2/3 Back to my original point: I am sure that your analysis of the relative proportionate tax burden borne by the rich on their salaries is correct.
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3/3 I also suspect (but stand to be corrected) that many rely on additional sources of income, and that they pay proportionately less tax on these other sources than salaried taxpayers do. Hence the perception that the total burden on middle income taxpayers is disproportionately high in comparison.
aug 25, 2025, 12:00 pm • 0 0 • view
I think what you are getting at in a round about way is that taxes on capital are (a bit) lower than taxes on income. This is indisputably true but also…that’s good. Pretty much every economic model including the ones eg the OBR uses will say higher taxes on productive capital (ie not housing) ..
aug 25, 2025, 12:06 pm • 0 0 • view
That may be true. I'm not proposing a fix. I made my original comment because I felt that suggesting that 'rising inequality is simply a brainworm' may not stand up when considered in the context of the tax burden on rich person's total income, rather than just the salaried component.
aug 25, 2025, 12:16 pm • 0 0 • view
Right but as I have shown we actually have pretty good data dutifully collected by the government on this stuff. Your objection is basically just vibes. People feel that because the world isn’t getting better due to low growth it must be the rich to blame somehow.
aug 25, 2025, 12:27 pm • 0 0 • view
...And if I may: I'm not against people being rich. I don't like rich people not paying their proportionate share on the money people earn that is available personally for them to spend, regardless of source. And overall, the rich need to demonstrate that they pay their proportionate share.
aug 25, 2025, 4:10 pm • 0 0 • view
But the rich do pay their fair share and then some! This is adequately demonstrated in the tax data where the top 1% pay 22% of income tax and the top ten % pay 62% of all income taxes and 85% of all CGT.
aug 25, 2025, 4:12 pm • 0 0 • view
Those big gross numbers are impressive. But again, what percentage do they pay as a proportion of the money they take home each year? (again, not just salaried income).
aug 25, 2025, 4:19 pm • 0 0 • view
Those numbers don’t really exist because taxation of assets is lumpy and increases in asset value is not ‘income’. The income taxes stats include all taxable income like dividends and not only salaries.
aug 25, 2025, 4:22 pm • 0 0 • view
Yes, but rich people seem to be able to keep more of the money they take home than poor, even if they pay a higher salary tax. If we're talking other taxes, we can look at total effective tax rates. The poorest 10% pay an effective 48% tax rate; the richest? 39%. equalitytrust.org.uk/news/press-r...
aug 25, 2025, 4:28 pm • 0 0 • view
For people with very low incomes it’s basically dominated by council tax which is actually regressive. But it’s a v hard group to measure since (1) people in the bottom 10% are not static and that group has huge churn year on year (2) quite a few of the people in that group are homeowners.
aug 25, 2025, 4:32 pm • 0 0 • view
They pay a much higher proportion of the taxes than they take in income share. The UK tax system really is effectively taxing the rich and really is among the most progressive tax systems in Europe.
aug 25, 2025, 4:13 pm • 0 0 • view
No argument from me there. If we are talking about salaried income.
aug 25, 2025, 4:22 pm • 0 0 • view
It includes all taxable income subject to income taxes: eg dividends etc. what is not included is increases in wealth caused by asset values increasing (which is subject to CGT).
aug 25, 2025, 4:24 pm • 0 0 • view
Subject to tax…….
aug 25, 2025, 4:32 pm • 0 0 • view
A little more than just vibes, I think. There is plentiful evidence that the true marginal tax rates on incomes for the very rich are low, and lower than for salaried income. My point, I think, still stands: your 'brainworm' contention needs to be justified against total income, not just salaries.
aug 25, 2025, 4:06 pm • 0 0 • view
But we can see the capital gains and stamp duty returns from wealth people. And they are high! Rich people really do pay a lot of tax and much of the ‘evidence’ you cite is just people misunderstanding the tax system and the important economic differences between taxing assets vs income.
aug 25, 2025, 4:09 pm • 0 0 • view
I'm sure they do pay a lot. But do they pay a lot in proportion to their income? And you can argue assets vs income: it is about the amount of money people take home to spend at the end of the month / year. If I take home more, I should pay (at least) the same proportion of tax as others.
aug 25, 2025, 4:12 pm • 0 0 • view
The top 10% get about 25% of gross income and pay 62% of income taxes. So they pay about twice as large a share of their income as the other 90% on average.
aug 25, 2025, 4:14 pm • 0 0 • view
This gross income. Do you mean gross salaried income? Or all monies flowing into a rich person's bank account?
aug 25, 2025, 4:21 pm • 0 0 • view
Gross income means pre tax income.
aug 25, 2025, 4:22 pm • 0 0 • view
.. reduce investment and productivity. I think a case could easily be made that high taxes on capital is part of the reason why the uk suffers from sluggish productivity growth. Not going to make that case today but I will ask: if lower capital taxes led to us style productivity, about 1/3 higher..
aug 25, 2025, 12:06 pm • 0 0 • view
.. would the increased inequality be a fair trade for a ~1/3 rise in the median wage? (Not saying that is the trade off numerically but it will be in that vein as a trade off).
aug 25, 2025, 12:06 pm • 0 0 • view