Top 1% of Britons own 24% of nation's assets

tangled_metal

I used to know a couple of guys who worked for job centre. One dealt directly with those who had grievances or the main advisers wanted to get rid of because they didn't fit into a nice category.

So he dealt with the very well off lady who'd come in to pay up in full her contributions to the pension (IIRC). That's a full working life's worth because she never worked. To the guy who'd just had his dole (I think he got a giro which he cashed at the PO) and had spent it on alcohol. He'd come back less than 3 hours from getting the giro! He got aggressive and violent. My mate was the most senior there even though he was on base pay grade. The guy even tried the race card (he was black). After he made a comment about my mate being brave behind the glass my mate came out front to speak to him. The guy left sharpish!

I only give these stories because these job.centre staff are doing a hard job, not that well paid if they're front facing staff and have to deal with aggressive people at their last tether without protection in many cases. You really think you could give good service to your "clients" in their position? I don't blame them if they've hardened to their customer's plight.

dinyull

No doubt it's a difficult job, but there aren't many jobs where you can treat all of your "clients" like your worst and expect to be successful.

wallace_and_gromit

Isn't most of the UK's wealth held in domestic property and pensions? If so, "redistributing" this could prove politically tricky: "OK Mr Average. You've done nothing wrong but we're going to take 20% of your pension and force you to downsize your house so we can give the money to someone we consider more deserving."

So we're left with raising money via conventional taxation, and tweaks round the edges e.g. IHT just don't raise very much. The only way to raise lots of tax is to tax lots of people non-trivial amounts. To propose this is currently electoral suicide in the UK, so we're in the position we're in. I think the current government is committed to not increasing taxes on income and to reducing corporation tax, and there's not really that big a tax base left to go at!

airborne_warrior

rjsterry wrote:

Airborne Warrior wrote:

rjsterry wrote:

Airborne Warrior wrote:

Have no problem with rich people making money and acquiring assets. They usually have drive, brains and employ people. I do have a problem with poor people scrounging off the state though cause they can't be arsed to get a job.

Yes, I know not all poor people are scroungers.

Dry your eyes.

Out of interest, where do you sit on a landowner taking a subsidy for leaving some land fallow, rather than farming or developing it? When is taking advantage of some offer of government money or tax break OK and when is it scrounging?

What I would say it the UK is far better off having more rich people who are greedy than poor people who are greedy.

Because...? Better off how?

Rich people on the whole contribute more to society in the form of employment opportunities, pay more taxes (most do) and spend more money on consumer goods. Poor people don't.

cycleclinic

we are tinkering at the margins because that is all poltics can do. The main problem is what policy can achieve it is limited by the mathematics and the way money flows. That cannot be changed that is fundemental. We have to acknowledge this then design the welfare system accordingly. This is why sucessive goverment alway fail, people expect they can deliver more than is actually possible.

haydenm

Airborne Warrior wrote:

rjsterry wrote:

Airborne Warrior wrote:

rjsterry wrote:

Airborne Warrior wrote:

Have no problem with rich people making money and acquiring assets. They usually have drive, brains and employ people. I do have a problem with poor people scrounging off the state though cause they can't be arsed to get a job.

Yes, I know not all poor people are scroungers.

Dry your eyes.

Out of interest, where do you sit on a landowner taking a subsidy for leaving some land fallow, rather than farming or developing it? When is taking advantage of some offer of government money or tax break OK and when is it scrounging?

What I would say it the UK is far better off having more rich people who are greedy than poor people who are greedy.

Because...? Better off how?

Rich people on the whole contribute more to society in the form of employment opportunities, pay more taxes (most do) and spend more money on consumer goods. Poor people don't.

I agree. How do we make poor people richer so we don't have the problem anymore?

