'm the only working class PBer.
Jolly well done to you.
The 8th baronet always used to say to me that the poor are always with us, and we mustn't patronise them as they do what they can. That's always been a mantra I have lived by.
Of course, he was referring to the beaters on the Passmore grouse moors, but I'm sure it applies equally to PB.com.
As somebody once observed about me
'You're as working class as foie gras.'
Apparently marrying a working class woman doesn't make me working class.
You've done your bit by marrying one. I trust you remind her of that on a daily basis, and that she is grateful to a suitable extent.
Sadly not, we divorced in 2015.
Sorry to hear that.
As the 8th baronet also used to remark, you can't tame a wild pony.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
The trouble is that old socialists, like @NickPalmer, agree with me.
The £100k cliff-edge is retarded and totally counterproductive. And it's not right that two earners in a household earning £95k each get all the help and none of the extra tax and a household with one earner on £105k and another on zero get nothing. Have a think about what that incentivises for a minute.
As @DougSeal said on the previous thread £100k today is equivalent to about £55k in 1999 prices. It's a yardstick now of a successful career built over many years of hard graft, not of "repulsive" wealth and your use of such language is disgusting.
The point is that there is lots of unfairness in our tax and benefit system.
Sure .. in an ideal world, there should not be and it should be fixed.
But, I doubt if anyone would pick on this as the most serious and glaring unfairness that needs urgent attention (except on pb.com).
If you follow my posts you'll see (earlier today in fact) that as part of a package for growth I have advocated (a) further streamlining the UC withdrawal taper (b) reducing tax on young people and student loans and (c) removing the £100k cliff edge.
I would pay for it upfront by trimming pensioner benefits. In the longer term I expect it would easily pay for itself.
It's all about aspiration, getting people into work and making work pay, which benefits all of us.
Good evening
Just heard a pensioner complain that the 10.1% increase in her pension will leave her worse off as she moves into the higher tax band
As a pensioner my response is tough
Well they are complete idiot's saying that because the increase in the state pension is about £1000, so they must have been on about £50k already to do that and even then the extra tax on the £1000 is £200 and it can never make her worse off. This isn't the £100k cliff edge.
I'm not sure if giving me £1000 a year would make me worse off. But I'm more than happy to find out if somebody would like to do so.
Given you have kindly volunteered to test the extra £1k example, I think it only fair that I offer to do the same for an extra £10k so that pb.com have a more complete data set to work from.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
The trouble is that old socialists, like @NickPalmer, agree with me.
The £100k cliff-edge is retarded and totally counterproductive. And it's not right that two earners in a household earning £95k each get all the help and none of the extra tax and a household with one earner on £105k and another on zero get nothing. Have a think about what that incentivises for a minute.
As @DougSeal said on the previous thread £100k today is equivalent to about £55k in 1999 prices. It's a yardstick now of a successful career built over many years of hard graft, not of "repulsive" wealth and your use of such language is disgusting.
The point is that there is lots of unfairness in our tax and benefit system.
Sure .. in an ideal world, there should not be and it should be fixed.
But, I doubt if anyone would pick on this as the most serious and glaring unfairness that needs urgent attention (except on pb.com).
If you follow my posts you'll see (earlier today in fact) that as part of a package for growth I have advocated (a) further streamlining the UC withdrawal taper (b) reducing tax on young people and student loans and (c) removing the £100k cliff edge.
I would pay for it upfront by trimming pensioner benefits. In the longer term I expect it would easily pay for itself.
It's all about aspiration, getting people into work and making work pay, which benefits all of us.
Good evening
Just heard a pensioner complain that the 10.1% increase in her pension will leave her worse off as she moves into the higher tax band
As a pensioner my response is tough
Well they are complete idiot's saying that because the increase in the state pension is about £1000, so they must have been on about £50k already to do that and even then the extra tax on the £1000 is £200 and it can never make her worse off. This isn't the £100k cliff edge.
I'm not sure if giving me £1000 a year would make me worse off. But I'm more than happy to find out if somebody would like to do so.
Given you have kindly volunteered to test the extra £1k example, I think it only fair that I offer to do the same for an extra £10k so that pb.com have a more complete data set to work from.
I am willing to bear the unfairness of an extra £100k if anyone is offering.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
But it doesn't make any sense that someone earning £130k would be better off in practice, in terms of take home pay etc, reducing their salary to £100k, which is what this situation effectively is. It is total madness.
I've been based in London with work recently and think that these people, earning £100k, are not even vaguely rich in this context, where a terraced house costs £700k. If you are earning £5k per month (after pensions) a large chunk of money would go servicing a mortgage, it is not like school/nursery fees are just a trivial expense, you can't actually afford to pay them.
The system is creating bizarre incentives, ie to work less, or to move out of London and the south east; this has caused a lot of problems within the public sector.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
But it doesn't make any sense that someone earning £130k would be better off in practice, in terms of take home pay etc, reducing their salary to £100k, which is what this situation effectively is. It is total madness.
I've been based in London with work recently and think that these people, earning £100k, are not even vaguely rich in this context, where a terraced house costs £700k. If you are earning £5k per month (after pensions) a large chunk of money would go servicing a mortgage, it is not like school/nursery fees are just a trivial expense, you can't actually afford to pay them.
The system is creating bizarre incentives, ie to work less, or to move out of London and the south east; this has caused a lot of problems within the public sector.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
The trouble is that old socialists, like @NickPalmer, agree with me.
The £100k cliff-edge is retarded and totally counterproductive. And it's not right that two earners in a household earning £95k each get all the help and none of the extra tax and a household with one earner on £105k and another on zero get nothing. Have a think about what that incentivises for a minute.
As @DougSeal said on the previous thread £100k today is equivalent to about £55k in 1999 prices. It's a yardstick now of a successful career built over many years of hard graft, not of "repulsive" wealth and your use of such language is disgusting.
The point is that there is lots of unfairness in our tax and benefit system.
Sure .. in an ideal world, there should not be and it should be fixed.
But, I doubt if anyone would pick on this as the most serious and glaring unfairness that needs urgent attention (except on pb.com).
If you follow my posts you'll see (earlier today in fact) that as part of a package for growth I have advocated (a) further streamlining the UC withdrawal taper (b) reducing tax on young people and student loans and (c) removing the £100k cliff edge.
I would pay for it upfront by trimming pensioner benefits. In the longer term I expect it would easily pay for itself.
It's all about aspiration, getting people into work and making work pay, which benefits all of us.
Good evening
Just heard a pensioner complain that the 10.1% increase in her pension will leave her worse off as she moves into the higher tax band
As a pensioner my response is tough
Well they are complete idiot's saying that because the increase in the state pension is about £1000, so they must have been on about £50k already to do that and even then the extra tax on the £1000 is £200 and it can never make her worse off. This isn't the £100k cliff edge.
I'm not sure if giving me £1000 a year would make me worse off. But I'm more than happy to find out if somebody would like to do so.
I don't think too much energy will be expended on worrying about the childcare needs of those earning over £100k.
On another note, I was speaking to a pig farmer (strictly, pig breeder) today and he said that at the recent NFU conference SKS spoke a lot more common sense than the Cons DEFRA minister and received a far warmer reception.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
The trouble is that old socialists, like @NickPalmer, agree with me.
The £100k cliff-edge is retarded and totally counterproductive. And it's not right that two earners in a household earning £95k each get all the help and none of the extra tax and a household with one earner on £105k and another on zero get nothing. Have a think about what that incentivises for a minute.
As @DougSeal said on the previous thread £100k today is equivalent to about £55k in 1999 prices. It's a yardstick now of a successful career built over many years of hard graft, not of "repulsive" wealth and your use of such language is disgusting.
The point is that there is lots of unfairness in our tax and benefit system.
Sure .. in an ideal world, there should not be and it should be fixed.
But, I doubt if anyone would pick on this as the most serious and glaring unfairness that needs urgent attention (except on pb.com).
If you follow my posts you'll see (earlier today in fact) that as part of a package for growth I have advocated (a) further streamlining the UC withdrawal taper (b) reducing tax on young people and student loans and (c) removing the £100k cliff edge.
I would pay for it upfront by trimming pensioner benefits. In the longer term I expect it would easily pay for itself.
It's all about aspiration, getting people into work and making work pay, which benefits all of us.
Good evening
Just heard a pensioner complain that the 10.1% increase in her pension will leave her worse off as she moves into the higher tax band
As a pensioner my response is tough
Well they are complete idiot's saying that because the increase in the state pension is about £1000, so they must have been on about £50k already to do that and even then the extra tax on the £1000 is £200 and it can never make her worse off. This isn't the £100k cliff edge.
It's a common mistake. However I suspect there will be quite a few pensioners who'll be disappointed when they realise they don't get the full benefit of the 10% increase because the personal allowance isn't rising and they find themselves paying more tax.
Personally I like the increasing of the NI threshold and freezing of the income tax one as oldies should be paying more.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
Smoking related diseases/cessation services cost the NHS £2.6bn/year.
Following todays budget, the treasury rakes in over £10bn/year in tobacco tax.
Whether you take the left wing position that smokers are victims of the tobacco industry and the government should ban the sale of tobacco products and/or have an obligation to use all the tax duties to provide effective cessation services - or the conservative/libertarian position that stresses free agency and that the government shouldn’t tax above the cost of providing health services to smokers (preferably no tax at all - and health would be privatised) - surely we can all agree that government using smokers - who cluster around the lowest socioeconomic groups - as a cash cow - is utterly immoral?
Paying, on average, £1666 in tax, per smoker, per year - and getting £433 per person, per year back in nhs/cessation services? Smokers are getting a shit deal.
The tories moral compass needs recalibrating.
(apologies for the possibly the longest sentence ever written, btw)
I don't think too much energy will be expended on worrying about the childcare needs of those earning over £100k.
On another note, I was speaking to a pig farmer (strictly, pig breeder) today and he said that at the recent NFU conference SKS spoke a lot more common sense than the Cons DEFRA minister and received a far warmer reception.
In fairness, I suspect that says more about the Con Minister than Sir Keir.
"Disposal income per person will fall by 6% this financial year and next, according to the OBR, representing the largest two-year fall in living standards since records began in the 1950s.
That could lead to people dipping into their savings to pay for things."
22m have less than £1k of savings, half of which have less than £100 and they are going to be the ones hit hardest......
The largest two-year fall in living standars since the 1950s - true, but that takes us back to, what, 2014 standards? Which weren't exactly penury. And given that the last two years have seen us paying for lockdown and the impact of war in Ukraine, not unexpected - when has there been a confluence of events like this?
And what do the BBC expect to be done about this? One strongly suspects they expect the chancellor to conjure up money from nowhere. Which was what got us into this mess in the first place.
As an intellectual exercise, to what year would PB readers be willing to retreat, in terms of living standards, before it would be considered unacceptable? To the nearest decade for older readers….
