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High tax rates are what causes this. You are effectively giving away half your wage to sustain a completely unknown person leeching off the government.

deleted 6y ago
[deleted]
messe 6y ago
This is blatantly false. Income tax on higher earners in the UK has decreased since the 1970s/1980s when IIRC the highest tax bands were over 70%, if not higher.
- luckylion 6y ago
  Have they fallen generally, or has the highest tax band fallen? Germany had the highest tax rate > 50%, it's now 42/45%. At the same time, the income required to be taxed at that rate hasn't changed with inflation, so while it was e.g. 52.152€ in 2002, it's 57.051€ now - adjusted for inflation, it would have to be closer to 75k€. Lowering the top marginal tax while not adjusting for inflation so more people get pushed into higher tax brackets from below is great if you're rich, but shit if you're not.
  - ulfw 6y ago
    Erm it's also not great when you're rich. Either way you're being taxed more year by year (in adjusted inflation euros)
    - luckylion 6y ago
      If you're going from 70% to 50% (or from 57% to 45%), I'd say that's pretty great.
  - iso1631 6y ago
    90%ile now is £55k a year and gives you £40,543.60 net. £55k today is £32,461 in 2000. In 2000 someone on £32,461 had a take home pay of £24,080 -- the equivalent of £40,800 today. So not much change.
- zpeti 6y ago
  Yet in the UK the amount of tax paid by the 1% is the highest ever (34%), 42% of adults pay NO income tax. And the tax take as a proportion of GDP is 34.4%, the highest EVER. We are living in the most taxed time in history with the rich contributing the most ever. Not the impression you get from people complaining about it. https://www.theguardian.com/business/2019/nov/13/richest-britain-income-tax-revenues-institute-fiscal-studies https://www.theguardian.com/business/2019/nov/13/richest-bri...
  - zpeti 6y ago
    4 downvotes so far after quoting uncomfortable truths from the guardian. Thanks HN.
  - throwaway2048 6y ago
    Its the highest ever because the 1% are correspondingly much richer than ever.
  - tdesilva 6y ago
    Your article doesn't directly talk about the tax rate for the top 1%. The fact that the percentage of total tax collected attributed to the top 1% has risen from 24% to 30% seems to be more indicative of higher wealth inequality, especially if the figures the other posters have mentioned about lower total tax rates on the rich are true. To me that's a good reason to raise taxes on top earners and lower taxes on the middle class.
    - zpeti 6y ago
      How do you include record adults not paying taxes in that then, along with record employment? Do you want everyone paying more, and the poor paying tax as well, or more income inequality but less people paying tax? You can’t have both.
  - AngryData 6y ago
    When you make most of the money, you pay most of the taxes. You can't squeeze blood from a stone. 10% of a billion dollars is a lot more money than 50% of $100,000.
durron 6y ago
At least in the US, this isn't true, tax rates have fallen over the last 40 years https://taxfoundation.org/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-brackets/ https://taxfoundation.org/us-federal-individual-income-tax-r...
- qwerty1234599 6y ago
  Talking about Europe here
  - bleppoblepis 6y ago
    What makes Europe unique such that the proposition that lowered taxes would lead to greater Millenial success holds true, when the same low-tax policies applied in America seem to have yielded similar results to the European approach? If this seems like a leading question, it's not intended to be--I'm American and curious about the potential variables at play here that I'm not aware of.
    - LoSboccacc 6y ago
      the European market is a disaster for investment and entrepreneurship, that's what's holding millennial back. your average SMB reach is often regional, and the bureaucracy structure makes almost impossible for garage operations not only to go above national, but to even exist. like in sports, the size of the talent pool matters, and with an unbearable cost for entry entrepreneurship almost s losing proposition unless if under the heels of some financing partner whims, as it's the only realistic option to sustain the bottom line costs from handling vatmoss, letters of taxations and the other billion historical bureaucratic commitments
      - tubularhells 6y ago
        The bureaucracy part is not true in the Netherlands. Making a business and administering is easy here. In Germany, it's a nightmare.
markus92 6y ago
You mean healthcare, roads, education and social security for when I lose my job due to COVID? Taxes are nothing new and have always been like that.
- NegativeLatency 6y ago
  Don’t forget military spending
  - saagarjha 6y ago
    That’s not an argument against taxes, that’s an argument for redistributing where our taxes go. I would suspect that a reduction in the tax rate would mean a less-than-proportional decrease in military spending, anyways, so it’s not clear lowering the tax rate would even help.
