Not everyone is inheriting a 5 bedroom half million pound mansion
Not in London, that's for sure 🙂
But, sadly the rich don’t want it that way
I think you'll find that the "rich" are already propping up the taxation system disproportionately. The simple unpalatable fact is that the tax take across society is not sufficient for the spend required. The highest 1% of earners pay 28% of income tax (not all tax). https://fullfact.org/economy/do-top-1-earners-pay-28-tax-burden/
Belgium, France, Italy, Germany... all have a significantly higher tax take than we do (33% of GDP). Want Denmark's health and social care? That tops the list and will cost a tax burden of 46% of GDP. So does society want to pay half as much MORE tax as we do currently?
I don't need to be a politician to know the answer to that one.
Belgium, France, Italy, Germany… all have a significantly higher tax take than we do (33% of GDP). Want Denmark’s health and social care? That tops the list and will cost a tax burden of 46% of GDP. So does society want to pay half as much MORE tax as we do currently?
I don’t need to be a politician to know the answer to that one.
And we can see the results of that choice around us now - our infrastructure has been run down to such an extent that when we receive a shock, like Covid, it crumbles. I would be happy to move (back) to Denmark and exchange the tax money for the social system, but giving shysters like Gove a big wad of cash and trusting him to do the right thing would be insane.
Not everyone is inheriting a 5 bedroom half million pound mansion
Not in London, that’s for sure 🙂
Yeah typed that in my 3 bedroom semi in glasgow , got to learn to dream bigger 🙂 🙂
Whilst I see it’s merits, someone has to pay, I am getting pretty narked. I’m 37, so I’m from a generation that had to pay for its education, got locked out of the housing market/have eye watering mortgages, been blamed for an economic crash I had nothing to do with, seen zero pay rises in 10 years, seen my pension terms eroded and moved further in to the distance and now, I am going to have to pay for the end of my life too, whilst being saddled with a mortgage and probably children by then.
If only it ended up working like that. I reckon it'll still end up being means tested, so if you've been reasonably financially prudent, you get to pay for it twice.
Could be worse though, could be from the generation that followed.
If you want to give your kids a good start in life, I’d suggest that waiting until they are 55 is a bit late to be thinking about it.
Bit of an over-simplification - people develop lifetime views of their spending. I can (hypothetically) send my daughter to finishing school today because I know I will inherit the family mansion at a later point.
"I like to pay taxes. With them, I buy civilization" Oliver Wendell Holmes.
Denmark gets it. UK doesn't.
our infrastructure has been run down to such an extent that when we receive a shock, like Covid, it crumbles
Could not agree more. It's not a waste of resource to buy capacity for outlier events. See every UK families savings account. Then expand up to country scale.
Dr.
You don't know that though. It might be needed for your parents care or yours
Belgium, France, Italy, Germany… all have a significantly higher tax take than we do (33% of GDP). Want Denmark’s health and social care? That tops the list and will cost a tax burden of 46% of GDP. So does society want to pay half as much MORE tax as we do currently?
I don’t need to be a politician to know the answer to that one.
A complicated issue.
We've had nearly 10 years of the Tories (via the tabloids) telling everyone that we can have first world welfare state for 3rd world contributions if only we get rid of the EU / scroungers / benefit cheats / people of non white skin colour etc etc
This has somewhat skewed the expectations...
We’ve had nearly 10 years of the Tories (via the tabloids) telling everyone that we can have first world welfare state for 3rd world contributions if only we get rid of the EU / scroungers / benefit cheats / people of non white skin colour etc etc
This has somewhat skewed the expectations…
We've had 50 years of governments of all colours treating the link between required public spending and taxation as if it doesn't exist. Indeed 'tax and spend' is a political insult.
Just typed out a reply saying its not the fairest way as you have those who have worked hard for a home or nest egg to leave behind paying for those who maybe lived in council properties all their lives and have no savings
PLEASE can we stop perpetuating the myth that people get a home and savings through working hard, whilst people living in council housing and without savings do not. It's flat out ****ing insulting to the millions of people in this country working bloody hard for a pittance.
On unearned wealth. My parents bought their first house for hundreds in the late 60s. Twice they took on new mortgages to move upmarket. They now have a house worth well over half a million but they have paid much less than that for it as they benefited from massive house price inflation.