I would suggest that having 74.5% of working age people in work and generally good living standards for the poor we are all 'rich' if you are looking in from the rest of the world. (Obviously some people are still missed by the system)

tangled_metal

Dinyull wrote:

No doubt it's a difficult job, but there aren't many jobs where you can treat all of your "clients" like your worst and expect to be successful.

Not many employers who react to the.murder of one of it's front of house staff by choosing to remove the security glass between public and staff neither.

I agree that you should suck it up and put up with grief but violence isn't acceptable. If my private sector employer saw one of our customers assaulting or threatening one of their employees that customer would be escorted off the premises and never dealt with again. Our directors would speak to someone senior in our customer's business to make sure the guy didn't deal with.us again.

The issue they had back then, it was a good free years ago under Blair's government when more were coming into the benefits system apparently, was the managers were taking away security and not listening to genuine fears. All in the name of presenting a better customer interface for their clients, who in some cases were real scum.

BTW I've seen argumentative clients, completely drunk demanding more money before now. That was not in my local job centre but one not too far away that I'd dropped into to check out he vacancies. It wasn't helped that they were in a building with a pub upstairs and a PO round the corner. BTW I'll admit that was a good length of time ago so things probably changed a bit. I'd bet not that much though.

BTW my last dealings with job centre was when I was made redundant when my employer went bust. I claimed benefit, got the right run around because they wanted information from the administrators. Then after I signed off benefits, only one month signing on, I got a paid a further 2 weeks later for only 2 weeks benefits. They cancelled 3 weeks at the beginning for reasons they never fully explained. I was working by then so never followed it up.

So I have experience of one side of job centre but been told of the other. There's serious issues on both sides of the job centre desk if you ask me!

rjsterry

Airborne Warrior wrote:

rjsterry wrote:

Airborne Warrior wrote:

rjsterry wrote:

Airborne Warrior wrote:

Have no problem with rich people making money and acquiring assets. They usually have drive, brains and employ people. I do have a problem with poor people scrounging off the state though cause they can't be arsed to get a job.

Yes, I know not all poor people are scroungers.

Dry your eyes.

Out of interest, where do you sit on a landowner taking a subsidy for leaving some land fallow, rather than farming or developing it? When is taking advantage of some offer of government money or tax break OK and when is it scrounging?

What I would say it the UK is far better off having more rich people who are greedy than poor people who are greedy.

Because...? Better off how?

Rich people on the whole contribute more to society in the form of employment opportunities, pay more taxes (most do) and spend more money on consumer goods. Poor people don't.

But you were talking about greedy rich people, who would presumably be looking to absolutely minimise how much they contributed. It's also more than a little reductive to value people purely on how much they contribute to GDP, don't you think?

dinyull

Yep. I'd bet there are as many rich folk using tax avoidance measures as there are scroungers relying on state handouts.

rick_chasey

Wallace and Gromit wrote:

Isn't most of the UK's wealth held in domestic property and pensions? If so, "redistributing" this could prove politically tricky: "OK Mr Average. You've done nothing wrong but we're going to take 20% of your pension and force you to downsize your house so we can give the money to someone we consider more deserving."

So we're left with raising money via conventional taxation, and tweaks round the edges e.g. IHT just don't raise very much. The only way to raise lots of tax is to tax lots of people non-trivial amounts. To propose this is currently electoral suicide in the UK, so we're in the position we're in. I think the current government is committed to not increasing taxes on income and to reducing corporation tax, and there's not really that big a tax base left to go at!

Isn't it more focusing the future growth in earnings on those with less, rather than those with more?

So keep growing the pie, just more in favour of those with less money.

It's not a zero-sum game. If you see it like that, that's how you end up with warfare of some description.

surrey_commuter

Rick Chasey wrote:

Wallace and Gromit wrote:

Isn't most of the UK's wealth held in domestic property and pensions? If so, "redistributing" this could prove politically tricky: "OK Mr Average. You've done nothing wrong but we're going to take 20% of your pension and force you to downsize your house so we can give the money to someone we consider more deserving."