gambiting 6y ago
What an absolute load of tripe. I'd gladly pay even higher taxes than I do to make sure everyone has access to healthcare and benefits when they need them. "unknown person leeching off the government" is the attitude that just needs to die, it annoys me so much that people still believe this crap, any one of us can be this "unknown person" at some point.
- derg 6y ago
  right? and like something i've come to realize over the years is that there is a huge value add of having something just work that i don't think many people actually appreciate. I would absolutely love to pay more in taxes if it meant medicare for all so that if i get hit by a car while riding my bike someone can call 911 and i can go to a hospital and not worry about how much the ambulance costs, whether the doctor i see is "In Network" or not, and not have to figure out how much of whatever needs to be done is covered by the insurance and what the hospital is going to bill me for and whether I can actually afford that or if I need to go into insurmountable debt just to exist. life already sucks enough as it is, and is entirely too complex in so many aspects that no longer having the "can i afford to not die in an emergency" thought would be such a huge net plus for a huge majority of working americans.
- LoSboccacc 6y ago
  I'd pretty much prefer they'd go against evaders first. two reason: even if it's not as much as what you can tax out of the 99%, it does alleviate middle class pressure. second reason, middle class can't get savings any more. savings are essential for a wealth of reason, including starting a family, a business, investing in property or other people ideas. these are all essential for growing a solid economy long run. angel and VC money works as a surrogate but it goes only so far as it aligns with the 1% incentives; it burns as much as it elevates, maybe even more, and is more of a way to extract money from growing SMB instead of a way to build a wealthy middle class, as they only play for the exit.
slothtrop 6y ago
No, it isn't. Housing prices as they are are a product of supply and demand. Such that, regulations are preventing the building density required to meet unceasing demand propelled by immigration. Historically rate of taxes were not much different than they are now, whether for North America or the UK.
- snidane 6y ago
  Housing prices increasing because of slow zoning and regulations has been debunked already. Typical argument used by property developers. The reality is that building houses for investment is more profitable for developers so they keep building it. As opposed to affordable housing actually used for living. The result is a glut of luxury investment apartments and lack of affordable nonluxury housing.
  - slothtrop 6y ago
    No, they just can't build enough. It's not as though building high-rise condos and houses is mutually exclusive. In Japan, houses don't really appreciate. People just knock them down and build new ones with much more ease. There's certainly no shortage of developers wanting for "investment" apartments, it's not the deciding factor. The demand can actually be met there.
  - vertbhrtn 6y ago
    I'm not seeing that luxury investment housing, though. The newly built houses are usually +/- cheap junk at premium prices. At the same prices there's a low supply of 30-40 year old homes, but of a way way better quality. And in any case, new construction + available supply is nowhere near enough to meet the demand. What folks without 500k/year are doing I don't know.
ncallaway 6y ago
This statement is flat out false. Tax rates are significantly lower than they were in the past.
- throwaway0a5e 6y ago
  Rates and effective rates are too different things. Some states have zero income tax but the effective tax rate is often similiar because pretty much every interaction with government is self-funded with fees so the effective tax rate is much higher than the on paper tax rate. Conversely you can have a tax rate and then let people deduct everything under the sun getting a lower effective rate. Kind of like how if you income is below the EIC amount (which is definitively not ideal) in the US federal income tax exists on paper (I forget what the rate is) but the effective rate is zero, possibly negative even)
iso1631 6y ago
In the UK a 90% income is £55k gross. Net wage on that is £40,543, so that's 26% tax. Local taxes would be about £1200 a year (council tax - a property based tax), so call is £39k -- 29% total tax. In the US a 90% income is $117k gross. Take home pay is 88,866, or 24% tax, that's after Federal Income Tax and Social security On top of that there's local income tax, picking a random state -- New Mexico -- that's $4,856, leaving about $83k -- 29% total tax. So seems that UK and US taxes are about the same, but in the US you have to fund your own healthcare.
triceratops 6y ago
Lowering taxes will just cause inflation.