It is completely perverse to accept any decline in living standards. It is absolutely being inflicted deliberately by an ideologically-crazed minority peddling climate alarmism, and we are badly in need of a counter-narrative.
There are dozens of reasons for accepting declining living standards. We all have our hobbyhorses. I would, for example, accept a future where I was poorer - let's say one in which I need to work for another 12 months before retirement to retire on the same level of comfort - in return for a UK less trewn with graffiti and litter and with more trains. Others will have different priorities for what the state might do which might not equal 'living standards', or at least easily measurable ones.
If for example we suddenly had no smartphones or streaming tv would people be less happy. Probably not. Technology has made a small number of uber nerds rich but as time goes on its contribution to human happiness becomes less and less. Would i want to live without a refrigarator..hell no. Could i live without streaming tv. Of course.
That was, I'm sure, the argument of Communists in eastern Europe.
If people in the UK didn't have smartphones, and people in France did, I think people would notice.
Thats the point. In eastern europe they did have unreliable cars and lacked basic consumer goods. that hasnt been true in the west since at least the 60s or 70s. And im talking of a situation where no country has a smartphone not one does one doesnt. Do you think smartphones have been major beneficiaries for humanity because i could certainly live without them.
Every generation can look back at life 25 years ago and say "hey, life was pretty good back then because we had [y] and do we really need new fangled [x]".
So, people in the 1930s could have said "Life in the 1910s was pretty good; I mean we didn't have cars yet, with all that nasty pollution and the risk of getting knocked over. And who actually needs to go to the cinema anyway?"
And people in the 1950s could say "Life in the 1930s was pretty good. They already the cinema and cars, which is all you really need to lead a modern life. Do we really need jetplanes? And you used to be able to send your washing out for almost nothing. Is it really an improvement to have an unreliable and expensive machine and to do it yourself?"
Then people in the 1970s would say "Life in the 1950s was great. Already you innovations like washing machines and fridges than make home care simple. And the railway system was great - you could get anywhere in the UK cheaply. All there is today is colour TV and ridiculously expensive VCRs and the shows are exactly the same!"
Etcetera. Etcetera.
If we didn't advance technologically and France did. People would notice. And they would be spitting mad.
The difference is the tech elite actually shield their kids from tablets and smartphones. They know. The point is as im sure you will understand the marginal benefit of each wave of technological development is less and less and the associated costs more and more negative so that at some point the costs outweigh the benefits. We are arguably close to this point now which is why the dreams of silicon valley uber nerds will remain dreams,
Absurd assertions without evidence.
And as a member of the tech elite, I can assure you that I teach my kids how to use tech, I don't shield them from it.
ok an example. Social media like facebook and twitter. Have they contributed to the sum of human happiness in the same way as the invention of the automobile or refrigarator. I think not.
You honestly think that Facebook and Twitter are even in the top 10,000 innovations of this century?
ok well the smartphone then. I think that counts. Do you regard zombies walking down the street staring at their phones as a societal improvement.
How about you ask the sensible question: what inventions in the last twenty years have the potential to change the world to the same degree as the refrigerator?
And I can come up with three, if you like:
(1) Modern solar panels, which will revolutionize the cost of energy over the next hundred years.
(2) Battery technology, which harnesses that abundant energy and allows it to be used in places and in ways that were simply inconceivable.
(And these two mean that people in tiny villages in Africa can look forward to having a refrigerator in the near future.)
(3) Artificial intelligence and Machine Learning: ChatGPT is just the merest glimpse of what we're going to get.
Nearer thirty years than twenty, but I'd suggest white LEDs. In the West, powering a string of fairy lights off a small solar panel and an AA rechargable battery is a pleasantry in the garden. In other parts of the world, it's an utter game changer for light, reading, education and all that follows from it.
The other thing is: we're only able to really appreciate the most important inventions with hindsight.
In 1974, when asked about the most important invention, most people would have said "Spaceships!"
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
"...spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter..."
Sorry what's the downside? If the work genuinely needs doing someone else will get the opportunity. Quality of life is more than money.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
I dropped hours to avoid 40% tax, never mind any other thresholds. There's definitely a disincentive in artificial cliff edges.
What I thought was a bit remiss was that the Chancellor talked about 50 year olds being out of the employment market but then addressed the issue of child care. I would have thought there were many many more 50 year olds dealing with elderly relatives than with toddlers.
I may be projecting, but biology would suggest this it the case.
To be fair, it is a much harder problem to crack. And it is probably saving the chancellor money in a lot of cases.
Smoking related diseases/cessation services cost the NHS £2.6bn/year.
Following todays budget, the treasury rakes in over £10bn/year in tobacco tax.
Whether you take the left wing position that smokers are victims of the tobacco industry and the government should ban the sale of tobacco products and/or have an obligation to use all the tax duties to provide effective cessation services - or the conservative/libertarian position that stresses free agency and that the government shouldn’t tax above the cost of providing health services to smokers (preferably no tax at all - and health would be privatised) - surely we can all agree that government using smokers - who cluster around the lowest socioeconomic groups - as a cash cow - is utterly immoral?
Paying, on average, £1666 in tax, per smoker, per year - and getting £433 per person, per year back in nhs/cessation services? Smokers are getting a shit deal.
The tories moral compass needs recalibrating.
(apologies for the possibly the longest sentence ever written, btw)
If they are that pissed off at getting a shit deal, they can stop - and make no tax contribution.
Smoking related diseases/cessation services cost the NHS £2.6bn/year.
Following todays budget, the treasury rakes in over £10bn/year in tobacco tax.
Whether you take the left wing position that smokers are victims of the tobacco industry and the government should ban the sale of tobacco products and/or have an obligation to use all the tax duties to provide effective cessation services - or the conservative/libertarian position that stresses free agency and that the government shouldn’t tax above the cost of providing health services to smokers (preferably no tax at all - and health would be privatised) - surely we can all agree that government using smokers - who cluster around the lowest socioeconomic groups - as a cash cow - is utterly immoral?
Paying, on average, £1666 in tax, per smoker, per year - and getting £433 per person, per year back in nhs/cessation services? Smokers are getting a shit deal.
The tories moral compass needs recalibrating.
(apologies for the possibly the longest sentence ever written, btw)
If they are that pissed off at getting a shit deal, they can stop - and make no tax contribution.
See also drinking, driving, flying… pretty much everything you buy except food.
Smoking related diseases/cessation services cost the NHS £2.6bn/year.
Following todays budget, the treasury rakes in over £10bn/year in tobacco tax.
Whether you take the left wing position that smokers are victims of the tobacco industry and the government should ban the sale of tobacco products and/or have an obligation to use all the tax duties to provide effective cessation services - or the conservative/libertarian position that stresses free agency and that the government shouldn’t tax above the cost of providing health services to smokers (preferably no tax at all - and health would be privatised) - surely we can all agree that government using smokers - who cluster around the lowest socioeconomic groups - as a cash cow - is utterly immoral?
Paying, on average, £1666 in tax, per smoker, per year - and getting £433 per person, per year back in nhs/cessation services? Smokers are getting a shit deal.
The tories moral compass needs recalibrating.
(apologies for the possibly the longest sentence ever written, btw)
If they are that pissed off at getting a shit deal, they can stop - and make no tax contribution.
That's what they used to say about windows and wig powder.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
I agree that these marginal rates can be a bad thing. However, can I, in the spirit of Socrates, question your scenario above?
This person who chooses to work a 4-day week, let's call them Angus... OK, so they're doing a day's less work per week. Someone else, Bob, was willing to pay for this work. Bob presumably still wants that work done. Bob will presumably turn to someone else, Carla. Carla presumably doesn't earn as much as Angus and wants the work.
So, what's the end result? Angus is working less, but maybe enjoying life more. Income has been re-distributed, with Angus not earning as much, but Carla earning more. Bob has got the work he wanted done. Is this a terrible outcome for the country?
Smoking related diseases/cessation services cost the NHS £2.6bn/year.
Following todays budget, the treasury rakes in over £10bn/year in tobacco tax.
Whether you take the left wing position that smokers are victims of the tobacco industry and the government should ban the sale of tobacco products and/or have an obligation to use all the tax duties to provide effective cessation services - or the conservative/libertarian position that stresses free agency and that the government shouldn’t tax above the cost of providing health services to smokers (preferably no tax at all - and health would be privatised) - surely we can all agree that government using smokers - who cluster around the lowest socioeconomic groups - as a cash cow - is utterly immoral?
Paying, on average, £1666 in tax, per smoker, per year - and getting £433 per person, per year back in nhs/cessation services? Smokers are getting a shit deal.
The tories moral compass needs recalibrating.
(apologies for the possibly the longest sentence ever written, btw)
No, legal but very highly taxed and alarming photos on the packets feels a good policy balance for me. Sorry smokers!
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
"...spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter..."
Sorry what's the downside? If the work genuinely needs doing someone else will get the opportunity. Quality of life is more than money.
It sounds a win-win to me.
Better work-life balance for the 100k-er.
And someone else has the opportunity to do the work and earn a bit of the good stuff.
"Disposal income per person will fall by 6% this financial year and next, according to the OBR, representing the largest two-year fall in living standards since records began in the 1950s.
That could lead to people dipping into their savings to pay for things."
22m have less than £1k of savings, half of which have less than £100 and they are going to be the ones hit hardest......
The largest two-year fall in living standars since the 1950s - true, but that takes us back to, what, 2014 standards? Which weren't exactly penury. And given that the last two years have seen us paying for lockdown and the impact of war in Ukraine, not unexpected - when has there been a confluence of events like this?
And what do the BBC expect to be done about this? One strongly suspects they expect the chancellor to conjure up money from nowhere. Which was what got us into this mess in the first place.
As an intellectual exercise, to what year would PB readers be willing to retreat, in terms of living standards, before it would be considered unacceptable? To the nearest decade for older readers….
It is completely perverse to accept any decline in living standards. It is absolutely being inflicted deliberately by an ideologically-crazed minority peddling climate alarmism, and we are badly in need of a counter-narrative.
There are dozens of reasons for accepting declining living standards. We all have our hobbyhorses. I would, for example, accept a future where I was poorer - let's say one in which I need to work for another 12 months before retirement to retire on the same level of comfort - in return for a UK less trewn with graffiti and litter and with more trains. Others will have different priorities for what the state might do which might not equal 'living standards', or at least easily measurable ones.
If for example we suddenly had no smartphones or streaming tv would people be less happy. Probably not. Technology has made a small number of uber nerds rich but as time goes on its contribution to human happiness becomes less and less. Would i want to live without a refrigarator..hell no. Could i live without streaming tv. Of course.
That was, I'm sure, the argument of Communists in eastern Europe.
If people in the UK didn't have smartphones, and people in France did, I think people would notice.
