May's "ordinary working people"?

[oddoneout]

[QUOTE=ahinton;610350
Yes, the terms do need changing. Get rid of "National Insurance Contributions" for starters and be honest and call them "tax"; indeed, merging the two 9which has been considered in the past but never actually done) would itself save the state - i.e. all of us - a fortune in itself.[/QUOTE]
Would make the tax rates look pretty horrific, which is perhaps why the separation continues?

[Serial_Apologist]

Many Sub Contractors in the construction industry have tax deducted at source.

https://www.gov.uk/what-you-must-do-...ack-deductions

I'm rather hoping that Ian Thumwood will have something to contribute to this discussion, given that he works, I believe, in Construction as a qualified Civil Engineer? (One of those grey-suited blokes one sees walking about building sites wearing a yellow tin hat and hi-visi jacket (these days), carrying a clipboard).

[cloughie]

Would make the tax rates look pretty horrific, which is perhaps why the separation continues?

I think there are more than a few pensioners who having paid NI contributions during their working life would not favour merging NI with IT.

[ahinton]

Would make the tax rates look pretty horrific, which is perhaps why the separation continues?

Well, it would indeed have that effect but I do think that most taxpayers can add up and are capable of working out the percentage of their profits that goes in taxes - i.e. income tax + NIC!

[ahinton]

I think there are more than a few pensioners who having paid NI contributions during their working life would not favour merging NI with IT.

That would of course be true but could easily be resolved by increasing personal tax allowances for those of state retirement age and above so as not to penalise them with higher tax rates because of the merger.

[teamsaint]

I think there are more than a few pensioners who having paid NI contributions during their working life would not favour merging NI with IT.

A harmonised rate could easily be much more graduated than the current system, ( along with reformed personal allowances) to make it fairer on those with more moderate incomes, including pensioners at the lower end of income.

We really do need a simpler system, to help avoid , er, avoidance, and to introduce more transparency and fairness.

We may be some time waiting though......

Edit: I have never understood why much more graduated tax bands are a problem. When calculations were manual, ( before HMRC had computers) multiple rate bands were a right pain to calculate and collect.
Theses days they should be a doddle, and in fact an aid to fairer taxation.

[ahinton]

Thank you for your comments which I found interesting.

We have always had different opinions on these matters.

Thank you. I don't claim to be right about these things, though, any more than I imagine that you do, but I'd be interested in your take on a few things here, specifically
(a) what "insurance" (in the sense in which that term is otherwise understood in the insurance market) do you believe that the NIC system provides, especially as the "National Insurance Fund" is little more than mythical and the monies paid in premiums - sorry, "contributions" are not invested but paid out in state benefits various to others within a relatively short time of their receipt? and
(b) how might you equate the use of the term "pension" to cover state retirement benefit when it is clearly a very different animal altogether to any other form of pension, employers', personal or otherwise?
Even the term "state retirement benefit" is somewhat misleading in that increasing numbers of people in receipt of it are not actually retired.

[teamsaint]

Well, it would indeed have that effect but I do think that most taxpayers can add up and are capable of working out the percentage of their profits that goes in taxes - i.e. income tax + NIC!

But I suspect many people don't realise that very high earners stop paying NICs above whatever it is, round about £50K PA

[ahinton]

But I suspect many people don't realise that very high earners stop paying NICs above whatever it is, round about £50K PA

Not true in the case of NIC4, rates for which are shown on the Government website as

Class Rate for tax year 2016 to 2017
Class 2 £2.80 a week
Class 4 9% on profits between £8,060 and £43,000
2% on profits over £43,000

i.e. no upper limit, just as with income tax.

[Lat-Literal]

Thank you. I don't claim to be right about these things, though, any more than I imagine that you do, but I'd be interested in your take on a few things here, specifically
(a) what "insurance" (in the sense in which that term is otherwise understood in the insurance market) do you believe that the NIC system provides, especially as the "National Insurance Fund" is little more than mythical and the monies paid in premiums - sorry, "contributions" are not invested but paid out in state benefits various to others within a relatively short time of their receipt? and
(b) how might you equate the use of the term "pension" to cover state retirement benefit when it is clearly a very different animal altogether to any other form of pension, employers', personal or otherwise?
Even the term "state retirement benefit" is somewhat misleading in that increasing numbers of people in receipt of it are not actually retired.

On (a), when the Liberals introduced the National Insurance Act (not that long ago, my grandmother was 21) it was to provide insurance in the event of illness and unemployment. But my understanding is that there is an even more fundamental point. That NI and associated measures effectively marked the beginning of the end of an outlook where poverty equated to criminality. Ever since - and increasingly - the undercurrent of many a Katie Hopkins (not that most know it themselves - they are too in the present) is that in an "ideal" world we would return to that position. In any case the original outlook has remained in some ways in a real sense. It is always in inconsistent approaches (based on uncertainty) towards "dealing" with homeless people and the mentally ill and in the media obsessively seeking out people taking advantage of the system. To me, none of that is at all ideal.

"That's my money" dictates that these people should be "bad". For those who think history couldn't happen here, there were just 68 years between 1911 and 1979. If.....if......the latter was the pivotal point, then the workhouse is due for a return in just 30 years. So, yes, National Insurance is still not only financially but symbolically an insurance to some extent against that prospect. And those who wish to place it under tax - and reduce tax for ever more - are supporters and even managers of the workhouse just one step removed. I regret that I would see such arguments when they are put forward as Dickensianism for the Future. Given the blase ways now, there may already be a pamphlet with that title. Incidentally, Lloyd George nicked the idea off Bismarck and it is about as socialist as Bismarck so it isn't socialist. Anyone who says otherwise listens far too much to Fox News.

On (b), sorry, but I am genuinely not sure I understand the point you are making.

[teamsaint]

Not true in the case of NIC4, rates for which are shown on the Government website as

Class Rate for tax year 2016 to 2017
Class 2 £2.80 a week
Class 4 9% on profits between £8,060 and £43,000
2% on profits over £43,000

i.e. no upper limit, just as with income tax.

Ok,you are right,
At 2 %
Big deal.

tell that to kids on £20k paying 40% deductions.

[ahinton]

Ok,you are right,
At 2 %
Big deal.

tell that to kids on £20k paying 40% deductions.

I didn't suggest that this is defensible, did I?!

[teamsaint]

I didn't suggest that this is defensible, did I?!

no.

[Dave2002]

I was very pleased to hear Mr Hammond being given a good kicking by Phil Robinson on R4 this morning on this very subject.

Do you mean Nick Robinson calling Mr P H "Spreadsheet Phil"?

[teamsaint]

Do you mean Nick Robinson calling Mr P H "Spreadsheet Phil"?

The rich man's friend ? Last I saw of him on the telly, he was telling is us all how well the tax man does out of rich people.