So we're left with raising money via conventional taxation, and tweaks round the edges e.g. IHT just don't raise very much. The only way to raise lots of tax is to tax lots of people non-trivial amounts. To propose this is currently electoral suicide in the UK, so we're in the position we're in. I think the current government is committed to not increasing taxes on income and to reducing corporation tax, and there's not really that big a tax base left to go at!

Isn't it more focusing the future growth in earnings on those with less, rather than those with more?

So keep growing the pie, just more in favour of those with less money.

It's not a zero-sum game. If you see it like that, that's how you end up with warfare of some description.

Remove all tax deductions and universal benefits. Use the savings to massively increase the income tax threshold and target benefits at those who need it.

I would also make NI part of income tax so we have some honesty.

cycleclinic

surrey commutor is right though. He has elaborate on what I said earlier. We can play at the margins on tax but that about it. since 1995 tax take in the U.K has hovered between 36% and 38% GDP. Every election the parties compete on the basis of spending that differs by about 1% of GDP. Politics is in a trap of our own making as we demand more than we are willing to spend.

Ben6899

I don't have an issue with this. I'd happily be in that 1%.

rjsterry

Surrey Commuter wrote:

Rick Chasey wrote:

Wallace and Gromit wrote:

Isn't most of the UK's wealth held in domestic property and pensions? If so, "redistributing" this could prove politically tricky: "OK Mr Average. You've done nothing wrong but we're going to take 20% of your pension and force you to downsize your house so we can give the money to someone we consider more deserving."

So we're left with raising money via conventional taxation, and tweaks round the edges e.g. IHT just don't raise very much. The only way to raise lots of tax is to tax lots of people non-trivial amounts. To propose this is currently electoral suicide in the UK, so we're in the position we're in. I think the current government is committed to not increasing taxes on income and to reducing corporation tax, and there's not really that big a tax base left to go at!

Isn't it more focusing the future growth in earnings on those with less, rather than those with more?

So keep growing the pie, just more in favour of those with less money.

It's not a zero-sum game. If you see it like that, that's how you end up with warfare of some description.

Remove all tax deductions and universal benefits. Use the savings to massively increase the income tax threshold and target benefits at those who need it.

I would also make NI part of income tax so we have some honesty.

Given the number of people who already earn at or below the existing threshold (found a figure from a couple of years ago of about 3 million households), this would have limited benefit. Without some figures, it's all a bit hypothetical. What would be the net gain (or loss) of converting tax breaks and universal benefits to a higher tax threshold? Gut feeling is that it might save on HMRC admin, but otherwise be fairly neutral. It also removes one useful way that the government can influence behaviour.

wallace_and_gromit

Rick Chasey wrote:

So keep growing the pie, just more in favour of those with less money.

How would you go about achieving this? It sounds good in principle but something different to the current way of doing things is needed and it's not obvious what this should be.

wallace_and_gromit

Surrey Commuter wrote:

Use the savings to massively increase the income tax threshold and target benefits at those who need it.

Problem with this is that you soon end up with a large proportion of the electorate who

a) can no longer benefit from income tax reductions as they don't pay income tax to start with; and

b) are more detached from the funding of state activities than those who do pay income tax.

The unexpected consequence of (a) is that the benefit of introducing a higher threshold is a one-off and folk - or their Guardian sympathisers - start moaning about not benefiting from future reductions in tax rates! Or more seriously, income tax reductions then become a very blunt way of trying to help the lower earners as low earners don't pay any income tax to be reduced.

I was previously a fan of a high income tax threshold but now favour a low threshold and a lower basic rate, so the net tax take is the same.

surrey_commuter

rjsterry wrote:

Surrey Commuter wrote:

Rick Chasey wrote:

Wallace and Gromit wrote:

Isn't most of the UK's wealth held in domestic property and pensions? If so, "redistributing" this could prove politically tricky: "OK Mr Average. You've done nothing wrong but we're going to take 20% of your pension and force you to downsize your house so we can give the money to someone we consider more deserving."