Thats the point. In eastern europe they did have unreliable cars and lacked basic consumer goods. that hasnt been true in the west since at least the 60s or 70s. And im talking of a situation where no country has a smartphone not one does one doesnt. Do you think smartphones have been major beneficiaries for humanity because i could certainly live without them.
Every generation can look back at life 25 years ago and say "hey, life was pretty good back then because we had [y] and do we really need new fangled [x]".
So, people in the 1930s could have said "Life in the 1910s was pretty good; I mean we didn't have cars yet, with all that nasty pollution and the risk of getting knocked over. And who actually needs to go to the cinema anyway?"
And people in the 1950s could say "Life in the 1930s was pretty good. They already the cinema and cars, which is all you really need to lead a modern life. Do we really need jetplanes? And you used to be able to send your washing out for almost nothing. Is it really an improvement to have an unreliable and expensive machine and to do it yourself?"
Then people in the 1970s would say "Life in the 1950s was great. Already you innovations like washing machines and fridges than make home care simple. And the railway system was great - you could get anywhere in the UK cheaply. All there is today is colour TV and ridiculously expensive VCRs and the shows are exactly the same!"
Etcetera. Etcetera.
If we didn't advance technologically and France did. People would notice. And they would be spitting mad.
The difference is the tech elite actually shield their kids from tablets and smartphones. They know. The point is as im sure you will understand the marginal benefit of each wave of technological development is less and less and the associated costs more and more negative so that at some point the costs outweigh the benefits. We are arguably close to this point now which is why the dreams of silicon valley uber nerds will remain dreams,
Absurd assertions without evidence.
And as a member of the tech elite, I can assure you that I teach my kids how to use tech, I don't shield them from it.
ok an example. Social media like facebook and twitter. Have they contributed to the sum of human happiness in the same way as the invention of the automobile or refrigarator. I think not.
You honestly think that Facebook and Twitter are even in the top 10,000 innovations of this century?
Here's a question: has that modern (Communist and post-Communist) China had made no significant technological advancements/innovations that have significantly changed the world? Computers, the Internet, GNSS/GPS, many medical advances and drugs, all came from the west.
China have been very good at copying/productionising, but what major things have they invented? Widening it out, what major scientific breakthroughs have they made?
I'm not saying there are not any; I just can't immediately think of any.
An interesting and provocative point.
There's probably some - but, as you say, hard to think of any.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
"...spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter..."
Sorry what's the downside? If the work genuinely needs doing someone else will get the opportunity. Quality of life is more than money.
Well absolutely, which is why so many people go for the 4 day week.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
But it doesn't make any sense that someone earning £130k would be better off in practice, in terms of take home pay etc, reducing their salary to £100k, which is what this situation effectively is. It is total madness.
I've been based in London with work recently and think that these people, earning £100k, are not even vaguely rich in this context, where a terraced house costs £700k. If you are earning £5k per month (after pensions) a large chunk of money would go servicing a mortgage, it is not like school/nursery fees are just a trivial expense, you can't actually afford to pay them.
The system is creating bizarre incentives, ie to work less, or to move out of London and the south east; this has caused a lot of problems within the public sector.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
So some well-off people do less work, but if there is still work to be done maybe some people who are freed up by affordable childcare can now pursue that work? It's certain more complex than just considering the downside for the few, the upside for the many will likely be much larger.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
I agree that these marginal rates can be a bad thing. However, can I, in the spirit of Socrates, question your scenario above?
This person who chooses to work a 4-day week, let's call them Angus... OK, so they're doing a day's less work per week. Someone else, Bob, was willing to pay for this work. Bob presumably still wants that work done. Bob will presumably turn to someone else, Carla. Carla presumably doesn't earn as much as Angus and wants the work.
So, what's the end result? Angus is working less, but maybe enjoying life more. Income has been re-distributed, with Angus not earning as much, but Carla earning more. Bob has got the work he wanted done. Is this a terrible outcome for the country?
Carla might be in Hungary, of course.
It is a bit of a dilemma. I've been 4 days for quite a long time and I would wholly recommend it but I don't think it is economically neutral for the UK.
It would work if we could increase productivity at the same time.
"Disposal income per person will fall by 6% this financial year and next, according to the OBR, representing the largest two-year fall in living standards since records began in the 1950s.
That could lead to people dipping into their savings to pay for things."
22m have less than £1k of savings, half of which have less than £100 and they are going to be the ones hit hardest......
The largest two-year fall in living standars since the 1950s - true, but that takes us back to, what, 2014 standards? Which weren't exactly penury. And given that the last two years have seen us paying for lockdown and the impact of war in Ukraine, not unexpected - when has there been a confluence of events like this?
And what do the BBC expect to be done about this? One strongly suspects they expect the chancellor to conjure up money from nowhere. Which was what got us into this mess in the first place.
As an intellectual exercise, to what year would PB readers be willing to retreat, in terms of living standards, before it would be considered unacceptable? To the nearest decade for older readers….
It is completely perverse to accept any decline in living standards. It is absolutely being inflicted deliberately by an ideologically-crazed minority peddling climate alarmism, and we are badly in need of a counter-narrative.
There are dozens of reasons for accepting declining living standards. We all have our hobbyhorses. I would, for example, accept a future where I was poorer - let's say one in which I need to work for another 12 months before retirement to retire on the same level of comfort - in return for a UK less trewn with graffiti and litter and with more trains. Others will have different priorities for what the state might do which might not equal 'living standards', or at least easily measurable ones.
If for example we suddenly had no smartphones or streaming tv would people be less happy. Probably not. Technology has made a small number of uber nerds rich but as time goes on its contribution to human happiness becomes less and less. Would i want to live without a refrigarator..hell no. Could i live without streaming tv. Of course.
That was, I'm sure, the argument of Communists in eastern Europe.
If people in the UK didn't have smartphones, and people in France did, I think people would notice.
Thats the point. In eastern europe they did have unreliable cars and lacked basic consumer goods. that hasnt been true in the west since at least the 60s or 70s. And im talking of a situation where no country has a smartphone not one does one doesnt. Do you think smartphones have been major beneficiaries for humanity because i could certainly live without them.
Every generation can look back at life 25 years ago and say "hey, life was pretty good back then because we had [y] and do we really need new fangled [x]".
So, people in the 1930s could have said "Life in the 1910s was pretty good; I mean we didn't have cars yet, with all that nasty pollution and the risk of getting knocked over. And who actually needs to go to the cinema anyway?"
And people in the 1950s could say "Life in the 1930s was pretty good. They already the cinema and cars, which is all you really need to lead a modern life. Do we really need jetplanes? And you used to be able to send your washing out for almost nothing. Is it really an improvement to have an unreliable and expensive machine and to do it yourself?"
Then people in the 1970s would say "Life in the 1950s was great. Already you innovations like washing machines and fridges than make home care simple. And the railway system was great - you could get anywhere in the UK cheaply. All there is today is colour TV and ridiculously expensive VCRs and the shows are exactly the same!"
Etcetera. Etcetera.
If we didn't advance technologically and France did. People would notice. And they would be spitting mad.
The difference is the tech elite actually shield their kids from tablets and smartphones. They know. The point is as im sure you will understand the marginal benefit of each wave of technological development is less and less and the associated costs more and more negative so that at some point the costs outweigh the benefits. We are arguably close to this point now which is why the dreams of silicon valley uber nerds will remain dreams,
Absurd assertions without evidence.
And as a member of the tech elite, I can assure you that I teach my kids how to use tech, I don't shield them from it.
ok an example. Social media like facebook and twitter. Have they contributed to the sum of human happiness in the same way as the invention of the automobile or refrigarator. I think not.
You honestly think that Facebook and Twitter are even in the top 10,000 innovations of this century?
Here's a question: has that modern (Communist and post-Communist) China had made no significant technological advancements/innovations that have significantly changed the world? Computers, the Internet, GNSS/GPS, many medical advances and drugs, all came from the west.
China have been very good at copying/productionising, but what major things have they invented? Widening it out, what major scientific breakthroughs have they made?
I'm not saying there are not any; I just can't immediately think of any.
An interesting and provocative point.
There's probably some - but, as you say, hard to think of any.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
The Tories have one more budget to go before the election.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
I agree that these marginal rates can be a bad thing. However, can I, in the spirit of Socrates, question your scenario above?
This person who chooses to work a 4-day week, let's call them Angus... OK, so they're doing a day's less work per week. Someone else, Bob, was willing to pay for this work. Bob presumably still wants that work done. Bob will presumably turn to someone else, Carla. Carla presumably doesn't earn as much as Angus and wants the work.
So, what's the end result? Angus is working less, but maybe enjoying life more. Income has been re-distributed, with Angus not earning as much, but Carla earning more. Bob has got the work he wanted done. Is this a terrible outcome for the country?
Because Carla probably has the capability to do the same job as Angus at another company full time, so where we have Angus doing 80% of a job and Carla doing 20% we should have Angus doing 100% and Carla doing 100% somewhere else. Even if Carla picks up a Monday somewhere and a Friday elsewhere it's still pretty big loss of output from two people who are highly skilled.
This one is serious, CS is potentially too wide ranging an outfit not to have knock on effects if it goes south. Apparently the pressure on the Swiss from external forces, presumably the US, to act is seriously heavy right now.
The only luck is that CS have been a well trailed, slow moving problem case so you'd hope for others having done their containment planning some time ago.
Smoking related diseases/cessation services cost the NHS £2.6bn/year.
Following todays budget, the treasury rakes in over £10bn/year in tobacco tax.
Whether you take the left wing position that smokers are victims of the tobacco industry and the government should ban the sale of tobacco products and/or have an obligation to use all the tax duties to provide effective cessation services - or the conservative/libertarian position that stresses free agency and that the government shouldn’t tax above the cost of providing health services to smokers (preferably no tax at all - and health would be privatised) - surely we can all agree that government using smokers - who cluster around the lowest socioeconomic groups - as a cash cow - is utterly immoral?
Paying, on average, £1666 in tax, per smoker, per year - and getting £433 per person, per year back in nhs/cessation services? Smokers are getting a shit deal.
The tories moral compass needs recalibrating.
(apologies for the possibly the longest sentence ever written, btw)
No, legal but very highly taxed and alarming photos on the packets feels a good policy balance for me. Sorry smokers!
Why should the missing £7.4bn go into the general treasury pot instead of being spent on nhs/cessation services?
These are some of the very poorest and most vulnerable members of our society. Hunt has chosen to tax them to the eyeballs to subsidise tax cuts for - already very wealthy - senior doctors.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
I agree that these marginal rates can be a bad thing. However, can I, in the spirit of Socrates, question your scenario above?
This person who chooses to work a 4-day week, let's call them Angus... OK, so they're doing a day's less work per week. Someone else, Bob, was willing to pay for this work. Bob presumably still wants that work done. Bob will presumably turn to someone else, Carla. Carla presumably doesn't earn as much as Angus and wants the work.
