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0 pointsbargainbin5mo ago0 comments

Care to elaborate a bit on the UK comment, because it’s not clear what you mean or if you even live here?

The UK doesn’t tax the wealthy or their corporations either. Meanwhile high earners like myself are kept from even middle class aspirations by aggressive income tax.

All signs point to that income tax, specifically at my bracket, increasing in the next budget, leaving me ostensibly poorer than people earning less than me.

The whole system is broken because they refuse to tax the wealthy at an equivalent rate to the working class.

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mvdwoord5mo ago

I do not live in the UK, but across the channel.. Had to look it up a bit as I do not follow this in great detail but there is some significant debate there on inheritance taxes I believe?

I appreciate that this is a complex topic, but the point I tried to make in response was that these things are rarely as simple as people make them out to be. Increasing taxes on wealth transfers could have all sorts of side effects which are not easy to link as nothing in the economy happens in isolation. I thought the UK was perhaps a relevant example, as France and Sweden have been recently as well.

The economy is not a zero sum game, and the rich can get richer while the poor get richer as well. Maybe this is not a fair representation of what is going on, and I am certainly no expert on the US economy, but the whole "just tax the rich" mantra does not seem obviously true or effective to me.

I agree though that the system as a whole feels broken.. but also, because it is "small club, and we ain't in it". Wealth has a significant influence on policy...

rsynnott5mo ago

That was blown out of all proportion, tbh; the UK used to have a tax carveout for the upper-middle-class which allows unused pension funds to be inherited tax-free, and this was in practice used as a tax avoidance mechanism, and that's going away, but it really isn't a particularly big deal in the scheme of things.

(Or there was another change to the privileged treatment of farms and family businesses, but again, you're not talking about a huge change.)

aydyn5mo ago

How can you be poorer than people earning less than you? Thats not how progressive tax works. Am I misunderstanding something or is UK that messed up or something?

mvdwoord5mo ago

Not how progressive tax works, but it is the reality, e.g. in The Netherlands. Once you go over certain thresholds, you lose certain benefits leading to a poverty trap in some sense where the incentives of the system do not align with the implied goals of a healthy economy.

StackRanker30005mo ago

Yes, it’s similar in the UK.

If you make over £100k, you lose your personal tax-free allowance. That means that your effective tax rate from £100k-£125,140 is 60%

That doesn’t in itself make you worse off than people making less than you, but when one parent makes over £100k, that’s the cut-off for receiving 30 hours of free childcare, as well as additional tax-free childcare up to £2000

So if you have small children with childcare needs, you can suddenly be worse off as soon as you or your partner hit £100k

One way to avoid both of these is to pay the additional money into your pension instead

j / k navigate · click thread line to collapse

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mvdwoord5mo ago

I do not live in the UK, but across the channel.. Had to look it up a bit as I do not follow this in great detail but there is some significant debate there on inheritance taxes I believe?

I agree though that the system as a whole feels broken.. but also, because it is "small club, and we ain't in it". Wealth has a significant influence on policy...

rsynnott5mo ago

(Or there was another change to the privileged treatment of farms and family businesses, but again, you're not talking about a huge change.)

aydyn5mo ago

How can you be poorer than people earning less than you? Thats not how progressive tax works. Am I misunderstanding something or is UK that messed up or something?

mvdwoord5mo ago

StackRanker30005mo ago

Yes, it’s similar in the UK.

If you make over £100k, you lose your personal tax-free allowance. That means that your effective tax rate from £100k-£125,140 is 60%

So if you have small children with childcare needs, you can suddenly be worse off as soon as you or your partner hit £100k

One way to avoid both of these is to pay the additional money into your pension instead

j / k navigate · click thread line to collapse