So we're left with raising money via conventional taxation, and tweaks round the edges e.g. IHT just don't raise very much. The only way to raise lots of tax is to tax lots of people non-trivial amounts. To propose this is currently electoral suicide in the UK, so we're in the position we're in. I think the current government is committed to not increasing taxes on income and to reducing corporation tax, and there's not really that big a tax base left to go at!

Isn't it more focusing the future growth in earnings on those with less, rather than those with more?

So keep growing the pie, just more in favour of those with less money.

It's not a zero-sum game. If you see it like that, that's how you end up with warfare of some description.

Remove all tax deductions and universal benefits. Use the savings to massively increase the income tax threshold and target benefits at those who need it.

I would also make NI part of income tax so we have some honesty.

Given the number of people who already earn at or below the existing threshold (found a figure from a couple of years ago of about 3 million households), this would have limited benefit. Without some figures, it's all a bit hypothetical. What would be the net gain (or loss) of converting tax breaks and universal benefits to a higher tax threshold? Gut feeling is that it might save on HMRC admin, but otherwise be fairly neutral. It also removes one useful way that the government can influence behaviour.

I inherently believe that people should get to chose how they spend their own money so want to reduce the number of people who pay tax with one hand and get govt hand outs with the other.

I would also regionalise the level of benefit payments so that the available funds can best be targeted.

The estimate for JAMS is 6 million households so it would benefit them according to this report
http://www.resolutionfoundation.org/med ... e-squeeze/

surrey_commuter

Wallace and Gromit wrote:

Surrey Commuter wrote:

Use the savings to massively increase the income tax threshold and target benefits at those who need it.

Problem with this is that you soon end up with a large proportion of the electorate who

a) can no longer benefit from income tax reductions as they don't pay income tax to start with; and

b) are more detached from the funding of state activities than those who do pay income tax.

The unexpected consequence of (a) is that the benefit of introducing a higher threshold is a one-off and folk - or their Guardian sympathisers - start moaning about not benefiting from future reductions in tax rates! Or more seriously, income tax reductions then become a very blunt way of trying to help the lower earners as low earners don't pay any income tax to be reduced.

I was previously a fan of a high income tax threshold but now favour a low threshold and a lower basic rate, so the net tax take is the same.

but then more people are dependent on state handouts - why not let them keep their own money and not be dependent upon the state

surrey_commuter

The cost of tax breaks for pension savings is estimated at £48bn a year. The original goal was to encourage people to save so that they are not dependent on the state in old age. This number is so huge that it is obviously going way beyond that remit. An estimated three quarters is going to higher rate taxpayers.

In my (unelectable) world the tax threshold would be the same as the max benefit level and the same as your tax free pension accrual threshold. Using back of a fag packet economics this would be around £20k.

With a nod to Mamba/mrfp there would be no incentive to having more than 2 kids which would chip in a few quid into the kitty.

kingstongraham

Surrey Commuter wrote:

The cost of tax breaks for pension savings is estimated at £48bn a year. The original goal was to encourage people to save so that they are not dependent on the state in old age. This number is so huge that it is obviously going way beyond that remit. An estimated three quarters is going to higher rate taxpayers.

In my (unelectable) world the tax threshold would be the same as the max benefit level and the same as your tax free pension accrual threshold. Using back of a fag packet economics this would be around £20k.

With a nod to Mamba/mrfp there would be no incentive to having more than 2 kids which would chip in a few quid into the kitty.

How is that estimated - eventually the tax gets paid when the pension is taken if there is substantially more than the state would have paid.

surrey_commuter

KingstonGraham wrote:

Surrey Commuter wrote:

The cost of tax breaks for pension savings is estimated at £48bn a year. The original goal was to encourage people to save so that they are not dependent on the state in old age. This number is so huge that it is obviously going way beyond that remit. An estimated three quarters is going to higher rate taxpayers.