So, what's the end result? Angus is working less, but maybe enjoying life more. Income has been re-distributed, with Angus not earning as much, but Carla earning more. Bob has got the work he wanted done. Is this a terrible outcome for the country?
I guess it depends a lot on how much better Angus is at the job. In some cases, Angus might be so much better that the right thing to do (for the business, for the nation) would be to work Angus into the ground, almost to the point where he sees his ancestors beckoning him to join them on the celestial firmanent. In others, it would probably be better all round for Angus to do less and Carla do more, because even if Angus is better he's not that much better.
Questions are- which jobs fall in which categories, and what to do when people think they are indespensably brilliant but aren't but the professional culture depends on bluffing that they are?
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
The Tories have one more budget to go before the election.
Depends how many new PMs we get in between and how different their policies are to the Sunak/Hunt combo.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
I agree that these marginal rates can be a bad thing. However, can I, in the spirit of Socrates, question your scenario above?
This person who chooses to work a 4-day week, let's call them Angus... OK, so they're doing a day's less work per week. Someone else, Bob, was willing to pay for this work. Bob presumably still wants that work done. Bob will presumably turn to someone else, Carla. Carla presumably doesn't earn as much as Angus and wants the work.
So, what's the end result? Angus is working less, but maybe enjoying life more. Income has been re-distributed, with Angus not earning as much, but Carla earning more. Bob has got the work he wanted done. Is this a terrible outcome for the country?
I guess it depends a lot on how much better Angus is at the job. In some cases, Angus might be so much better that the right thing to do (for the business, for the nation) would be to work Angus into the ground, almost to the point where he sees his ancestors beckoning him to join them on the celestial firmanent. In others, it would probably be better all round for Angus to do less and Carla do more, because even if Angus is better he's not that much better.
Questions are- which jobs fall in which categories, and what to do when people think they are indespensably brilliant but aren't but the professional culture depends on bluffing that they are?
The cemetery is full of indispensable people, as they say.
"Disposal income per person will fall by 6% this financial year and next, according to the OBR, representing the largest two-year fall in living standards since records began in the 1950s.
That could lead to people dipping into their savings to pay for things."
22m have less than £1k of savings, half of which have less than £100 and they are going to be the ones hit hardest......
The largest two-year fall in living standars since the 1950s - true, but that takes us back to, what, 2014 standards? Which weren't exactly penury. And given that the last two years have seen us paying for lockdown and the impact of war in Ukraine, not unexpected - when has there been a confluence of events like this?
And what do the BBC expect to be done about this? One strongly suspects they expect the chancellor to conjure up money from nowhere. Which was what got us into this mess in the first place.
As an intellectual exercise, to what year would PB readers be willing to retreat, in terms of living standards, before it would be considered unacceptable? To the nearest decade for older readers….
It is completely perverse to accept any decline in living standards. It is absolutely being inflicted deliberately by an ideologically-crazed minority peddling climate alarmism, and we are badly in need of a counter-narrative.
There are dozens of reasons for accepting declining living standards. We all have our hobbyhorses. I would, for example, accept a future where I was poorer - let's say one in which I need to work for another 12 months before retirement to retire on the same level of comfort - in return for a UK less trewn with graffiti and litter and with more trains. Others will have different priorities for what the state might do which might not equal 'living standards', or at least easily measurable ones.
If for example we suddenly had no smartphones or streaming tv would people be less happy. Probably not. Technology has made a small number of uber nerds rich but as time goes on its contribution to human happiness becomes less and less. Would i want to live without a refrigarator..hell no. Could i live without streaming tv. Of course.
That was, I'm sure, the argument of Communists in eastern Europe.
If people in the UK didn't have smartphones, and people in France did, I think people would notice.
Thats the point. In eastern europe they did have unreliable cars and lacked basic consumer goods. that hasnt been true in the west since at least the 60s or 70s. And im talking of a situation where no country has a smartphone not one does one doesnt. Do you think smartphones have been major beneficiaries for humanity because i could certainly live without them.
Every generation can look back at life 25 years ago and say "hey, life was pretty good back then because we had [y] and do we really need new fangled [x]".
So, people in the 1930s could have said "Life in the 1910s was pretty good; I mean we didn't have cars yet, with all that nasty pollution and the risk of getting knocked over. And who actually needs to go to the cinema anyway?"
And people in the 1950s could say "Life in the 1930s was pretty good. They already the cinema and cars, which is all you really need to lead a modern life. Do we really need jetplanes? And you used to be able to send your washing out for almost nothing. Is it really an improvement to have an unreliable and expensive machine and to do it yourself?"
Then people in the 1970s would say "Life in the 1950s was great. Already you innovations like washing machines and fridges than make home care simple. And the railway system was great - you could get anywhere in the UK cheaply. All there is today is colour TV and ridiculously expensive VCRs and the shows are exactly the same!"
Etcetera. Etcetera.
If we didn't advance technologically and France did. People would notice. And they would be spitting mad.
The difference is the tech elite actually shield their kids from tablets and smartphones. They know. The point is as im sure you will understand the marginal benefit of each wave of technological development is less and less and the associated costs more and more negative so that at some point the costs outweigh the benefits. We are arguably close to this point now which is why the dreams of silicon valley uber nerds will remain dreams,
Absurd assertions without evidence.
And as a member of the tech elite, I can assure you that I teach my kids how to use tech, I don't shield them from it.
ok an example. Social media like facebook and twitter. Have they contributed to the sum of human happiness in the same way as the invention of the automobile or refrigarator. I think not.
You honestly think that Facebook and Twitter are even in the top 10,000 innovations of this century?
Here's a question: has that modern (Communist and post-Communist) China had made no significant technological advancements/innovations that have significantly changed the world? Computers, the Internet, GNSS/GPS, many medical advances and drugs, all came from the west.
China have been very good at copying/productionising, but what major things have they invented? Widening it out, what major scientific breakthroughs have they made?
I'm not saying there are not any; I just can't immediately think of any.
There are many great Chinese scientists/mathematicians/computer scientists.
They can be found at Princeton, or Stanford, or Yale, or Chicago.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
I agree that these marginal rates can be a bad thing. However, can I, in the spirit of Socrates, question your scenario above?
This person who chooses to work a 4-day week, let's call them Angus... OK, so they're doing a day's less work per week. Someone else, Bob, was willing to pay for this work. Bob presumably still wants that work done. Bob will presumably turn to someone else, Carla. Carla presumably doesn't earn as much as Angus and wants the work.
So, what's the end result? Angus is working less, but maybe enjoying life more. Income has been re-distributed, with Angus not earning as much, but Carla earning more. Bob has got the work he wanted done. Is this a terrible outcome for the country?
I guess it depends a lot on how much better Angus is at the job. In some cases, Angus might be so much better that the right thing to do (for the business, for the nation) would be to work Angus into the ground, almost to the point where he sees his ancestors beckoning him to join them on the celestial firmanent. In others, it would probably be better all round for Angus to do less and Carla do more, because even if Angus is better he's not that much better.
Questions are- which jobs fall in which categories, and what to do when people think they are indespensably brilliant but aren't but the professional culture depends on bluffing that they are?
The cemetery is full of indispensable people, as they say.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
So some well-off people do less work, but if there is still work to be done maybe some people who are freed up by affordable childcare can now pursue that work? It's certain more complex than just considering the downside for the few, the upside for the many will likely be much larger.
That's not how it works, almost all of the time people working these roles are highly skilled and if they don't work it just doesn't get done the NHS waiting list is the bes example of this, or consultancies who take on fewer clients because they have fewer available workdays and collectively there's just less work being done. It is one of the reasons we have such poor productivity.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
But it doesn't make any sense that someone earning £130k would be better off in practice, in terms of take home pay etc, reducing their salary to £100k, which is what this situation effectively is. It is total madness.
I've been based in London with work recently and think that these people, earning £100k, are not even vaguely rich in this context, where a terraced house costs £700k. If you are earning £5k per month (after pensions) a large chunk of money would go servicing a mortgage, it is not like school/nursery fees are just a trivial expense, you can't actually afford to pay them.
The system is creating bizarre incentives, ie to work less, or to move out of London and the south east; this has caused a lot of problems within the public sector.
Indeed, people forget London stretches to Barking and Dagenham, Havering, Bexley, Orpington and Uxbridge it is not just Zone 1 and Zone 2, indeed some of the Outer suburbs of London even voted for Brexit!
Smoking related diseases/cessation services cost the NHS £2.6bn/year.
Following todays budget, the treasury rakes in over £10bn/year in tobacco tax.
Whether you take the left wing position that smokers are victims of the tobacco industry and the government should ban the sale of tobacco products and/or have an obligation to use all the tax duties to provide effective cessation services - or the conservative/libertarian position that stresses free agency and that the government shouldn’t tax above the cost of providing health services to smokers (preferably no tax at all - and health would be privatised) - surely we can all agree that government using smokers - who cluster around the lowest socioeconomic groups - as a cash cow - is utterly immoral?
Paying, on average, £1666 in tax, per smoker, per year - and getting £433 per person, per year back in nhs/cessation services? Smokers are getting a shit deal.
The tories moral compass needs recalibrating.
(apologies for the possibly the longest sentence ever written, btw)
No, legal but very highly taxed and alarming photos on the packets feels a good policy balance for me. Sorry smokers!
Why should the missing £7.4bn go into the general treasury pot instead of being spent on nhs/cessation services?
These are some of the very poorest and most vulnerable members of our society. Hunt has chosen to tax them to the eyeballs to subsidise tax cuts for - already very wealthy - senior doctors.
How is that moral?
Hm. Did you include
(a) disability costs, to central and local government? (b) illnesses to close relatives (passive smoking, effect on unborn children, chioldhood asthma, etc.)?
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
So some well-off people do less work, but if there is still work to be done maybe some people who are freed up by affordable childcare can now pursue that work? It's certain more complex than just considering the downside for the few, the upside for the many will likely be much larger.
That's not how it works, almost all of the time people working these roles are highly skilled and if they don't work it just doesn't get done the NHS waiting list is the bes example of this, or consultancies who take on fewer clients because they have fewer available workdays and collectively there's just less work being done. It is one of the reasons we have such poor productivity.
This is just rubbish. Very, very, very people are that indispensible.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
I agree that these marginal rates can be a bad thing. However, can I, in the spirit of Socrates, question your scenario above?
This person who chooses to work a 4-day week, let's call them Angus... OK, so they're doing a day's less work per week. Someone else, Bob, was willing to pay for this work. Bob presumably still wants that work done. Bob will presumably turn to someone else, Carla. Carla presumably doesn't earn as much as Angus and wants the work.
So, what's the end result? Angus is working less, but maybe enjoying life more. Income has been re-distributed, with Angus not earning as much, but Carla earning more. Bob has got the work he wanted done. Is this a terrible outcome for the country?
Carla might be in Hungary, of course.
