4 ms·

I can’t nor I want to deploy any grand theory, such as MMT. But if the triple lock were applied to nurses and doctors’ pay, instead of pensions, we would have o

by mmarq 4y ago

I can’t nor I want to deploy any grand theory, such as MMT. But if the triple lock were applied to nurses and doctors’ pay, instead of pensions, we would have one less problem. Or if instead of increasing NI to pay for social care (??), they had increased income tax, the burden would have been shared more evenly and wouldn’t be only on workers. Maybe introducing a property tax would have been even better, given that a pensioner owning his home outright is significantly richer than a young professional paying half his salary in rent. Then we have cuts in in-work benefits, such as child benefits. Since 2010, the UK has declared war on work and now everybody is wondering where productivity is. In the meanwhile everybody is busy talking about grand reforms, such as Scottish secession and leaving the EU.

denton-scratch 4y ago
> given that a pensioner owning his home outright is significantly richer than a young professional paying half his salary in rent. The young professional can upskill, or work harder, to cover increased income taxes. The pensioner is often unable to work; they're less likely to be fit, and their alertness may be fading. I'm 66, out of employment for 5 years, and I can't imagine enduring a 9-5 shift. I don't always sleep well, I often need a siesta, and I'm certain I'm much less sharp since I quit employment. My work-rate has fallen a lot. I don't have a pension as such; I live on the rent on my property. I worked for the money to buy that property; it's not inherited wealth that fell into my lap. My finances are planned around the rental income. If you start taxing my property, how am I supposed to pay? My only choice is to sell the property, reducing my rental income to zero, and rendering me a burden on the taxpayer.
- mmarq 4y ago
  Fact is poverty among the elderly is at the lowest since records began. If somebody is left behind, we can think of ad-hoc measures. It is insane to increase pensions by 11% and offer a 4% pay rise to nurses. The young professional worked hard to acquire his human capital, that is taxed way more than rental income. Also, salaries in the UK have increased much less than rents. Besides, properties are taxed everywhere in the world, especially if they are rented out, bar the UK.
  - denton-scratch 4y ago
    I pay tax on my rental income. I don't have a problem with my income being taxed. But if you try to tax my property, you take away my ability to generate income. I can't compensate by working harder, because I'm not fit to work 9-5. BTW: the term "human capital" is usually a euphemism for staff, isn't it? I'm not sure what it is that you think is taxed way more than rental income; my rental income is taxed as income, just as if it was salary from employment. So what is this heavily-taxed "human capital"?
    - CogitoCogito 4y ago
      > I pay tax on my rental income. I don't have a problem with my income being taxed. But if you try to tax my property, you take away my ability to generate income. I can't compensate by working harder, because I'm not fit to work 9-5. Can you get a reverse mortgage to sell back some of your equity to pay your taxes? Maybe this isn't a think in the UK but it very well could be. I mean if I held market equities and no cash and owed taxes, I don't think I'd get much sympathy not selling some to pay the taxes I owe. I'm not sure why real estate should be treated differently.
      - denton-scratch 4y ago
        Yes, that's an equity-release mortgage. It's not a "reverse" mortgage; it's just a mortgage that the lender doesn't expect you to pay off (so when you die, they get a stake in the your estate). I've thought a good bit about equity-release; I might be forced into it, if my health holds out longer than I've planned for. But I was taught never to use capital for current expenditure. I try to stick to that. Thing is, it seems wrong to tax the property of someone whose only income is rental from that same property. The only way they can pay the tax is to reduce their stake in the property, and so their ability to pay tax. It's a spiral that ends in disappropriation, and dependence on the state.
        CogitoCogito 4y ago
        > It's not a "reverse" mortgage; it's just a mortgage that the lender doesn't expect you to pay off (so when you die, they get a stake in the your estate). In the US it's commonly called a reverse mortgage. > I've thought a good bit about equity-release; I might be forced into it, if my health holds out longer than I've planned for. But I was taught never to use capital for current expenditure. I try to stick to that. > Thing is, it seems wrong to tax the property of someone whose only income is rental from that same property. The only way they can pay the tax is to reduce their stake in the property, and so their ability to pay tax. It's a spiral that ends in disappropriation, and dependence on the state. Sure I agree that you ideally don't want to draw down on your capital, but ideally you'd have the cash to pay the taxes. Going back to the case of equities, if your only income was in the form of dividends and you didn't have enough to pay taxes you owe, you'd need to sell stocks which would decrease future cash flow from dividends. I don't really see this as fundamentally different than other cases where you don't have enough income to grow your wealth after costs. E.g. when you go in to retirement. I mean it's nice if you have enough capital that you can fully live of off cash you derive from it (rentals, dividends, pensions, etc.), but if you can't then you gotta dip into your capital.