deleted 6y ago

[deleted]

messe 6y ago

This is blatantly false. Income tax on higher earners in the UK has decreased since the 1970s/1980s when IIRC the highest tax bands were over 70%, if not higher.

luckylion 6y ago
Have they fallen generally, or has the highest tax band fallen? Germany had the highest tax rate > 50%, it's now 42/45%. At the same time, the income required to be taxed at that rate hasn't changed with inflation, so while it was e.g. 52.152€ in 2002, it's 57.051€ now - adjusted for inflation, it would have to be closer to 75k€. Lowering the top marginal tax while not adjusting for inflation so more people get pushed into higher tax brackets from below is great if you're rich, but shit if you're not.
- ulfw 6y ago
  Erm it's also not great when you're rich. Either way you're being taxed more year by year (in adjusted inflation euros)
  - luckylion 6y ago
    If you're going from 70% to 50% (or from 57% to 45%), I'd say that's pretty great.
- iso1631 6y ago
  90%ile now is £55k a year and gives you £40,543.60 net. £55k today is £32,461 in 2000. In 2000 someone on £32,461 had a take home pay of £24,080 -- the equivalent of £40,800 today. So not much change.
zpeti 6y ago
Yet in the UK the amount of tax paid by the 1% is the highest ever (34%), 42% of adults pay NO income tax. And the tax take as a proportion of GDP is 34.4%, the highest EVER. We are living in the most taxed time in history with the rich contributing the most ever. Not the impression you get from people complaining about it. https://www.theguardian.com/business/2019/nov/13/richest-britain-income-tax-revenues-institute-fiscal-studies https://www.theguardian.com/business/2019/nov/13/richest-bri...
- zpeti 6y ago
  4 downvotes so far after quoting uncomfortable truths from the guardian. Thanks HN.
- throwaway2048 6y ago
  Its the highest ever because the 1% are correspondingly much richer than ever.
- tdesilva 6y ago
  Your article doesn't directly talk about the tax rate for the top 1%. The fact that the percentage of total tax collected attributed to the top 1% has risen from 24% to 30% seems to be more indicative of higher wealth inequality, especially if the figures the other posters have mentioned about lower total tax rates on the rich are true. To me that's a good reason to raise taxes on top earners and lower taxes on the middle class.
  - zpeti 6y ago
    How do you include record adults not paying taxes in that then, along with record employment? Do you want everyone paying more, and the poor paying tax as well, or more income inequality but less people paying tax? You can’t have both.
- AngryData 6y ago
  When you make most of the money, you pay most of the taxes. You can't squeeze blood from a stone. 10% of a billion dollars is a lot more money than 50% of $100,000.

durron 6y ago

At least in the US, this isn't true, tax rates have fallen over the last 40 years https://taxfoundation.org/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-brackets/ https://taxfoundation.org/us-federal-individual-income-tax-r...

qwerty1234599 6y ago
Talking about Europe here
- bleppoblepis 6y ago
  What makes Europe unique such that the proposition that lowered taxes would lead to greater Millenial success holds true, when the same low-tax policies applied in America seem to have yielded similar results to the European approach? If this seems like a leading question, it's not intended to be--I'm American and curious about the potential variables at play here that I'm not aware of.
  - LoSboccacc 6y ago
    the European market is a disaster for investment and entrepreneurship, that's what's holding millennial back. your average SMB reach is often regional, and the bureaucracy structure makes almost impossible for garage operations not only to go above national, but to even exist. like in sports, the size of the talent pool matters, and with an unbearable cost for entry entrepreneurship almost s losing proposition unless if under the heels of some financing partner whims, as it's the only realistic option to sustain the bottom line costs from handling vatmoss, letters of taxations and the other billion historical bureaucratic commitments
    - tubularhells 6y ago
      The bureaucracy part is not true in the Netherlands. Making a business and administering is easy here. In Germany, it's a nightmare.

markus92 6y ago

You mean healthcare, roads, education and social security for when I lose my job due to COVID? Taxes are nothing new and have always been like that.