It is a bit of a dilemma. I've been 4 days for quite a long time and I would wholly recommend it but I don't think it is economically neutral for the UK.
It would work if we could increase productivity at the same time.
There's some evidence that it can be made to work, at least in some businesses;
(Essentially, there's a certain amount of nonsense in most jobs that can reasonably be binned. But the critical thing is that you can't necessarily replace it with additional productive work, because human brains and bodies don't always work like that. The pointless pseudowork is just how we block of bits of downtime. If your boss knows what they're doing, that downtime might as well be hometime.
When I did GCSE Computing in the late 80's, we were told the story of an aircraft design firm that bought the latest computer technology to take the drudgery out of calculating whether wing designs would work. The staff mentally collapsed in about a month, because they were now being asked for more frequent bouts of creativity than their minds would generate. The drudgery was a useful buffer.)
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
I agree that these marginal rates can be a bad thing. However, can I, in the spirit of Socrates, question your scenario above?
This person who chooses to work a 4-day week, let's call them Angus... OK, so they're doing a day's less work per week. Someone else, Bob, was willing to pay for this work. Bob presumably still wants that work done. Bob will presumably turn to someone else, Carla. Carla presumably doesn't earn as much as Angus and wants the work.
So, what's the end result? Angus is working less, but maybe enjoying life more. Income has been re-distributed, with Angus not earning as much, but Carla earning more. Bob has got the work he wanted done. Is this a terrible outcome for the country?
I guess it depends a lot on how much better Angus is at the job. In some cases, Angus might be so much better that the right thing to do (for the business, for the nation) would be to work Angus into the ground, almost to the point where he sees his ancestors beckoning him to join them on the celestial firmanent. In others, it would probably be better all round for Angus to do less and Carla do more, because even if Angus is better he's not that much better.
Questions are- which jobs fall in which categories, and what to do when people think they are indespensably brilliant but aren't but the professional culture depends on bluffing that they are?
The cemetery is full of indispensable people, as they say.
Also, indisposed people.
Surely all those people in the cemetery are not indisposed but simply disposed?
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
I agree that these marginal rates can be a bad thing. However, can I, in the spirit of Socrates, question your scenario above?
This person who chooses to work a 4-day week, let's call them Angus... OK, so they're doing a day's less work per week. Someone else, Bob, was willing to pay for this work. Bob presumably still wants that work done. Bob will presumably turn to someone else, Carla. Carla presumably doesn't earn as much as Angus and wants the work.
So, what's the end result? Angus is working less, but maybe enjoying life more. Income has been re-distributed, with Angus not earning as much, but Carla earning more. Bob has got the work he wanted done. Is this a terrible outcome for the country?
I guess it depends a lot on how much better Angus is at the job. In some cases, Angus might be so much better that the right thing to do (for the business, for the nation) would be to work Angus into the ground, almost to the point where he sees his ancestors beckoning him to join them on the celestial firmanent. In others, it would probably be better all round for Angus to do less and Carla do more, because even if Angus is better he's not that much better.
Questions are- which jobs fall in which categories, and what to do when people think they are indespensably brilliant but aren't but the professional culture depends on bluffing that they are?
The cemetery is full of indispensable people, as they say.
Also, indisposed people.
Surely all those people in the cemetery are not indisposed but simply disposed?
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
I agree that these marginal rates can be a bad thing. However, can I, in the spirit of Socrates, question your scenario above?
This person who chooses to work a 4-day week, let's call them Angus... OK, so they're doing a day's less work per week. Someone else, Bob, was willing to pay for this work. Bob presumably still wants that work done. Bob will presumably turn to someone else, Carla. Carla presumably doesn't earn as much as Angus and wants the work.
So, what's the end result? Angus is working less, but maybe enjoying life more. Income has been re-distributed, with Angus not earning as much, but Carla earning more. Bob has got the work he wanted done. Is this a terrible outcome for the country?
I guess it depends a lot on how much better Angus is at the job. In some cases, Angus might be so much better that the right thing to do (for the business, for the nation) would be to work Angus into the ground, almost to the point where he sees his ancestors beckoning him to join them on the celestial firmanent. In others, it would probably be better all round for Angus to do less and Carla do more, because even if Angus is better he's not that much better.
Questions are- which jobs fall in which categories, and what to do when people think they are indespensably brilliant but aren't but the professional culture depends on bluffing that they are?
The cemetery is full of indispensable people, as they say.
Also, indisposed people.
Surely all those people in the cemetery are not indisposed but simply disposed?
Smoking related diseases/cessation services cost the NHS £2.6bn/year.
Following todays budget, the treasury rakes in over £10bn/year in tobacco tax.
Whether you take the left wing position that smokers are victims of the tobacco industry and the government should ban the sale of tobacco products and/or have an obligation to use all the tax duties to provide effective cessation services - or the conservative/libertarian position that stresses free agency and that the government shouldn’t tax above the cost of providing health services to smokers (preferably no tax at all - and health would be privatised) - surely we can all agree that government using smokers - who cluster around the lowest socioeconomic groups - as a cash cow - is utterly immoral?
Paying, on average, £1666 in tax, per smoker, per year - and getting £433 per person, per year back in nhs/cessation services? Smokers are getting a shit deal.
The tories moral compass needs recalibrating.
(apologies for the possibly the longest sentence ever written, btw)
No, legal but very highly taxed and alarming photos on the packets feels a good policy balance for me. Sorry smokers!
Why should the missing £7.4bn go into the general treasury pot instead of being spent on nhs/cessation services?
These are some of the very poorest and most vulnerable members of our society. Hunt has chosen to tax them to the eyeballs to subsidise tax cuts for - already very wealthy - senior doctors.
How is that moral?
Hm. Did you include
(a) disability costs, to central and local government? (b) illnesses to close relatives (passive smoking, effect on unborn children, chioldhood asthma, etc.)?
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
But it doesn't make any sense that someone earning £130k would be better off in practice, in terms of take home pay etc, reducing their salary to £100k, which is what this situation effectively is. It is total madness.
I've been based in London with work recently and think that these people, earning £100k, are not even vaguely rich in this context, where a terraced house costs £700k. If you are earning £5k per month (after pensions) a large chunk of money would go servicing a mortgage, it is not like school/nursery fees are just a trivial expense, you can't actually afford to pay them.
The system is creating bizarre incentives, ie to work less, or to move out of London and the south east; this has caused a lot of problems within the public sector.
Indeed, people forget London stretches to Barking and Dagenham, Havering, Bexley, Orpington and Uxbridge it is not just Zone 1 and Zone 2, indeed some of the Outer suburbs of London even voted for Brexit!
I think what you're describing is Greater London.
London itself, that great teeming metropolis, filled with the greatest brains of their generation, stretches from the Thames in the South, to Hampstead in the North, and from Richmond in the West to Tower Bridge in the East.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
I agree that these marginal rates can be a bad thing. However, can I, in the spirit of Socrates, question your scenario above?
This person who chooses to work a 4-day week, let's call them Angus... OK, so they're doing a day's less work per week. Someone else, Bob, was willing to pay for this work. Bob presumably still wants that work done. Bob will presumably turn to someone else, Carla. Carla presumably doesn't earn as much as Angus and wants the work.
So, what's the end result? Angus is working less, but maybe enjoying life more. Income has been re-distributed, with Angus not earning as much, but Carla earning more. Bob has got the work he wanted done. Is this a terrible outcome for the country?
I guess it depends a lot on how much better Angus is at the job. In some cases, Angus might be so much better that the right thing to do (for the business, for the nation) would be to work Angus into the ground, almost to the point where he sees his ancestors beckoning him to join them on the celestial firmanent. In others, it would probably be better all round for Angus to do less and Carla do more, because even if Angus is better he's not that much better.
Questions are- which jobs fall in which categories, and what to do when people think they are indespensably brilliant but aren't but the professional culture depends on bluffing that they are?
The cemetery is full of indispensable people, as they say.
Also, indisposed people.
Surely all those people in the cemetery are not indisposed but simply disposed?
"Disposal income per person will fall by 6% this financial year and next, according to the OBR, representing the largest two-year fall in living standards since records began in the 1950s.
That could lead to people dipping into their savings to pay for things."
22m have less than £1k of savings, half of which have less than £100 and they are going to be the ones hit hardest......
The largest two-year fall in living standars since the 1950s - true, but that takes us back to, what, 2014 standards? Which weren't exactly penury. And given that the last two years have seen us paying for lockdown and the impact of war in Ukraine, not unexpected - when has there been a confluence of events like this?
And what do the BBC expect to be done about this? One strongly suspects they expect the chancellor to conjure up money from nowhere. Which was what got us into this mess in the first place.
As an intellectual exercise, to what year would PB readers be willing to retreat, in terms of living standards, before it would be considered unacceptable? To the nearest decade for older readers….
It is completely perverse to accept any decline in living standards. It is absolutely being inflicted deliberately by an ideologically-crazed minority peddling climate alarmism, and we are badly in need of a counter-narrative.
There are dozens of reasons for accepting declining living standards. We all have our hobbyhorses. I would, for example, accept a future where I was poorer - let's say one in which I need to work for another 12 months before retirement to retire on the same level of comfort - in return for a UK less trewn with graffiti and litter and with more trains. Others will have different priorities for what the state might do which might not equal 'living standards', or at least easily measurable ones.
If for example we suddenly had no smartphones or streaming tv would people be less happy. Probably not. Technology has made a small number of uber nerds rich but as time goes on its contribution to human happiness becomes less and less. Would i want to live without a refrigarator..hell no. Could i live without streaming tv. Of course.
That was, I'm sure, the argument of Communists in eastern Europe.
If people in the UK didn't have smartphones, and people in France did, I think people would notice.
Thats the point. In eastern europe they did have unreliable cars and lacked basic consumer goods. that hasnt been true in the west since at least the 60s or 70s. And im talking of a situation where no country has a smartphone not one does one doesnt. Do you think smartphones have been major beneficiaries for humanity because i could certainly live without them.
Every generation can look back at life 25 years ago and say "hey, life was pretty good back then because we had [y] and do we really need new fangled [x]".
So, people in the 1930s could have said "Life in the 1910s was pretty good; I mean we didn't have cars yet, with all that nasty pollution and the risk of getting knocked over. And who actually needs to go to the cinema anyway?"
And people in the 1950s could say "Life in the 1930s was pretty good. They already the cinema and cars, which is all you really need to lead a modern life. Do we really need jetplanes? And you used to be able to send your washing out for almost nothing. Is it really an improvement to have an unreliable and expensive machine and to do it yourself?"
Then people in the 1970s would say "Life in the 1950s was great. Already you innovations like washing machines and fridges than make home care simple. And the railway system was great - you could get anywhere in the UK cheaply. All there is today is colour TV and ridiculously expensive VCRs and the shows are exactly the same!"
Etcetera. Etcetera.
If we didn't advance technologically and France did. People would notice. And they would be spitting mad.
