Who are working people anyway?

Killjoy Starmer, in the run up to Rachel's dreaded budget, seems to be spending considerable time and effort trying to define who are working people.   (Personally I think he should be spending the time wisely sacking the hundreds of thousands more civil servants we now have  than before 2019 - 400k more civil servants yet government productivity is lower not higher - go figure).

 Well Starmer's current definition of working people is "goes out and earns their living, usually paid in a sort of monthly cheque" but they did not have the ability to "write a cheque to get out of difficulties". 

I'm wondering what this means - I think it means anyone who doesn't have savings.

68% of the population have savings. So that means only 32% of the population can be considered to be working people. 

What about my daughter - she has a job and she has £1000 in her bank but she also has £60,000 in student loan debts so technically she is insolvent.  Does that mean Starmer and Rachel think she is or isn't a working person? 

To clarify this messy definition Starmer was asked by Sky News whether he would classify a working person as someone whose income derived from assets, such as shares or property.  Starmer was clear this is not a working person.  Clearly Starmer is not a working person - he absolutely falls into this camp.

The problem however is that Landlords nowadays may have income from property but not profit. 

The government publishes lots of data on this kind of stuff ONS data

Taking someone with a total income of £12,570 (poor by most definitions) - roughly 34% of this cohort have some income from property or shares. Now it might be those poor greedy pensioners that have a rental property to supplement their pension income but the data tells a slightly different story to Starmer's narrative.

Rachel keeps going on about growth and opportunities - presumably she means business rather than growing the bloated fat unproductive state any further than it already is (51% of "working" people work for the state).  So how does business go about investing in these opportunities.  Well the idea of risk capital has been around a long time.  There are no certain opportunities - there's always risk.  So investment is about risk and the idea of shares/equity was created. Shares allow you to purchase part of a business and to sound like a financial services TV advert "your capital is at risk". If the investment pays off then the shareholder will get dividends (income). If the investment fails they can lose everything.

New ventures are higher risk than companies with a solid trading history. Pension funds invest in shares.  So back to our "working people".  Everyone aged 22+ earning more than £10,000 per year must automatically be enrolled in a workplace pension. So someone on minimum wage (effectively £23,795 per year) must also be enrolled in  a workplace pension.  The workplace pension will invest the contributions in stocks and shares.  OK they won't be deriving IMMEDIATE income from shares but they will when they retire or draw their pension.  So even someone on £10k per year is not going to align to Starmer's definition of "working people".

This is starting to sound like some Jarvis Cocker lyrics - "I want to tax the common people, common people like you".

Anyway it seems clear that anyone who is not "working people" will be taxed by Starmer and Rachel.

The problem is people eventually decide it's not worth it.  I've scaled back my business since Labour came to town. They were making more out of it than me - and that's what the conservatives did let alone any pain and suffering Rachel thinks need to be inflicted on me. Huge amounts of VAT per year, huge amounts in corporation tax, huge amounts in employer national insurance. All of these were about 3-4x what I was paying myself and then I get taxed on what I pay myself.  It really isn't worth the effort. 

As Labour don't consider me to be "working people" I might as well not work.  They will suffer as tax revenues from me will fall massively and many people I know are thinking the same.  The COVID social experiment suggests lots of people feel the same. There's an additional 900,000 young people not working compared to before COVID however the real story is the number of economically inactive people in the 50 - 64 age group (my demographic) has grown by 68% since lockdown. 

According to the IFS  people aged 64+ have grown to be paying 64% of all tax income.  I wasnt  sure the IFS data was correct (they tend to be very left wing and support Labour's narrative about rich greedy pensioners) so I did my own analysis from HMRC data. Here's the distribution

Under 20             0.08%

20-24             1.57%

25-29             5.35%

30-34             8.74%

35-39             10.85%

40-44             13.26%

45-49             14.14%

50-54             14.69%

55-59             12.02%

60-64             7.17%

65-69             4.22% 4.22%

70-74             2.96%   7.18%

75 and over      4.94%   11.12%

HMRC data (2022) says that over 64s pay 11% of all tax - still sizeable but not 64%. And the "working age" 50-64 pay 34% of all tax (£76 Billion).  Let's say 20% of this group decide it's not worth it and elect to take it easy - that's £15Bn drop in tax revenues based on today's level's of taxation (which are probably going to be higher after Rachel's speech).  The thing about this group is they probably have grown up children, own their own home hence they are relatively less dependent on earned income and could litterally opt out.

Why work for THE MAN when you can take it easy.