Tax the broadest shoulders
Labour seem to have it in for those with the "Broadest Shoulders".
I thought it would be interesting to see who these people are with the "Broadest Shoulders". Multi-millionaire Killjoy Starmer seems to have sloping shoulders himself - so it won't be him.
Looking at HMRC data from 2022, there were 31.5 million tax payers in the 19/20 tax year.
27.8 million of these were basic rate tax payers so 2.7 million were higher rate tax payers. And 629,000 earned more than £100k per year and paid the then higher rate tax.
Allegedly the UK population is 67 million so there are 35.5 Million people who do not pay any tax. There are approximately 15 million children to age 18. And another 17.5 Million - presumably Labour's Greedy pensioners, people on benefits, people in prisons and a bunch of other people. Anyway more people dont pay any tax than do pay tax.
Let's take a higher earner with a nice salary of £150k per year. This person pays £53,703 in tax, £5010 in National insurance £19,444 in employers national insurance and takes home £91,286 of their £150k salary.
40% of of their salary goes to the tax man.
If you are "unfortunate" enough to earn between £100,000 and £123,000 you effectively pay a marginal tax rate of 60% + national insurance. A far higher rate than the super rich ! If you earn this level you would be better off earning less. It would make sense to pay additional pension contributions or a salary sacrifice service.
There are 1.9% of tax payers that pay additional rate tax.
The top 15.8 million people (23%) out of the 67 million population paid 90.5% of all tax.
The top 10% pay 60% of all tax.
The top 1% (315,000 people) paid 30% of all tax.
Let's take the top 10 individuals in the UK and look at how much tax they paid per year
- Alex Gerko, £664.5m. ...
- Bernie Ecclestone, £652.6m. ...
- Denise, John and Peter Coates, £375.9m. ...
- Fred and Peter Done and family, £204.6m. ...
- Sir Tim Martin, £167.1m. ...
- Sir James Dyson and family, £156m. ...
- The Weston family, £146.2m. ...
- Mike Ashley, £139.4m.
- John Bloor £181.1m
- John Timpson £99.8m
These guys are paying huge lottery win sums in tax EVERY YEAR.
I think these guys are paying their way.
It is worth briefly looking at Scotland. England,Wales and Northern Ireland have the same tax bands. Scotland doesn't.
The 3 countries have 24/25 Tax bands of:
£0-£12,570 0%
£12,570 - £50,270 20%
£50,270 - £125,140 40%
> £125,140 45%
These ignore national insurance which is essentially another tax.
Scotland does their own thing. Their bands are:
£0 - £12,570 0%
£12,570 - £14,876 19%
£14,876 - £26,561 20%
£26,561 - £43,662 21%
£43,662 - £75,000 42%
£75,000 - £125,140 45%
> £125,140 48%
Adding national insurance, a Scottish top rate tax payer is paying 56% tax (ie tax man gets more than you do).
On the surface you would think the Scots already have the broadest shoulders. You would think Scotland would therefore have the highest tax contribution relative to their GDP. Strangely however the ratio is lower than England, Wales or Northern Ireland. The Scots are not paying their way - maybe that's reflected in the latest spending cuts of £1.5Bn to fix their black hole.
Sweden is considered to be a very high tax country. Sure taxes are high but somehow the population thinks they get fair value. Their standard tax rate is 32% (comparable to the UK's effective rate of 28% (20% + 8% NI) - which was actually 20%+12% = 32% only recently) and their highest rate of tax is 52% (actually lower than the UKs highest rate of tax+NI of 53%). There is no council tax or other stealth taxes such as inheritance tax. You get tax allowances for your mortgage costs etc. Actually Sweden looks like a low tax economy compared to the UK.
Personally I am confused why so few people in the UK pay taxes. I don't mean the rich. I mean the "poor". Someone on minimum wage working 35 hours per week is paid £11.44 per hour which equates to £20,820.80 per year so they should be paying £1540.20 in tax and £616.80 in national insurance. Yet there are 35.5 Million people who do not pay any tax.
Children 14M
Pensioners 12.7M people
Total 26.7M people
So there are 8.8 Million people somewhere. Let's dig a bit deeper.
Disabled 1.2M
Job seekers 1.6M
We still have 6M people unaccounted for.