The difference is the tech elite actually shield their kids from tablets and smartphones. They know. The point is as im sure you will understand the marginal benefit of each wave of technological development is less and less and the associated costs more and more negative so that at some point the costs outweigh the benefits. We are arguably close to this point now which is why the dreams of silicon valley uber nerds will remain dreams,
Absurd assertions without evidence.
And as a member of the tech elite, I can assure you that I teach my kids how to use tech, I don't shield them from it.
ok an example. Social media like facebook and twitter. Have they contributed to the sum of human happiness in the same way as the invention of the automobile or refrigarator. I think not.
You honestly think that Facebook and Twitter are even in the top 10,000 innovations of this century?
Here's a question: has that modern (Communist and post-Communist) China had made no significant technological advancements/innovations that have significantly changed the world? Computers, the Internet, GNSS/GPS, many medical advances and drugs, all came from the west.
China have been very good at copying/productionising, but what major things have they invented? Widening it out, what major scientific breakthroughs have they made?
I'm not saying there are not any; I just can't immediately think of any.
5g? Artemisin therapy for malaria a huge life saver.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
I agree that these marginal rates can be a bad thing. However, can I, in the spirit of Socrates, question your scenario above?
This person who chooses to work a 4-day week, let's call them Angus... OK, so they're doing a day's less work per week. Someone else, Bob, was willing to pay for this work. Bob presumably still wants that work done. Bob will presumably turn to someone else, Carla. Carla presumably doesn't earn as much as Angus and wants the work.
So, what's the end result? Angus is working less, but maybe enjoying life more. Income has been re-distributed, with Angus not earning as much, but Carla earning more. Bob has got the work he wanted done. Is this a terrible outcome for the country?
I guess it depends a lot on how much better Angus is at the job. In some cases, Angus might be so much better that the right thing to do (for the business, for the nation) would be to work Angus into the ground, almost to the point where he sees his ancestors beckoning him to join them on the celestial firmanent. In others, it would probably be better all round for Angus to do less and Carla do more, because even if Angus is better he's not that much better.
Questions are- which jobs fall in which categories, and what to do when people think they are indespensably brilliant but aren't but the professional culture depends on bluffing that they are?
The cemetery is full of indispensable people, as they say.
Also, indisposed people.
Surely all those people in the cemetery are not indisposed but simply disposed?
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
But it doesn't make any sense that someone earning £130k would be better off in practice, in terms of take home pay etc, reducing their salary to £100k, which is what this situation effectively is. It is total madness.
I've been based in London with work recently and think that these people, earning £100k, are not even vaguely rich in this context, where a terraced house costs £700k. If you are earning £5k per month (after pensions) a large chunk of money would go servicing a mortgage, it is not like school/nursery fees are just a trivial expense, you can't actually afford to pay them.
The system is creating bizarre incentives, ie to work less, or to move out of London and the south east; this has caused a lot of problems within the public sector.
Indeed, people forget London stretches to Barking and Dagenham, Havering, Bexley, Orpington and Uxbridge it is not just Zone 1 and Zone 2, indeed some of the Outer suburbs of London even voted for Brexit!
I think what you're describing is Greater London.
London itself, that great teeming metropolis, filled with the greatest brains of their generation, stretches from the Thames in the South, to Hampstead in the North, and from Richmond in the West to Tower Bridge in the East.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
I agree that these marginal rates can be a bad thing. However, can I, in the spirit of Socrates, question your scenario above?
This person who chooses to work a 4-day week, let's call them Angus... OK, so they're doing a day's less work per week. Someone else, Bob, was willing to pay for this work. Bob presumably still wants that work done. Bob will presumably turn to someone else, Carla. Carla presumably doesn't earn as much as Angus and wants the work.
So, what's the end result? Angus is working less, but maybe enjoying life more. Income has been re-distributed, with Angus not earning as much, but Carla earning more. Bob has got the work he wanted done. Is this a terrible outcome for the country?
I guess it depends a lot on how much better Angus is at the job. In some cases, Angus might be so much better that the right thing to do (for the business, for the nation) would be to work Angus into the ground, almost to the point where he sees his ancestors beckoning him to join them on the celestial firmanent. In others, it would probably be better all round for Angus to do less and Carla do more, because even if Angus is better he's not that much better.
Questions are- which jobs fall in which categories, and what to do when people think they are indespensably brilliant but aren't but the professional culture depends on bluffing that they are?
The cemetery is full of indispensable people, as they say.
Smoking related diseases/cessation services cost the NHS £2.6bn/year.
Following todays budget, the treasury rakes in over £10bn/year in tobacco tax.
Whether you take the left wing position that smokers are victims of the tobacco industry and the government should ban the sale of tobacco products and/or have an obligation to use all the tax duties to provide effective cessation services - or the conservative/libertarian position that stresses free agency and that the government shouldn’t tax above the cost of providing health services to smokers (preferably no tax at all - and health would be privatised) - surely we can all agree that government using smokers - who cluster around the lowest socioeconomic groups - as a cash cow - is utterly immoral?
Paying, on average, £1666 in tax, per smoker, per year - and getting £433 per person, per year back in nhs/cessation services? Smokers are getting a shit deal.
The tories moral compass needs recalibrating.
(apologies for the possibly the longest sentence ever written, btw)
No, legal but very highly taxed and alarming photos on the packets feels a good policy balance for me. Sorry smokers!
Why should the missing £7.4bn go into the general treasury pot instead of being spent on nhs/cessation services?
These are some of the very poorest and most vulnerable members of our society. Hunt has chosen to tax them to the eyeballs to subsidise tax cuts for - already very wealthy - senior doctors.
How is that moral?
Not really sure if it is particularly moral but I think it is the most pragmatic and would expect alternatives to have worse outcomes. Maybe that makes it moral but more of a pragmatist than a theologian myself.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
"...spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter..."
Sorry what's the downside? If the work genuinely needs doing someone else will get the opportunity. Quality of life is more than money.
Well absolutely, which is why so many people go for the 4 day week.
Ergo it's a good thing, ergo let's have more of it, ergo more tax rises for the wealthy!
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
But it doesn't make any sense that someone earning £130k would be better off in practice, in terms of take home pay etc, reducing their salary to £100k, which is what this situation effectively is. It is total madness.
I've been based in London with work recently and think that these people, earning £100k, are not even vaguely rich in this context, where a terraced house costs £700k. If you are earning £5k per month (after pensions) a large chunk of money would go servicing a mortgage, it is not like school/nursery fees are just a trivial expense, you can't actually afford to pay them.
The system is creating bizarre incentives, ie to work less, or to move out of London and the south east; this has caused a lot of problems within the public sector.
Indeed, people forget London stretches to Barking and Dagenham, Havering, Bexley, Orpington and Uxbridge it is not just Zone 1 and Zone 2, indeed some of the Outer suburbs of London even voted for Brexit!
I think what you're describing is Greater London.
London itself, that great teeming metropolis, filled with the greatest brains of their generation, stretches from the Thames in the South, to Hampstead in the North, and from Richmond in the West to Tower Bridge in the East.
London geography snobbery is a v weird thing.
You would be very foolish to take me too seriously.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
I agree that these marginal rates can be a bad thing. However, can I, in the spirit of Socrates, question your scenario above?
This person who chooses to work a 4-day week, let's call them Angus... OK, so they're doing a day's less work per week. Someone else, Bob, was willing to pay for this work. Bob presumably still wants that work done. Bob will presumably turn to someone else, Carla. Carla presumably doesn't earn as much as Angus and wants the work.
So, what's the end result? Angus is working less, but maybe enjoying life more. Income has been re-distributed, with Angus not earning as much, but Carla earning more. Bob has got the work he wanted done. Is this a terrible outcome for the country?
Because Carla probably has the capability to do the same job as Angus at another company full time, so where we have Angus doing 80% of a job and Carla doing 20% we should have Angus doing 100% and Carla doing 100% somewhere else. Even if Carla picks up a Monday somewhere and a Friday elsewhere it's still pretty big loss of output from two people who are highly skilled.
Sorry, I am unclear why you think Carla is only working 20% time...? Carla works in the same field as Angus. She's taking on extra work, building her brand, earning more.
We have lost a bit of output from Angus, but maybe Angus's children will grow up healthier and more capable because he's spending a bit more time with them.
Actually it's a bigger loss than just the EMA staff. The big money is in regulatory compliance by the pharmaceutical companies and this needs to be led by people in the EU to get the EU certifications. As this compliance is integrated with development work on new drugs that's a chunk of highly paid employment heading over the Channel.
Should add it's a relatively sensible thing to do. It's accepting reality.
Smoking related diseases/cessation services cost the NHS £2.6bn/year.
Following todays budget, the treasury rakes in over £10bn/year in tobacco tax.
Whether you take the left wing position that smokers are victims of the tobacco industry and the government should ban the sale of tobacco products and/or have an obligation to use all the tax duties to provide effective cessation services - or the conservative/libertarian position that stresses free agency and that the government shouldn’t tax above the cost of providing health services to smokers (preferably no tax at all - and health would be privatised) - surely we can all agree that government using smokers - who cluster around the lowest socioeconomic groups - as a cash cow - is utterly immoral?
Paying, on average, £1666 in tax, per smoker, per year - and getting £433 per person, per year back in nhs/cessation services? Smokers are getting a shit deal.
The tories moral compass needs recalibrating.
(apologies for the possibly the longest sentence ever written, btw)
No, legal but very highly taxed and alarming photos on the packets feels a good policy balance for me. Sorry smokers!
Why should the missing £7.4bn go into the general treasury pot instead of being spent on nhs/cessation services?
These are some of the very poorest and most vulnerable members of our society. Hunt has chosen to tax them to the eyeballs to subsidise tax cuts for - already very wealthy - senior doctors.
How is that moral?
Hm. Did you include
(a) disability costs, to central and local government? (b) illnesses to close relatives (passive smoking, effect on unborn children, chioldhood asthma, etc.)?
a) will be huge.
Smokers die younger - as smokers are reliably informed on the packet - saving the taxpayer huge amounts of money.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
But it doesn't make any sense that someone earning £130k would be better off in practice, in terms of take home pay etc, reducing their salary to £100k, which is what this situation effectively is. It is total madness.
I've been based in London with work recently and think that these people, earning £100k, are not even vaguely rich in this context, where a terraced house costs £700k. If you are earning £5k per month (after pensions) a large chunk of money would go servicing a mortgage, it is not like school/nursery fees are just a trivial expense, you can't actually afford to pay them.
The system is creating bizarre incentives, ie to work less, or to move out of London and the south east; this has caused a lot of problems within the public sector.
Indeed, people forget London stretches to Barking and Dagenham, Havering, Bexley, Orpington and Uxbridge it is not just Zone 1 and Zone 2, indeed some of the Outer suburbs of London even voted for Brexit!