In my (unelectable) world the tax threshold would be the same as the max benefit level and the same as your tax free pension accrual threshold. Using back of a fag packet economics this would be around £20k.

With a nod to Mamba/mrfp there would be no incentive to having more than 2 kids which would chip in a few quid into the kitty.

How is that estimated - eventually the tax gets paid when the pension is taken if there is substantially more than the state would have paid.

that is the cost to the taxman of people making tax contributions.

If you believe that we are living beyond our means then tough decisions need to be made. Alternatively if you think that debt does not matter then carry on with the champagne spending on a pepsi-cola wallet.

How about envisaging a surplus of £50bn per annum to start putting a dent in the outstanding debt. that would still take us 34 years to pay it off.

mr_goo

:evil:

kingstongraham

Surrey Commuter wrote:

KingstonGraham wrote:

Surrey Commuter wrote:

The cost of tax breaks for pension savings is estimated at £48bn a year. The original goal was to encourage people to save so that they are not dependent on the state in old age. This number is so huge that it is obviously going way beyond that remit. An estimated three quarters is going to higher rate taxpayers.

In my (unelectable) world the tax threshold would be the same as the max benefit level and the same as your tax free pension accrual threshold. Using back of a fag packet economics this would be around £20k.

With a nod to Mamba/mrfp there would be no incentive to having more than 2 kids which would chip in a few quid into the kitty.

How is that estimated - eventually the tax gets paid when the pension is taken if there is substantially more than the state would have paid.

that is the cost to the taxman of people making tax contributions.

If you believe that we are living beyond our means then tough decisions need to be made. Alternatively if you think that debt does not matter then carry on with the champagne spending on a pepsi-cola wallet.

How about envisaging a surplus of £50bn per annum to start putting a dent in the outstanding debt. that would still take us 34 years to pay it off.

The cost how? Immediate, or long term?

wallace_and_gromit

Surrey Commuter wrote:

...but then more people are dependent on state handouts - why not let them keep their own money and not be dependent upon the state

It's a tricky one this! On balance I feel it is better to keep as many people paying income tax as possible so that they feel a greater attachment to/appreciation of the funding of public services and so that key direct taxation policy has an impact on them. Overall these should result in more rationale decision making by voters.

wallace_and_gromit

Surrey Commuter wrote:

The cost of tax breaks for pension savings is estimated at £48bn a year. The original goal was to encourage people to save so that they are not dependent on the state in old age. This number is so huge that it is obviously going way beyond that remit. An estimated three quarters is going to higher rate taxpayers.

In recent years, the trend has been to reduce the amount of pension contributions that be offset against income tax and the maximum size of pension pot. IIRC correctly, the maximum pot allowed tax free now is nowhere near big enough to buy the benefits that a typical middle/senior manager in a state scheme will enjoy after a full career.

Such tax relief is actually a good thing. As someone else observes, tax is paid when the pension is drawn, which is "guaranteed" income for a future government. If tax relief was reduced/abolished now then the incumbent government would most likely just p*ss it up on something for no long term benefit.

surrey_commuter

KingstonGraham wrote:

Surrey Commuter wrote:

KingstonGraham wrote:

Surrey Commuter wrote:

The cost of tax breaks for pension savings is estimated at £48bn a year. The original goal was to encourage people to save so that they are not dependent on the state in old age. This number is so huge that it is obviously going way beyond that remit. An estimated three quarters is going to higher rate taxpayers.

In my (unelectable) world the tax threshold would be the same as the max benefit level and the same as your tax free pension accrual threshold. Using back of a fag packet economics this would be around £20k.

With a nod to Mamba/mrfp there would be no incentive to having more than 2 kids which would chip in a few quid into the kitty.

How is that estimated - eventually the tax gets paid when the pension is taken if there is substantially more than the state would have paid.

that is the cost to the taxman of people making tax contributions.