My guess is there are 6M people working but not paying taxes - deliveroo riders, plumbers, uber drivers etc.
Lets assume 80% of these earn the equivalent of minimum wage and the other 20% dont. If the tax and national insurance was collected on the invisible work force then that would be £12Bn in tax revenues - pretty close to the supposed black hole.
Now Killjoy Starmer will probably tax the rich rather than bother chasing these invisible workers.
Reminder: The top 1% (315,000 people) paid 30% of all tax.
If 20% of these decide to move abroad (63,000 people) that's a big hit to tax revenues - to the tune of £45Bn. Forget about the supposed £20Bn black hole which Labour "discovered". When Italy is offering tax exiles a flat 20% tax rate - why wouldnt you move? The top 1% on average pay £143,000 tax per year - why not move to Italy and pay just £53,900 per year. Or maybe move to Dubai and pay zero tax per year.
Now my forecast of 63,000 leaving the UK may be pessimistic. The Henley Private Wealth Migration has calculated 128,000 millionaires are set to leave the UK in 2024 to avoid punitive Labour taxes. That's potentially £90Bn less tax revenue. Rachel - tell more more about this supposed £20Bn black hole you found???
As Labour is introducing VAT on private schools, it looks a whole lot more attractive to send your kids to a private English speaking school in Italy where VAT on school fees is ILLEGAL under EU law.
I suppose that's one benefit of Brexit - it's allowed Killjoy Starmer to charge VAT
Rather than taxing those with the Broadest Shoulders, maybe Killjoy should trim the vast army of unproductive public sector employees.
It should be pointed out that of the 31.5 million tax payers, 16 million either work for the government or are funded by the government. Only 49% of working tax payers actually create wealth - the remaining 51% are a a tax burden.
To illustrate this, there are 400k more civil servants now than before the pandemic. What are the 400k people doing? Productivity in government is at an all time low - clearly throwing more people at it doesnt work.
Serious questions have to be asked about the NHS. Apparently there's a major shortage of nurses, doctors etc yet I know a GP on unemployement benefit unable to find work - apparently not an isolated case. A friend of mine is a midwife - her status is what the NHS call "Bank" - basically not full time and available for work when the NHS needs her. She is not agency - she's "bank". She hasn't had work in weeks yet her former colleagues claim they are over worked - I guess babies come when they come.
In the meantime she is looking for work elsewhere for example in a pharmacy.
All very strange.
Tax income is about 33% of GDP yet the government is spending 45% of GDP - and growing.
The reality is Government needs to go on a diet. Firstly scrap final salary pensions - the £2.6 TRILLION black hole needs to be fixed. Give everyone their pension contribution - they can decide to invest it in a pension or uplift their salary - their choice. This will give transparency on how well public sector employees are really paid.
Every department needs to sack 10% of staff. Considering 16 million people work for the government I dont think 10% reductions would be that bad. Probably most of these people need to be sacked anyway for poor performance rather than paid redundancy. If Labour sack 10% for every year in office then government will be trimmed down to 10 million people. Still way too high but 6 million less however government spending will be about down to about 26% of GDP so there will be a budget surplus to pay down the debt. Currently government debt is about 100% of GBP (£2.4 TRILLION). With a surplus it would only take 14 years to pay off the debt.
We can then have the conversation about whether there needs to be tax rises.
Over time I am increasingly gaining more respect for Margaret Thatcher - her values and her insight.
"The problem with socialism is that you eventually run out of other people's money"
"Self-reliance has been sneered at as if it were an absurd suburban pretention. Thrift has been denigrated as if it were greed. The desire of parents to choose and to struggle for what they themselves regarded as the best possible education for their children has been scorned.”
"Let them [socialists] learn that it is not a function of the State to possess as much as possible. It is not a function of the State to grab as much as it can get away with. It is not a function of the State to act as ring-master, to crack the whip, dictate the load which all of us must carry or say how high we may climb. It is not a function of the State to ensure that no-one climbs higher than anyone else. All that is the philosophy of socialism."
For all Thatchers term in office she worked for free. She was never paid a penny - she did it because she believed in it (and she had a rich husband). Ask multi-millionaire Rishi Sunak if he drew his Prime Minister's salary or Killjoy Starmer if he's working for free (with his net worth of £7.7 Million).
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