They are in their 80s and unlikely to be around for another decade. I'm pushing 60. That inheritance is not going to affect my life enormously - I have paid my mortgage off. If I had inherited in my 30s of course it would have been differnt
Between us is over a million quids worth of property that we have paid far less for in actual cold hard cash. thats unearned wealth.
If my parents need care then their wealth will be used to pay for it - that way they can have quality home care
PLEASE can we stop perpetuating the myth that people get a home and savings through working hard, whilst people living in council housing and without savings do not. It’s flat out **** insulting to the millions of people in this country working bloody hard for a pittance.
I think another thing the Cv crisis has shown us is that we depend more on people who get a poor level of pay than we had previously been willing to admit. However, that doesn't mean that people with good incomes don't work hard.
Bit of an over-simplification – people develop lifetime views of their spending. I can (hypothetically) send my daughter to finishing school today because I know I will inherit the family mansion at a later point.
I can see "I can afford to take this risk now, because if it goes wrong, my family will bail me out". I don't think that's the same as counting on future inheritance, though.
Between us is over a million quids worth of property that we have paid far less for in actual cold hard cash. thats unearned wealth.
Lucky you. I bought a house and then saw the value tumble to such an extent that I had to hand back the keys. Several years savings down the pan. Will that entitle me to a discount on my home care?
Fast forward and suppose I now have a half million quid house that I paid a half million quid of taxed earnings for. Shall I pay the same wealth tax as your parents?
Better than that, you will get it for free if you have handed the keys back and no longer own a house.
Better than that, you will get it for free if you have handed the keys back and no longer own a house.
Maybe they should pay ME to come round and spoonfeed me porridge? 🙂
People need to stop thinking that because they bought a house (instead of renting a house as presumably they have to live somewhere) that any increase in the value is because they have worked so hard and why should anyone take that profit away from them.
My house is worth many times what I pad for it. If it all goes to fund my care at end of life then so be it.
they bought a house (instead of renting a house as presumably they have to live somewhere)
Perhaps this indicates part of the solution - give renters proper safeguards so that they can avoid fuelling the housing market in order to avoid rapacious landlords?
A big issue is that people who are relatively well off (a) don't accept that they are relatively well off (remember that idiot on AQ who insisted at 80k he was under average earnings?) and (b) believe that their wealth is "deserved" due to their hard work and skill rather than (also) involving a substantial dose of luck.
That's not to say the relatively well off haven't worked hard, but they haven't necessarily worked any harder than those less fortunate. And as for those who believe they "saved" for their house that magically went up by a factor of 10 in value while they were living in it...where do you start?
And as for those who believe they “saved” for their house that magically went up by a factor of 10 in value while they were living in it…where do you start?
Maybe by checking your facts? Possibly they suffered massive negative equity on their first house purchases, then also got hit by a duff Endowment policy and then struggled to put the necessary money into a pension. Not all oldies have the fab run of luck that led to a massive home investment.
My house (in the rich South) is worth about three times what I paid for it, not ten times.
But feel free to crack on with your Daily Mail headlines 😉
I'd prefer it if we removed self employment tax loopholes. Why allow people to pay themselves below the taxable threshold, then have made up expenses and 'drawings' to cover their lavish lifestyles.
People need to stop thinking that because they bought a house (instead of renting a house as presumably they have to live somewhere) that any increase in the value is because they have worked so hard and why should anyone take that profit away from them.
But the rich have been doing this for centuries
But its not ok for someone who has spent 40 years unblocking toilets , fixing your car , building houses etc etc to want to leave their kids something ?
The fact is there is enough money in this country to pay for social care , free school meals and the NHS but the solution is probably one that upsets everyone from the lowest payed to the richest tory party donors , we all have to stump up a bit more .
That’s not to say the relatively well off haven’t worked hard, but they haven’t necessarily worked any harder than those less fortunate. And as for those who believe they “saved” for their house that magically went up by a factor of 10 in value while they were living in it…where do you start?
I suspect that the more knowledge based your job, the less hard you have to work, certainly in terms of hours.
A big issue is that people who are relatively well off (a) don’t accept that they are relatively well off
Yup- - we get that on here a lot. I am rich in UK terms as I have a job earning just over national average wage and I have hundreds of thousands in unearned wealth from property
This sounds likethe usual issue's of "let tax the others".
If you want more then everyone has to pay more tax. Not just those you think "must be loaded" because they are older (different situations) / house is "worth" (the price it is now it not relevant it's where they live) .
