Net tax contribution

[drossall]

I'm slightly baffled. Of course there's the question of corporate taxes and where they go, of how you measure benefit, and for that matter of what you mean by "average". However, the OP appears to be saying that the average person receives roughly the same in benefit from government services as that person pays in taxes. Which sounds kind of right. People on the poorer end should get more benefits than they pay in taxes. People on the richer end should pay more in taxes than they get in benefits. For people in the middle it works out kind of even. Otherwise, either you've got money appearing from nowhere to fund government services, or money disappearing into a black hole and never being used.

A bit simplistic (actually enormously so), but basically this thread seems to say that "average people are average"

[pete75]

This shows the effects of tax and benefits on various income groups.

[RickH]

From your salary, 20 to 40% goes in income tax, a further 5% in NI contributions, when you spend it 20% goes on vat then when you die 40% goes on death duties. This leaves between 15% and -5% to pass on to your heirs or charities.
The state wins in the end.

And I didn't factor in stealth taxes, such as council tax, fuel duty, new car levy, TV licence for some of us,

And you didn't allow for (although I note the s) the fact that the first £350,000 is exempt from inheritance tax (&, under various circumstances, that can effectively rise to £950,000 - link). Neither did you factor in the tax free allowances on income (£12,500 for 2019-20) or savings (first £1,000 of interest - according to an article I was reading at the weekend, you'd need over £66,000 in a 1.5% interest account to reach that limit).

A raft of things are VAT free (food, children's clothes) or low rated (gas & electricity).

You can also give chunks of your income tax away to good causes (however you might personally define those) by signing up for Gift Aid, where charities get the tax you have already paid on the money you give to them.

[belgiangoth]

I read an article a few years ago that posited that an average person, who'd earned the average wage, with the average number of kids, average illnesses, average age of death etc was only just a net contributor to the tax system. I wonder how many of us actually are net contributors?

Like many things I suspect this raises the question as to how the numbers are counted. At the moment I will be a net drain as I have three kids in school (costing the taxpayer approx 15k) but in in 30 years I will have three kids earning and contributing; vs my DINKY friends who claim nothing now but will only be drawing out from the system in 30 years time.

[belgiangoth]

In this question l think only the financial aspect can be counted, everything else is too subjective.

True. However a societal issue we have is that we CAN count money, we CAN'T count other things, so we ONLY count money and ONLY do what the counted money suggests. This is clearly simpler, but also wrong.

[Cugel]

In this question l think only the financial aspect can be counted, everything else is too subjective.

True. However a societal issue we have is that we CAN count money, we CAN'T count other things, so we ONLY count money and ONLY do what the counted money suggests. This is clearly simpler, but also wrong.

That's it in a nutshell! Monetary price or profit is of little or no relevance to so many other kinds of value.

Cugel

[belgiangoth]

...knowing the price of everything and the value of nothing...

[pete75]

I read an article a few years ago that posited that an average person, who'd earned the average wage, with the average number of kids, average illnesses, average age of death etc was only just a net contributor to the tax system. I wonder how many of us actually are net contributors?

Like many things I suspect this raises the question as to how the numbers are counted. At the moment I will be a net drain as I have three kids in school (costing the taxpayer approx 15k) but in in 30 years I will have three kids earning and contributing; vs my DINKY friends who claim nothing now but will only be drawing out from the system in 30 years time.

DINKY means double income no kids yet so how do you know they won't have children in the next 30 years?

[Mick F]

From your salary, 20 to 40% goes in income tax ......

No it doesn't.

We all have a personal allowance - £12,500 at present - so you only pay 20% on the amount of salary above that.
Some folk don't pay any income tax as they don't earn that much - Mrs Mick F for instance.
I pay a little, as my service pension is a bit above it ............................ though nowhere near 20% of my pension.

[thirdcrank]

My wife is a nurse, does that make her contribution to society of more importance than someone who imports luxury goods? What if the importer has created 30 jobs in retail?

Or paid enough corporation tax to pay the salaries of several nurses...

In this question l think only the financial aspect can be counted, everything else is too subjective.

Counted to what aim? So that those who have paid more tax have a greater sense of entitlement? Which is demonstrated in the original thread. Or that those who have paid less, should feel less entitled? Regardless of any other contribution to society they've made? I think counting anyone's contribution is subjective, counting one element makes it more so not less.

With brass knobs on. I would incorporate "discounted" when referring to anything that cannot be counted. The minutiae of PAYE rates are insignificant here.

[belgiangoth]

DINKY means double income no kids yet so how do you know they won't have children in the next 30 years?

Well, because they are in their mid/late forties (so would need medical assistance) and have either contended that they will never have kids or have tried, failed and given up. Bit of a personal question though, no?

[pete75]

DINKY means double income no kids yet so how do you know they won't have children in the next 30 years?

Well, because they are in their mid/late forties (so would need medical assistance) and have either contended that they will never have kids or have tried, failed and given up. Bit of a personal question though, no?

It's the logic of describing someone as double income no kids YET and then saying they won't have children.

[Mick F]

We're double income kids grown up and left.

DIKGUAL

[belgiangoth]

It's the logic of describing someone as double income no kids YET and then saying they won't have children.

I think you're grasping at straws here. You could say that no-one should since by miracle or medical marvel people could have kids in their 50s or 60s. Yes it would be odd to describe 20 year olds as DINKYs, questionable in their 30s, but I don't see why it wouldn't be clearly applied to people in their 40s.

[al_yrpal]

I did some calculations a couple of years ago and I concluded that as a basic rate taxpayer 30% of my income eventually goes in tax...income tax, Council Tax, VED, tax on fuel, airline tax, insurance tax etc etc. Its pretty horrifying.

Al