Indeed! Uxbridge is so far from Central London that it’s citizens voted for Johnson. It’s part of the red wall!
Smoking related diseases/cessation services cost the NHS £2.6bn/year.
Following todays budget, the treasury rakes in over £10bn/year in tobacco tax.
Whether you take the left wing position that smokers are victims of the tobacco industry and the government should ban the sale of tobacco products and/or have an obligation to use all the tax duties to provide effective cessation services - or the conservative/libertarian position that stresses free agency and that the government shouldn’t tax above the cost of providing health services to smokers (preferably no tax at all - and health would be privatised) - surely we can all agree that government using smokers - who cluster around the lowest socioeconomic groups - as a cash cow - is utterly immoral?
Paying, on average, £1666 in tax, per smoker, per year - and getting £433 per person, per year back in nhs/cessation services? Smokers are getting a shit deal.
The tories moral compass needs recalibrating.
(apologies for the possibly the longest sentence ever written, btw)
No, legal but very highly taxed and alarming photos on the packets feels a good policy balance for me. Sorry smokers!
Why should the missing £7.4bn go into the general treasury pot instead of being spent on nhs/cessation services?
These are some of the very poorest and most vulnerable members of our society. Hunt has chosen to tax them to the eyeballs to subsidise tax cuts for - already very wealthy - senior doctors.
How is that moral?
Hm. Did you include
(a) disability costs, to central and local government? (b) illnesses to close relatives (passive smoking, effect on unborn children, chioldhood asthma, etc.)?
a) will be huge.
Yep. Not just disability allowance but the social care budget which is still not part of the NHS.
The other thing I forgot was - "NHS" usually means just the English one in this sort of discussion, so it's worth checking. So - perhaps - add on another 10% or so for the UK as a whole, for all costs, to be commensurable with the tax which all goes to the Treasury in the first instance and is therefore on a UK basis.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
But it doesn't make any sense that someone earning £130k would be better off in practice, in terms of take home pay etc, reducing their salary to £100k, which is what this situation effectively is. It is total madness.
I've been based in London with work recently and think that these people, earning £100k, are not even vaguely rich in this context, where a terraced house costs £700k. If you are earning £5k per month (after pensions) a large chunk of money would go servicing a mortgage, it is not like school/nursery fees are just a trivial expense, you can't actually afford to pay them.
The system is creating bizarre incentives, ie to work less, or to move out of London and the south east; this has caused a lot of problems within the public sector.
Indeed, people forget London stretches to Barking and Dagenham, Havering, Bexley, Orpington and Uxbridge it is not just Zone 1 and Zone 2, indeed some of the Outer suburbs of London even voted for Brexit!
I think what you're describing is Greater London.
London itself, that great teeming metropolis, filled with the greatest brains of their generation, stretches from the Thames in the South, to Hampstead in the North, and from Richmond in the West to Tower Bridge in the East.
Nah, when we get our independence we shall have Epping Forest. rUK can keep Harlow.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
But it doesn't make any sense that someone earning £130k would be better off in practice, in terms of take home pay etc, reducing their salary to £100k, which is what this situation effectively is. It is total madness.
I've been based in London with work recently and think that these people, earning £100k, are not even vaguely rich in this context, where a terraced house costs £700k. If you are earning £5k per month (after pensions) a large chunk of money would go servicing a mortgage, it is not like school/nursery fees are just a trivial expense, you can't actually afford to pay them.
The system is creating bizarre incentives, ie to work less, or to move out of London and the south east; this has caused a lot of problems within the public sector.
Indeed, people forget London stretches to Barking and Dagenham, Havering, Bexley, Orpington and Uxbridge it is not just Zone 1 and Zone 2, indeed some of the Outer suburbs of London even voted for Brexit!
I think what you're describing is Greater London.
London itself, that great teeming metropolis, filled with the greatest brains of their generation, stretches from the Thames in the South, to Hampstead in the North, and from Richmond in the West to Tower Bridge in the East.
Good to see Richmond resident Zac Goldsmith and Hampstead resident Liam Gallagher are apparently amongst the greatest brains of their generation!
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
So some well-off people do less work, but if there is still work to be done maybe some people who are freed up by affordable childcare can now pursue that work? It's certain more complex than just considering the downside for the few, the upside for the many will likely be much larger.
That's not how it works, almost all of the time people working these roles are highly skilled and if they don't work it just doesn't get done the NHS waiting list is the bes example of this, or consultancies who take on fewer clients because they have fewer available workdays and collectively there's just less work being done. It is one of the reasons we have such poor productivity.
This is just rubbish. Very, very, very people are that indispensible.
Surgeons, medical consultants, some kinds of engineers, some kinds of research scientists, high level data scientists or ML/AI engineers. All of these roles are in extremely high demand and will be in these pay brackets with many, many of them working 4 day weeks with the companies (or NHS) just having lower output.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
But it doesn't make any sense that someone earning £130k would be better off in practice, in terms of take home pay etc, reducing their salary to £100k, which is what this situation effectively is. It is total madness.
I've been based in London with work recently and think that these people, earning £100k, are not even vaguely rich in this context, where a terraced house costs £700k. If you are earning £5k per month (after pensions) a large chunk of money would go servicing a mortgage, it is not like school/nursery fees are just a trivial expense, you can't actually afford to pay them.
The system is creating bizarre incentives, ie to work less, or to move out of London and the south east; this has caused a lot of problems within the public sector.
Indeed, people forget London stretches to Barking and Dagenham, Havering, Bexley, Orpington and Uxbridge it is not just Zone 1 and Zone 2, indeed some of the Outer suburbs of London even voted for Brexit!
I think what you're describing is Greater London.
London itself, that great teeming metropolis, filled with the greatest brains of their generation, stretches from the Thames in the South, to Hampstead in the North, and from Richmond in the West to Tower Bridge in the East.
London geography snobbery is a v weird thing.
You would be very foolish to take me too seriously.
Smoking related diseases/cessation services cost the NHS £2.6bn/year.
Following todays budget, the treasury rakes in over £10bn/year in tobacco tax.
Whether you take the left wing position that smokers are victims of the tobacco industry and the government should ban the sale of tobacco products and/or have an obligation to use all the tax duties to provide effective cessation services - or the conservative/libertarian position that stresses free agency and that the government shouldn’t tax above the cost of providing health services to smokers (preferably no tax at all - and health would be privatised) - surely we can all agree that government using smokers - who cluster around the lowest socioeconomic groups - as a cash cow - is utterly immoral?
Paying, on average, £1666 in tax, per smoker, per year - and getting £433 per person, per year back in nhs/cessation services? Smokers are getting a shit deal.
The tories moral compass needs recalibrating.
(apologies for the possibly the longest sentence ever written, btw)
No, legal but very highly taxed and alarming photos on the packets feels a good policy balance for me. Sorry smokers!
Why should the missing £7.4bn go into the general treasury pot instead of being spent on nhs/cessation services?
These are some of the very poorest and most vulnerable members of our society. Hunt has chosen to tax them to the eyeballs to subsidise tax cuts for - already very wealthy - senior doctors.
How is that moral?
Hm. Did you include
(a) disability costs, to central and local government? (b) illnesses to close relatives (passive smoking, effect on unborn children, chioldhood asthma, etc.)?
a) will be huge.
Smokers die younger - as smokers are reliably informed on the packet - saving the taxpayer huge amounts of money.
Smoking related diseases/cessation services cost the NHS £2.6bn/year.
Following todays budget, the treasury rakes in over £10bn/year in tobacco tax.
Whether you take the left wing position that smokers are victims of the tobacco industry and the government should ban the sale of tobacco products and/or have an obligation to use all the tax duties to provide effective cessation services - or the conservative/libertarian position that stresses free agency and that the government shouldn’t tax above the cost of providing health services to smokers (preferably no tax at all - and health would be privatised) - surely we can all agree that government using smokers - who cluster around the lowest socioeconomic groups - as a cash cow - is utterly immoral?
Paying, on average, £1666 in tax, per smoker, per year - and getting £433 per person, per year back in nhs/cessation services? Smokers are getting a shit deal.
The tories moral compass needs recalibrating.
(apologies for the possibly the longest sentence ever written, btw)
No, legal but very highly taxed and alarming photos on the packets feels a good policy balance for me. Sorry smokers!
Why should the missing £7.4bn go into the general treasury pot instead of being spent on nhs/cessation services?
These are some of the very poorest and most vulnerable members of our society. Hunt has chosen to tax them to the eyeballs to subsidise tax cuts for - already very wealthy - senior doctors.
How is that moral?
Hm. Did you include
(a) disability costs, to central and local government? (b) illnesses to close relatives (passive smoking, effect on unborn children, chioldhood asthma, etc.)?
a) will be huge.
Smokers die younger - as smokers are reliably informed on the packet - saving the taxpayer huge amounts of money.
They’re an easy target for the tories.
Go after the vulnerable. That is their ideology.
Sickening.
But they are also disabled for longer. So they don't save in that sense.
Smoking related diseases/cessation services cost the NHS £2.6bn/year.
Following todays budget, the treasury rakes in over £10bn/year in tobacco tax.
Whether you take the left wing position that smokers are victims of the tobacco industry and the government should ban the sale of tobacco products and/or have an obligation to use all the tax duties to provide effective cessation services - or the conservative/libertarian position that stresses free agency and that the government shouldn’t tax above the cost of providing health services to smokers (preferably no tax at all - and health would be privatised) - surely we can all agree that government using smokers - who cluster around the lowest socioeconomic groups - as a cash cow - is utterly immoral?
Paying, on average, £1666 in tax, per smoker, per year - and getting £433 per person, per year back in nhs/cessation services? Smokers are getting a shit deal.
The tories moral compass needs recalibrating.
(apologies for the possibly the longest sentence ever written, btw)
No, legal but very highly taxed and alarming photos on the packets feels a good policy balance for me. Sorry smokers!
Why should the missing £7.4bn go into the general treasury pot instead of being spent on nhs/cessation services?
These are some of the very poorest and most vulnerable members of our society. Hunt has chosen to tax them to the eyeballs to subsidise tax cuts for - already very wealthy - senior doctors.
How is that moral?
Hm. Did you include
(a) disability costs, to central and local government? (b) illnesses to close relatives (passive smoking, effect on unborn children, chioldhood asthma, etc.)?
a) will be huge.
Smokers die younger - as smokers are reliably informed on the packet - saving the taxpayer huge amounts of money.
They’re an easy target for the tories.
Go after the vulnerable. That is their ideology.
Sickening.
I do see your point. However, the hefty taxes have been successful in disincentivising smoking, leading to better health outcomes.
The government should do the same with cocaine and other similar drugs.
IFS notices that the budget has actually made the £100,000 tax trap that @Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
I applauded the childcare for 1- and 2- year olds, but I hadn't realised it didn't apply to high earners. That's pretty stupid. Not only for the reasons Nick points out, but also because the proportion of £100k plus earners with one and two year old children must be a) tiny and b) disproportionately able to scale back under the ceiling and precisely the sort of people the economy would benefit from getting back to work.