by mmarq 4y ago

denton-scratch 4y ago

> given that a pensioner owning his home outright is significantly richer than a young professional paying half his salary in rent. The young professional can upskill, or work harder, to cover increased income taxes. The pensioner is often unable to work; they're less likely to be fit, and their alertness may be fading. I'm 66, out of employment for 5 years, and I can't imagine enduring a 9-5 shift. I don't always sleep well, I often need a siesta, and I'm certain I'm much less sharp since I quit employment. My work-rate has fallen a lot. I don't have a pension as such; I live on the rent on my property. I worked for the money to buy that property; it's not inherited wealth that fell into my lap. My finances are planned around the rental income. If you start taxing my property, how am I supposed to pay? My only choice is to sell the property, reducing my rental income to zero, and rendering me a burden on the taxpayer.

mmarq 4y ago
Fact is poverty among the elderly is at the lowest since records began. If somebody is left behind, we can think of ad-hoc measures. It is insane to increase pensions by 11% and offer a 4% pay rise to nurses. The young professional worked hard to acquire his human capital, that is taxed way more than rental income. Also, salaries in the UK have increased much less than rents. Besides, properties are taxed everywhere in the world, especially if they are rented out, bar the UK.
- denton-scratch 4y ago
  I pay tax on my rental income. I don't have a problem with my income being taxed. But if you try to tax my property, you take away my ability to generate income. I can't compensate by working harder, because I'm not fit to work 9-5. BTW: the term "human capital" is usually a euphemism for staff, isn't it? I'm not sure what it is that you think is taxed way more than rental income; my rental income is taxed as income, just as if it was salary from employment. So what is this heavily-taxed "human capital"?
  - CogitoCogito 4y ago
    > I pay tax on my rental income. I don't have a problem with my income being taxed. But if you try to tax my property, you take away my ability to generate income. I can't compensate by working harder, because I'm not fit to work 9-5. Can you get a reverse mortgage to sell back some of your equity to pay your taxes? Maybe this isn't a think in the UK but it very well could be. I mean if I held market equities and no cash and owed taxes, I don't think I'd get much sympathy not selling some to pay the taxes I owe. I'm not sure why real estate should be treated differently.
    - denton-scratch 4y ago
      Yes, that's an equity-release mortgage. It's not a "reverse" mortgage; it's just a mortgage that the lender doesn't expect you to pay off (so when you die, they get a stake in the your estate). I've thought a good bit about equity-release; I might be forced into it, if my health holds out longer than I've planned for. But I was taught never to use capital for current expenditure. I try to stick to that. Thing is, it seems wrong to tax the property of someone whose only income is rental from that same property. The only way they can pay the tax is to reduce their stake in the property, and so their ability to pay tax. It's a spiral that ends in disappropriation, and dependence on the state.
      - CogitoCogito 4y ago
        > It's not a "reverse" mortgage; it's just a mortgage that the lender doesn't expect you to pay off (so when you die, they get a stake in the your estate). In the US it's commonly called a reverse mortgage. > I've thought a good bit about equity-release; I might be forced into it, if my health holds out longer than I've planned for. But I was taught never to use capital for current expenditure. I try to stick to that. > Thing is, it seems wrong to tax the property of someone whose only income is rental from that same property. The only way they can pay the tax is to reduce their stake in the property, and so their ability to pay tax. It's a spiral that ends in disappropriation, and dependence on the state. Sure I agree that you ideally don't want to draw down on your capital, but ideally you'd have the cash to pay the taxes. Going back to the case of equities, if your only income was in the form of dividends and you didn't have enough to pay taxes you owe, you'd need to sell stocks which would decrease future cash flow from dividends. I don't really see this as fundamentally different than other cases where you don't have enough income to grow your wealth after costs. E.g. when you go in to retirement. I mean it's nice if you have enough capital that you can fully live of off cash you derive from it (rentals, dividends, pensions, etc.), but if you can't then you gotta dip into your capital.