Comment by alias_neo
9 days ago
> Having UK work experience and having talked to thousands of british folks over a decade, I find this hard to believe
I only have to look as far as my own wallet to see the effects. I'm being taxed to the eyeballs while there is a glass ceiling preventing me taking any more pay home without a major jump which just isn't coming due to stupid tax rules keeping the working class from bumping into the middle class.
I see mine and my family's living standards drop only to be told by the news that I'm a likely target for more tax hikes, and there's just no room to tax me more while my bills have also gone up significantly, and something will have to give. If it gets to the point where I can't pay my bills despite being a "high earner" I'll have to start considering whether I leave with my family, and where to.
I'm not exactly the milky bar kid, but I imagine beyond my friends and family, I imagine the consensus would be very much the same, yet there goes two "successful" professionals and the children we were raising probably to be high earning professionals too.
I don't do social media, but I do keep on top of the news from all outlets, I try to look beyond the biases and form an opinion on a combination of sources.
I left in 2010 and the consensus is very much the same among my friends, or at least some of them anyway.
I’m no longer eligible to have an opinion UK or local conversations. “how would you know”, “the city’s changed a lot since you left”, “why are people who chose to leave so interested in X”, statements specific to ex-pats.
For those from outside the UK, ex-pat (expatriate) as a singular term is almost always derogatory regardless of context or publisher.
I believe the issue people have with the term ex-pat is that it sounds like a fart-sniffing variation of "migrant" (or the derivatives "emigrant" or "immigrant").
It's kind of wild how people can't accept that anyone would want to leave the UK, plenty of people come here, they're leaving other places, so this must be the best place in the world.
If you don't like it you must be foreign; I'm not, I was born and raised in England to British parents. Nowhere did I say I was even planning to leave, I merely suggested that if things got worse I might have to consider it, and I was jumped on for that.
Things ARE getting worse, but I'm not at that point yet, maybe we'll have a miraculous turn around and our public services will improve and our economy will grow, I'm not even asking for it to be sunny for 3 months of the year, but if they don't, am I just supposed to sit here on a sinking ship with my children next to me?
And let's be real, it's not even about me at this point, it's about what is and what will be for my children, I've worked hard to give them a better life than I had as a kid, and I'll be damned if I don't do it.
> earn a penny more
That is not how marginal tax rates work. Each income band is taxed at the rate for that band. It’s why it’s called “marginal” - because the rate change happens at the margin between brackets.
You are taxed 0% on your first £12571. You are taxed 20% on your next £37669, or, £7359.80 on £50270 of income. If you then earned one more pound, or £50271, you would owe £0.40 (40%) on that one additional pound only, for a total of £7361.20. There is no income stage where earning more money has you taking home less.
> There is no income stage where earning more money has you taking home less
If you go from £99,999 to £100,000 and have pre-school aged children, you lose £2000 in tax-free childcare per child. If you have 2 children, that extra penny cost you £4000, 3 children, £6000, you take home less, fact.
Combined with the 60% marginal rate, you now have to get to £110,000 just earn the same you did at £99,999 and then there's the side point that a couple can earn £99,999 each, or £198,999.98 and still benefit from it while any single parent who hits £100,000 loses it completely, so a single parent high earner loses out vs a couple. I'm not a single parent but that doesn't seem reasonable to me.
EDIT: and that person who hit £100,000 has the extra burden of having to file a tax return from now on simply because they hit an arbitrary number, and despite being on PAYE, though perhaps some people love doing tax returns, so not necessarily a negative point.
https://www.gov.uk/tax-free-childcare
> If you go from £99,999 to £100,000
That's not where I would say the line between working class and middle class should be drawn.
> There is no income stage where earning more money has you taking home less.
there are several
there's one at around 50k (where child benefit is removed) and another at 100k (where childcare vouchers are removed)
Yes exactly at 100k you lose free childcare. It’s not a taper you lose the whole thing.
Here’s an explanation of the figures:
https://www.thetimes.com/business-money/money/article/high-i...
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Annoying that those are, it’s probably more accurate to say you don’t qualify for benefits when you earn considerably more than the median wage (£38k).
Also, if you’re paying a decent amount in to your pension your effective salary is lowered and won’t hit that child benefit threshold until your salary exceeds £60k or more, and you still get to keep all of that money.
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It's a classic result of step functions, which are popular in tax codes and regulations.
For example, if you pollute 99 ppm, then you're good. If you pollute 100 ppm, you're bad.
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Don't quote me but I don't think this is quite true if you take tax credits and other "benefits" into account - especially when it comes to child support.
That is only true of income tax. Not all taxes are marginal, and several have thresholds that behave exactly as the OP described.
The people arguing only seem to care about income tax and NI, ignoring that other taxes exist at almost every level on your money.
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> taxed to the eyeballs
Emotional phrases aside, what is your total NI + income tax deduction percentage, and what percentage do you think you should be paying?
The problem isn't the percentage, it's that there are tax traps where earning a single penny more end up in you taking home thousands less, then you hit a marginal tax bands of 60%+, and suddenly you have to earn tens of thousands more just to break even.
They're well known an documented, but I'm sure you know that already.
Can you provide an example for others? I know I often hear this complaint here in Canada about entering a new tax bracket, but the reality is that only the money earned above the bracket's lower bound is taxed at that higher rate (if the bracket is $10k and you make $10,001, only that $1 is taxed at that higher brackets rate), and so I'm wondering what the UK is doing differently.
Edit: Ah, there's a baseline personal deduction (12.5k) that disappears between 100-125k, meaning, for that narrow band, every dollar earned in that range has a higher effective tax rate due to that deduction slowly disappearing. It's still progressive, so you don't suddenly start paying 60% tax on everything.
https://www.brewin.co.uk/insights/earn-over-100k-beware-the-...
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That jump in childcare costs definitely sounds annoying but if the overall percentage isn't very high then you're not being taxed to the eyeballs.
We could imagine fixing the problem by making the childcare voucher phase out between 80k and 100k, and at 100.2k you'd get exactly the same amount as you get under the current system.
In this hypothetical would you still say taxed to the eyeballs? If so, what would your justification be?
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Can't help but noticed that you didn't answer the question. It's so good: https://news.ycombinator.com/item?id=44712327
[flagged]
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That is not how marginal tax works. Marginal tax is… uh… tax on the marginal part?
It is funny you say these are well known and documented, yet provide no links or sources.
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I'm not familiar with the UK tax system but the usual solution is to have progressive (?) tax bands. Example:
On the part from 0 to 1000, no taxes
1001 to 10000, ten percent
10001 to 20000, twenty percent
20000 to 30000, thirty percent
30001 and more, forty percent
So if you were earning 29000 and get a raise to 31000 those 29000 are still taxed as they used to and the extra 2000 are split among the two bands around 30k.
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I just need to say that this is such a great question. Everyone is going to apply their own idea of "to the eyeballs" unless and until it is defined.
I did answer the question, you just didn't like the answer.
The truth is I don't know the exact numbers but it's not relevant to my point, as I've tried to point out elsewhere.
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What does "not exactly the milky bar kid" mean? That you're not white or set for life?