Yup- – we get that on here a lot. I am rich in UK terms as I have a job earning just over national average wage and I have hundreds of thousands in unearned wealth from property
TJ i dont think that your situation is as common as you seem to think , certainly the hundreds of thousands in property part .
Tax should be based on what you earn plain and simple
If someone is going to argue that folks start paying more for services they may need, then at what point do people start getting discounts for services they dont need. Do I get a discount as i have no children requiring educating by the state for example?
And taking it a step further, can smokers get a discount as they'll die off earlier and cost the state less?
As has been suggested already, if there is a shortfall ramp up inheritance tax, which has the additional benefit of addressing social inequality at the same time.
Its common amongst folk my age and a bit younger - basically you have to have bought before the boom in prices.
I would be quite happy to have paid more tax to pay for decent services. Too late now as I am about to retire on a tiny income
TJ i dont think that your situation is as common as you seem to think , certainly the hundreds of thousands in property part .
There's a lot of wealth in the UK, just not very evenly spread. However, Median total household wealth in April 2016 to March 2018 was £286,600.
4. Trends in average wealth in Great Britain
The median and the mean are both measures of “average wealth”. Median net wealth is the wealth of what would be the middle household, if all the households in Great Britain were sorted from poorest to richest. The mean is the total wealth of all households divided by the number of households.
Both measures provide useful information and additionally, the ratio between mean and median net wealth provides an internationally recognised measure of wealth inequality, with a larger ratio indicating higher levels of inequality.
Figure 2 shows the median and mean total household net wealth over time. Median total household wealth in April 2016 to March 2018 was £286,600.
Looking at trends over time, there was an increase of 7% in median total household wealth between July 2006 and June 2008, and July 2008 and June 2010. Median wealth was then broadly unchanged between June 2010 and June 2014. Since then, median wealth has been increasing in real terms, with a 9% increase in April 2016 to March 2018, compared with the previous two-year period.
Mean total wealth is higher than the median, and was £564,300 in April 2016 to March 2018, an increase from £508,000 in April 2014 to March 2016. The fact that the mean is higher than the median shows that the distribution of wealth is “unequal”.
The mean has increased in real terms in each survey period, relative to the period before. The rate of growth observed in the last two survey periods has been higher than in the previous four periods, at 12% and 11% above inflation respectively.
Do I get a discount as i have no children requiring educating by the state for example?
As long as you're happy to not benefit from any welfare which they pay for once you've retired......
The chickens have to come home to roost at some point - but with a succession of Tory governments, they're never to going to penalise their voters who have benefitted the most from the post-war economic boom and actually ask them to pay for the public services they use.
Index-linked, final salary pensions (unaffordable), huge increase in house values (from doing nothing) and yet for 30 out of the last 40 years voted for tax cuts whilst our national infrastructure and local council budgets have been slaughtered. Social care accounts for a huge proportion of local council budgets and yet no one's prepared to pay for it.
I agree on a wealth tax for inheritance - we have no kids and there's no reason why that asset shouldn't be used to pay for our health and social care in our twilight years. I'm all for euthanasia if it means I get to choose when and how I leave this life. If pro-lifers disagree, they can pay for everyone else!
Can't see any way of squaring that circle - Covid is going to leave a huge deficit in public finances and Brexit is the icing on the cake in terms of economic self-harm.
I think another thing the Cv crisis has shown us is that we depend more on people who get a poor level of pay than we had previously been willing to admit. However, that doesn’t mean that people with good incomes don’t work hard.
The crisis will undoubtedly also show us that we don't give a flying **** about those people beyond a little patronising clap 5 minutes a week. And nowhere in my statement did I suggest that high earners don't work hard. I'm merely highlighting the erroneous link between working hard and property ownership/savings.
That report on wealth. Am i right in assuming that that 280k is based on total assets, and not savings?
Either way I don't have 280k worth of assets to my name, despite earning well above the national average. I can only assume that the vast majority of that wealth has been accumulated through property price rises.
I hope that I can bring my kids up to be better with money than I used to be. I also hope I can leave a nest egg for them to help reduce financial stress.
That report on wealth. Am i right in assuming that that 280k is based on total assets, and not savings?
those things generally include everything so savings and investments as well as property value and pensions. In general terms this wealth tends to be concentrated in the older generations (although there is variation here too) as a result of not only having had more time to accumulate wealth but also having the benefits of house price rises and more generous pensions than is the case now. You don't have to have a particularly brilliant pension to be work 280k. Retiring on that today would only get you the equivalent of around £7k pa for an annuity that rises with inflation and has spousal benefits.