If you believe that we are living beyond our means then tough decisions need to be made. Alternatively if you think that debt does not matter then carry on with the champagne spending on a pepsi-cola wallet.

How about envisaging a surplus of £50bn per annum to start putting a dent in the outstanding debt. that would still take us 34 years to pay it off.

The cost how? Immediate, or long term?

current annual cost... as always with pensions it is complicated but this explains it well

http://www.cps.org.uk/publications/repo ... -reformed/

surrey_commuter

Wallace and Gromit wrote:

Surrey Commuter wrote:

The cost of tax breaks for pension savings is estimated at £48bn a year. The original goal was to encourage people to save so that they are not dependent on the state in old age. This number is so huge that it is obviously going way beyond that remit. An estimated three quarters is going to higher rate taxpayers.

In recent years, the trend has been to reduce the amount of pension contributions that be offset against income tax and the maximum size of pension pot. IIRC correctly, the maximum pot allowed tax free now is nowhere near big enough to buy the benefits that a typical middle/senior manager in a state scheme will enjoy after a full career.

Such tax relief is actually a good thing. As someone else observes, tax is paid when the pension is drawn, which is "guaranteed" income for a future government. If tax relief was reduced/abolished now then the incumbent government would most likely just p*ss it up on something for no long term benefit.

Guess what my solution to that is.

I don't understand what you are trying to say - I am reading it as "we should give people a tax break now so that they can pay us tax in the future" you will have to explain what you really mean.

kingstongraham

Wallace and Gromit wrote:

Surrey Commuter wrote:

The cost of tax breaks for pension savings is estimated at £48bn a year. The original goal was to encourage people to save so that they are not dependent on the state in old age. This number is so huge that it is obviously going way beyond that remit. An estimated three quarters is going to higher rate taxpayers.

In recent years, the trend has been to reduce the amount of pension contributions that be offset against income tax and the maximum size of pension pot. IIRC correctly, the maximum pot allowed tax free now is nowhere near big enough to buy the benefits that a typical middle/senior manager in a state scheme will enjoy after a full career.

Such tax relief is actually a good thing. As someone else observes, tax is paid when the pension is drawn, which is "guaranteed" income for a future government. If tax relief was reduced/abolished now then the incumbent government would most likely just p*ss it up on something for no long term benefit.

It is £40,000 or 100% of salary in a year can be offset, and a max pot of £1million. That would buy you about a £30,000 annuity rising with inflation.

kingstongraham

Surrey Commuter wrote:

I don't understand what you are trying to say - I am reading it as "we should give people a tax break now so that they can pay us tax in the future" you will have to explain what you really mean.

There's a time in the future when I will not be earning money. If I forego some of my earnings now, and agree to lock them away so I can receive them later in life, I don't pay tax on it now, I pay tax when I receive the money. The tax break comes because I would have paid 40% on it now, but probably only pay basic rate when it comes out of the pension. Then I am not relying on the taxpayer to look after me when I can't earn any more, and because the money is somewhere I can't touch it, I can't spend it now on holidays.

The pensions reforms kind of unravel this a bit, as does the tax free lump sum. Also, if you want people to spend more now and let the future worry about itself (which does seem to be current thinking), you don't want to incentivise pension saving.

wallace_and_gromit

Surrey Commuter wrote:

I don't understand what you are trying to say - I am reading it as "we should give people a tax break now so that they can pay us tax in the future" you will have to explain what you really mean.

You spotted my somewhat unintentional circularity!

But seriously, saving for retirement, whoever does it, is a good thing. Whilst the majority does go to higher rate tax payers, it's not like they're going to be swanning around on private yachts in their retirement. And as has been observed, a lot of the tax breaks come back in the future. The issue is more one of governments looking at ways for a quick fix without doing what really needs doing (embedding a culture of rising taxes for everyone to pay pensions and health costs) rather than one of fairness.