I'm sorry but at the risk of sounding like an old socialist (again) people earning over £100k a year do not need taxpayers money to subsidise their child care. Where do you think the bulk of that money comes from? People earning a whole lot less.
There is a lot of real hardship in this country right now. The lifting of the life time limit for pension contributions was, to me, a fairly obscene bung to the wealthiest in our society at the cost of those with so much less. Paying their childcare too would have been repulsive.
I don't want to subsidise them out of some big love of higher earners (I am not one) but because my (admittedly untested) belief is that the country will be better off if we can get higher earners earning (and paying tax). I would expect the benefit to cost ratio of paying for childcare for higher earners to be greater than 1 (indeed, it probably has a higher BCR than for medium earners).
At over £100k a year they can afford child care out of their taxed income. Just as I did when paying private school fees. There are some who cannot earn because the absurd cost of child care in this country is higher than what they can hope to receive. People earning over £100k are not in that category and we need to focus the limited funds available to those who are.
But it doesn't make any sense that someone earning £130k would be better off in practice, in terms of take home pay etc, reducing their salary to £100k, which is what this situation effectively is. It is total madness.
I've been based in London with work recently and think that these people, earning £100k, are not even vaguely rich in this context, where a terraced house costs £700k. If you are earning £5k per month (after pensions) a large chunk of money would go servicing a mortgage, it is not like school/nursery fees are just a trivial expense, you can't actually afford to pay them.
The system is creating bizarre incentives, ie to work less, or to move out of London and the south east; this has caused a lot of problems within the public sector.
Indeed, people forget London stretches to Barking and Dagenham, Havering, Bexley, Orpington and Uxbridge it is not just Zone 1 and Zone 2, indeed some of the Outer suburbs of London even voted for Brexit!
I think what you're describing is Greater London.
London itself, that great teeming metropolis, filled with the greatest brains of their generation, stretches from the Thames in the South, to Hampstead in the North, and from Richmond in the West to Tower Bridge in the East.
Nah, when we get our independence we shall have Epping Forest. rUK can keep Harlow.
Old Harlow is alright, we are going there for lunch on Mothering Sunday. Epping Forest is partly already in London anyway
Again, all you end up doing is creating a disincentive for the highest earners to work full time. You can call them as many names as you like, think of them as unpatriotic, call them tax dodgers or whatever but they are rational. Someone earning £100k getting a £10k payrise gets to keep £3.8k or just over £300 quid a month, a marginal rate of 62%, if they have kids under 5 the marginal rate goes up over 80% and sometimes over 100%.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
So some well-off people do less work, but if there is still work to be done maybe some people who are freed up by affordable childcare can now pursue that work? It's certain more complex than just considering the downside for the few, the upside for the many will likely be much larger.
That's not how it works, almost all of the time people working these roles are highly skilled and if they don't work it just doesn't get done the NHS waiting list is the bes example of this, or consultancies who take on fewer clients because they have fewer available workdays and collectively there's just less work being done. It is one of the reasons we have such poor productivity.
This is just rubbish. Very, very, very people are that indispensible.
Surgeons, medical consultants, some kinds of engineers, some kinds of research scientists, high level data scientists or ML/AI engineers. All of these roles are in extremely high demand and will be in these pay brackets with many, many of them working 4 day weeks with the companies (or NHS) just having lower output.
Sure ... they are not indispensible though. Plenty of people have those skills & experience.
And plenty more have the potential to do those jobs ... they just need the opportunity.
Comments
'You're as working class as foie gras.'
Apparently marrying a working class woman doesn't make me working class.
China have been very good at copying/productionising, but what major things have they invented? Widening it out, what major scientific breakthroughs have they made?
I'm not saying there are not any; I just can't immediately think of any.
Just heard a pensioner complain that the 10.1% increase in her pension will leave her worse off as she moves into the higher tax band
As a pensioner my response is tough
And I can come up with three, if you like:
(1) Modern solar panels, which will revolutionize the cost of energy over the next hundred years.
(2) Battery technology, which harnesses that abundant energy and allows it to be used in places and in ways that were simply inconceivable.
(And these two mean that people in tiny villages in Africa can look forward to having a refrigerator in the near future.)
(3) Artificial intelligence and Machine Learning: ChatGPT is just the merest glimpse of what we're going to get.
I'm all for increasing the top rate of tax to 45% or 50% for all income above £100k and removing the withdrawal of the personal allowance / childcare.
At a first order approximation it would probably be broadly revenue neutral, but boost economic activity as the incentive to work more remains.
There isn't a finite amount of high income work which can be done by fungible high earners.
Many, if not most high earners are responsible for deciding just how much they earn by how much work they do. The sorts of people who own their own business, for example. If you make it pointless for them to earn more, they won't do the work, and the GV will go un Added.
https://www.telegraph.co.uk/business/2023/03/15/bank-england-emergency-talks-crisis-deepens-credit-suisse/
As the 8th baronet also used to remark, you can't tame a wild pony.
I hope that comes as some comfort to you.
https://www.youtube.com/watch?v=ZiJa9diJOMk&t=71s
On another note, I was speaking to a pig farmer (strictly, pig breeder) today and he said that at the recent NFU conference SKS spoke a lot more common sense than the Cons DEFRA minister and received a far warmer reception.
Personally I like the increasing of the NI threshold and freezing of the income tax one as oldies should be paying more.
On the flip side, the same person can choose to work a 4 day week and drop down to £88k per year, they lose £500 quid a month in net salary but they gain 52 days off per year for it and 3 day weekends. The day rate for that additional day per week is just under £200, which for someone in that position just isn't worth it. I think the specific maths for someone without kids is a ~40% drop in the day rate for that additional day worked when looking at the marginal gain.
Faced with those numbers, the possibility of spending more time with the family, being able to take them to zoo, park, long weekends away with the wife and daughter vs grinding out an additional day so the government can claim over 60% of it.
No, it's completely idiotic to have these marginal rates and this was the budget to get rid of them, a proper Tory government would have done so already because it is a barrier to growth.
Smoking related diseases/cessation services cost the NHS £2.6bn/year.
Following todays budget, the treasury rakes in over £10bn/year in tobacco tax.
Whether you take the left wing position that smokers are victims of the tobacco industry and the government should ban the sale of tobacco products and/or have an obligation to use all the tax duties to provide effective cessation services - or the conservative/libertarian position that stresses free agency and that the government shouldn’t tax above the cost of providing health services to smokers (preferably no tax at all - and health would be privatised) - surely we can all agree that government using smokers - who cluster around the lowest socioeconomic groups - as a cash cow - is utterly immoral?
Paying, on average, £1666 in tax, per smoker, per year - and getting £433 per person, per year back in nhs/cessation services? Smokers are getting a shit deal.
The tories moral compass needs recalibrating.
(apologies for the possibly the longest sentence ever written, btw)
In 1974, when asked about the most important invention, most people would have said "Spaceships!"
When the correct answer was "silicon microchips".
Sorry what's the downside? If the work genuinely needs doing someone else will get the opportunity. Quality of life is more than money.
What I thought was a bit remiss was that the Chancellor talked about 50 year olds being out of the employment market but then addressed the issue of child care. I would have thought there were many many more 50 year olds dealing with elderly relatives than with toddlers.
I may be projecting, but biology would suggest this it the case.
To be fair, it is a much harder problem to crack. And it is probably saving the chancellor money in a lot of cases.
This person who chooses to work a 4-day week, let's call them Angus... OK, so they're doing a day's less work per week. Someone else, Bob, was willing to pay for this work. Bob presumably still wants that work done. Bob will presumably turn to someone else, Carla. Carla presumably doesn't earn as much as Angus and wants the work.
So, what's the end result? Angus is working less, but maybe enjoying life more. Income has been re-distributed, with Angus not earning as much, but Carla earning more. Bob has got the work he wanted done. Is this a terrible outcome for the country?
Better work-life balance for the 100k-er.
And someone else has the opportunity to do the work and earn a bit of the good stuff.
There's probably some - but, as you say, hard to think of any.
https://twitter.com/Maks_NAFO_FELLA/status/1636067916599705604?ref_src=twsrc^tfw|twcamp^tweetembed|twterm^1636067916599705604|twgr^|twcon^s1_&ref_url=
"Turkey is ready to let US warships pass through the Bosphorus, because of the "incident" with the MQ-9 and Su-27" - Turkish Defense Minister
It is a bit of a dilemma. I've been 4 days for quite a long time and I would wholly recommend it but I don't think it is economically neutral for the UK.
It would work if we could increase productivity at the same time.
The only luck is that CS have been a well trailed, slow moving problem case so you'd hope for others having done their containment planning some time ago.
These are some of the very poorest and most vulnerable members of our society. Hunt has chosen to tax them to the eyeballs to subsidise tax cuts for - already very wealthy - senior doctors.
How is that moral?
Questions are- which jobs fall in which categories, and what to do when people think they are indespensably brilliant but aren't but the professional culture depends on bluffing that they are?
They can be found at Princeton, or Stanford, or Yale, or Chicago.
Why would they stay in China ?
(a) disability costs, to central and local government?
(b) illnesses to close relatives (passive smoking, effect on unborn children, chioldhood asthma, etc.)?
https://www.bbc.co.uk/news/business-63808326
(Essentially, there's a certain amount of nonsense in most jobs that can reasonably be binned. But the critical thing is that you can't necessarily replace it with additional productive work, because human brains and bodies don't always work like that. The pointless pseudowork is just how we block of bits of downtime. If your boss knows what they're doing, that downtime might as well be hometime.
When I did GCSE Computing in the late 80's, we were told the story of an aircraft design firm that bought the latest computer technology to take the drudgery out of calculating whether wing designs would work. The staff mentally collapsed in about a month, because they were now being asked for more frequent bouts of creativity than their minds would generate. The drudgery was a useful buffer.)
London itself, that great teeming metropolis, filled with the greatest brains of their generation, stretches from the Thames in the South, to Hampstead in the North, and from Richmond in the West to Tower Bridge in the East.
Artemisin therapy for malaria a huge life saver.
We have lost a bit of output from Angus, but maybe Angus's children will grow up healthier and more capable because he's spending a bit more time with them.
Should add it's a relatively sensible thing to do. It's accepting reality.
They’re an easy target for the tories.
Go after the vulnerable. That is their ideology.
Sickening.
The other thing I forgot was - "NHS" usually means just the English one in this sort of discussion, so it's worth checking. So - perhaps - add on another 10% or so for the UK as a whole, for all costs, to be commensurable with the tax which all goes to the Treasury in the first instance and is therefore on a UK basis.
Not sure how it all works out in the end though!
The government should do the same with cocaine and other similar drugs.
And plenty more have the potential to do those jobs ... they just need the opportunity.