As someone involved in a successful family business I’d disagree entirely with the scrapping of inheritance.
My father in law owns the businesses, the children all work for the business and will be inheriting a mix of property and business ownership. They’ve all worked in the family business since they were children. They have each been through the hardships of getting the business of the floor and deserve to inherit what they have worked towards.
When they receive their inheritance they will each pay the full tax on it. If Inheritance was to be abolished and the funds or the proceeds given to the state, I can imagine there will be a lot of people looking for even more ways to avoid paying tax.
It would have been ideal to receive inheritance when we were first buying a house and it would be great to give my children a house when they are buying their first house. But pragmatism says that isn’t possible. My children’s inheritance will likely pay for their pensions when it comes to that time.
They have each been through the hardships of getting the business of the floor and deserve to inherit what they have worked towards.
That really seems like an argument that they should have appropriate shares of the business *now*, rather than at some point in the future.
That report on wealth. Am i right in assuming that that 280k is based on total assets, and not savings?
A nice table showing where it all is (for the whole UK):
[url= https://live.staticflickr.com/65535/50159813462_0c6083cf39_z.jp g" target="_blank">https://live.staticflickr.com/65535/50159813462_0c6083cf39_z.jp g"/> [/img][/url][url= https://flic.kr/p/2jqsa13 ]Wealth[/url] by [url= https://www.flickr.com/photos/brf/ ]Ben Freeman[/url], on Flickr
and getting slightly less evenly spread as well...
[url= https://live.staticflickr.com/65535/50159822912_dc2b54baa1_z.jp g" target="_blank">https://live.staticflickr.com/65535/50159822912_dc2b54baa1_z.jp g"/> [/img][/url][url= https://flic.kr/p/2jqscNY ]Wealth 2[/url] by [url= https://www.flickr.com/photos/brf/ ]Ben Freeman[/url], on Flickr
intesting one, as expected if you can't afford a house property wealth isn't very significant, whereas if you bought one in the 70s for 6d, you're minted..
[url= https://live.staticflickr.com/65535/50159589451_a24f457b5f_z.jp g" target="_blank">https://live.staticflickr.com/65535/50159589451_a24f457b5f_z.jp g"/> [/img][/url][url= https://flic.kr/p/2jqr1pM ]Wealth 3[/url] by [url= https://www.flickr.com/photos/brf/ ]Ben Freeman[/url], on Flickr
and unsuprisingly older people tend to be wealthier than younger people...
[url= https://live.staticflickr.com/65535/50159838532_1e47350c7e_z.jp g" target="_blank">https://live.staticflickr.com/65535/50159838532_1e47350c7e_z.jp g"/> [/img][/url][url= https://flic.kr/p/2jqshsh ]Wealth 4[/url] by [url= https://www.flickr.com/photos/brf/ ]Ben Freeman[/url], on Flickr
It’s great the way society has to pay because successive governments have ****ed it up.
On the plus side great way to make independence sound even better.
. I also hope I can leave a nest egg for them to help reduce financial stress.
Is it too much to hope for a future where this would be utterly unnecessary?
As pointed out before, the way to give your children a head start in life is early on, not on your deathbed.
That really seems like an argument that they should have appropriate shares of the business *now*, rather than at some point in the future.
It does sound like that. And then when they pass on the inheritance the people who receive it then keep hold of it and then pass it to their children upon death and on it goes.
Sort of sums up exactly what is wrong with inheritance...
Index-linked, final salary pensions (unaffordable)
Not necessarily. I have such a pension; my employer and I both put a percentage of my earnings into a fund, that fund is invested and my pension is paid from it. Nobody else is paying for it. I chose to work for that employer partly for that reason; I could have been paid more had I worked for a different employer.
Similarly, I've never been a big spender, I've saved (from my taxed income) to pay for me and my wife in retirement (and possible ill health care). Why should I pay a wealth tax on those savings?
They never had this problem in Logans run!!
Just saying.
Not necessarily. I have such a pension; my employer and I both put a percentage of my earnings into a fund, that fund is invested and my pension is paid from it.
Unless I misunderstand, that's not a final salary (defined benefit) pension.