NegativeLatency 6y ago
Don’t forget military spending
- saagarjha 6y ago
  That’s not an argument against taxes, that’s an argument for redistributing where our taxes go. I would suspect that a reduction in the tax rate would mean a less-than-proportional decrease in military spending, anyways, so it’s not clear lowering the tax rate would even help.

gambiting 6y ago

What an absolute load of tripe. I'd gladly pay even higher taxes than I do to make sure everyone has access to healthcare and benefits when they need them. "unknown person leeching off the government" is the attitude that just needs to die, it annoys me so much that people still believe this crap, any one of us can be this "unknown person" at some point.

derg 6y ago
right? and like something i've come to realize over the years is that there is a huge value add of having something just work that i don't think many people actually appreciate. I would absolutely love to pay more in taxes if it meant medicare for all so that if i get hit by a car while riding my bike someone can call 911 and i can go to a hospital and not worry about how much the ambulance costs, whether the doctor i see is "In Network" or not, and not have to figure out how much of whatever needs to be done is covered by the insurance and what the hospital is going to bill me for and whether I can actually afford that or if I need to go into insurmountable debt just to exist. life already sucks enough as it is, and is entirely too complex in so many aspects that no longer having the "can i afford to not die in an emergency" thought would be such a huge net plus for a huge majority of working americans.
LoSboccacc 6y ago
I'd pretty much prefer they'd go against evaders first. two reason: even if it's not as much as what you can tax out of the 99%, it does alleviate middle class pressure. second reason, middle class can't get savings any more. savings are essential for a wealth of reason, including starting a family, a business, investing in property or other people ideas. these are all essential for growing a solid economy long run. angel and VC money works as a surrogate but it goes only so far as it aligns with the 1% incentives; it burns as much as it elevates, maybe even more, and is more of a way to extract money from growing SMB instead of a way to build a wealthy middle class, as they only play for the exit.

slothtrop 6y ago

No, it isn't. Housing prices as they are are a product of supply and demand. Such that, regulations are preventing the building density required to meet unceasing demand propelled by immigration. Historically rate of taxes were not much different than they are now, whether for North America or the UK.

snidane 6y ago
Housing prices increasing because of slow zoning and regulations has been debunked already. Typical argument used by property developers. The reality is that building houses for investment is more profitable for developers so they keep building it. As opposed to affordable housing actually used for living. The result is a glut of luxury investment apartments and lack of affordable nonluxury housing.
- slothtrop 6y ago
  No, they just can't build enough. It's not as though building high-rise condos and houses is mutually exclusive. In Japan, houses don't really appreciate. People just knock them down and build new ones with much more ease. There's certainly no shortage of developers wanting for "investment" apartments, it's not the deciding factor. The demand can actually be met there.
- vertbhrtn 6y ago
  I'm not seeing that luxury investment housing, though. The newly built houses are usually +/- cheap junk at premium prices. At the same prices there's a low supply of 30-40 year old homes, but of a way way better quality. And in any case, new construction + available supply is nowhere near enough to meet the demand. What folks without 500k/year are doing I don't know.

ncallaway 6y ago

This statement is flat out false. Tax rates are significantly lower than they were in the past.

throwaway0a5e 6y ago
Rates and effective rates are too different things. Some states have zero income tax but the effective tax rate is often similiar because pretty much every interaction with government is self-funded with fees so the effective tax rate is much higher than the on paper tax rate. Conversely you can have a tax rate and then let people deduct everything under the sun getting a lower effective rate. Kind of like how if you income is below the EIC amount (which is definitively not ideal) in the US federal income tax exists on paper (I forget what the rate is) but the effective rate is zero, possibly negative even)

iso1631 6y ago

In the UK a 90% income is £55k gross. Net wage on that is £40,543, so that's 26% tax. Local taxes would be about £1200 a year (council tax - a property based tax), so call is £39k -- 29% total tax. In the US a 90% income is $117k gross. Take home pay is 88,866, or 24% tax, that's after Federal Income Tax and Social security On top of that there's local income tax, picking a random state -- New Mexico -- that's $4,856, leaving about $83k -- 29% total tax. So seems that UK and US taxes are about the same, but in the US you have to fund your own healthcare.

triceratops 6y ago

Lowering taxes will just cause inflation.