[ianch99]

Originally Posted by mrmistoffelees

It does not take earning tens of millions to get you taxed twice.

You could be earning 35k per year and get RSU’s in a startup and you’re getting hit for tax on the RSU’s NI AND employers NI

To answer your question re millionaire vs nurse
The millionaire has zero personal tax allowance and pays tax on every penny of their paye income at varying rates (so that’s 45% on 850k of their earnings)

A nurse earning £40k per year pays 0 zero tax on the first £12.5k and 20% on the rest


The millionaire has paid £382,500 JUST at the 45% level

Just how much do you want ????

You really are not listening here. I am not talking about PAYE earnings which a lot of high net worth individuals do not receive in meaningful terms. I know about RSU's, I get them and I pay an effective tax rate of over 50% on them. Again, I am not talking about the people who receive taxed at source income.

Here's an article that covers this problem: https://www.lse.ac.uk/research/resea...ich-really-pay

Where you get your money from (or at least how you package it) matters, because investment income and capital gains are taxed at lower rates than income from work

This survey was done in 2015-2016. The wealth inequality has increases markedly since then. So back to my point:

Using anonymised data from personal tax returns, we show that in 2015-16 the average rate of tax paid by people who received one million pounds in taxable income and gains was just 35 per cent: the same as someone earning £100,000. But one in four of these paid 45 per cent – close to the top rate – whilst another quarter paid less than 30 per cent overall. One in ten paid just 11 per cent—the same as someone earning £15,000. The rich, it seems, are not all in it together.

These low rates are not driven by complex tax avoidance schemes; they’re part of how our system is designed. Where you get your money from (or at least how you package it) matters, because investment income and capital gains are taxed at lower rates than income from work. What’s more, as the National Audit Office recently highlighted, the government offers tax reliefs claimed to incentivise activities like entrepreneurship, without actually checking whether they achieve these aims.

The fact that you return back to the PAYE use case means you are not looking at those who generate their wealth through other means, exactly as intended.

I will leave this point with you, again from the article above:

We published the final Wealth Tax Commission report in December 2020, with the recommendation that, if the government chooses to raise taxes as part of its response to the COVID-19 crisis, it should implement a one-off wealth tax in preference to increasing taxes on work or spending. A one-off wealth tax on millionaire couples paid at one per cent a year for five years, we found, would raise £260 billion.

and lastly, Rishi Sunak paid effective tax rate of 23% on £2.2m income in 2023, roughly the same as an average nurse earning £37,000. You would find this perfectly acceptable I presume?

Labour should commission a root & branch reform of the tax system for high net worth individuals and large corporates to make the playing field a bit more level.