Who should pay for social care ?

[Bob McC]

NI is smoke and mirrors. Abolish it and increase income tax, this way the burden is equally shared. Or alternatively increase NI, and once again those of working age will continue to subsidise the boomer generation. Now let’s think, who votes Tory? It’ll be the second option then.

What a stupid stance to take.
You’ll be telling us next you don’t want to pay tax at all because let’s face it 90% of NHS care is taken in the last 5 years of life.
Boomers being kept alive by the yoof!
And income tax is smoke and mirrors.
The greatest burden will fall on PAYE with too many using schemes to avoid paying much, if any, income tax at all.
You will need care when you are older if you are lucky enough to reach that age. Hope you have a nice house to pay for it, because believe me there are some utterly shit care homes.

 

[Bob McC]

If only it was that simple. When NI was introduced what was it supposed to pay for? Health Care, Unemployment, State pensions. Why should pensioners be paying for future state pensions?

Wrong.
The NI Act of 1911 was to introduce limited health care and unemployment benefits.
State Pensions had been in existence from 1908.

 

[Bob McC]

With fiscal drag on allowances and the lock on pensions we're nearly at the point where that is all pensioners on full state pension.

Might as well just add it onto the Income tax rate

The maximum state pension is £9338 a year.
No where near the income tax allowance and until the recent pressure on private pension provision nearly 50% of the population had made no other provision.

 

[Bob McC]

They are very different risk v reward profiles. PAYE should be taxed more heavily than other income (although the delta is pretty negligible in the UK now) as there’s not a lot of risk involved to earn your reward. You turn up, do your job, get paid. If you run your own business you try and win customers, do your job, hope you get paid and pray you don’t lose the collateral you’ve had to put up to fund the business. If you ‘invest’ you may get back less than you put in, as the saying goes. Wealth which has already been taxed shouldn’t be taxed again. As you say, you build a pot to try and see you through old age. If that gets taken away, why bother?!

Wealth already taxed should not be taxed again.
But put CGT on all principle private accommodation.
House price inflation has not been “earned” at all.
And stop all scum bags who avoid paying the same rate of income tax as any one on paye.

 

[Bananahead]

Wrong.
The NI Act of 1911 was to introduce limited health care and unemployment benefits.
State Pensions had been in existence from 1908.

Have you had a hard day?

National Insurance | Encyclopedia.com

National Insurance: What National Insurance is for - GOV.UK (www.gov.uk)

 

[Sue Pertwee-Tyr]

A tax on one’s estate at death is progressive because it’s a tax on wealth. And the idea that things shouldn’t be double taxed doesn’t wash. Firstly, the increase in value of your house after inflation hasn’t been taxed, so let’s have a bit of that. Secondly, VAT is a tax paid with funds which have mostly been taxed already, as are all forms of duty such as fuel, alcohol, tobacco. I pay insurance premium tax on my car, house, travel insurance, out of my, taxed, salary. There’s loads of examples of already taxed funds being re-taxed, even before we get to IHT.

 

[Seanm]

Some of the arguments against increasing NI are outlined here:

https://www.resolutionfoundation.org/publications/a-caring-tax-rise/

Seem pretty irrefutable to me: putting the burden on low earners and young people is an awful idea.

This short Nuffield Trust report outlines the pros and cons of several different proposals, although doesn't really look at wealth taxes:

https://www.nuffieldtrust.org.uk/files/2019-04/how-to-fund-social-care-briefing-2019.pdf

Key things for me are that any proposed source pools risk, taps into assets and not just incomes, is progressive, and doesn't play to inter-generational beefs.

LOL at this "Wealth has already been taxed!" stuff, by the way.

I'm amazed that this government, of all governments, is actually prepared to grasp the nettle.

 

[Sue Pertwee-Tyr]

Just a further thought on the ‘no double taxation’ thing in respect of one’s estate: the beneficiaries of the estate haven’t earned their windfall, nor have they paid tax on the value of the bequest, so the notion that this is double taxation at all is fundamentally false. It’s unearned income, tax it as such.

 

[Mr_Sukebe]

My view, find a way to ensure that the top 1%, who apparently have 40% of the wealth in the world should cough up and stop screwing over the rest of us.

 

[gavreid]

There needs to be agreement between generations about what to, clearly pensions for the young need to be sorted too or they will be working until they drop. The problem is one of low tax take and the obvious issue is low taxes on business. I'm not in favour of increasing NI and I do favour increasing IT, but I think businesses, who previously funded far more generous pensions arrangements, could comfortably pay a social care tax themselves since it is thought that they could afford increased NI contributions. I think pay at the bottom should increase substantially and I see pensions and social care being a combined provision. I'm also against all but minimal inheritance - it just locks in the current inequalities - so inheritance tax at 100% after, say, 50 k. Gifting to children in later years needs to be reviewed too, probably with a much longer tax liability against the estate. However, I think that remortgaging property for the profit of spivs in the insurance business needs to be properly considered and regulated so that we all benefit from the rising house prices.

 

[Tony L]

As I understand it right from the off it has always been those in work who pay for pensioners/social care, i.e. the notion you pay for *your* pension is just bullshit/a marketing slight of hand. You actually pay for someone else’s at the time you are working. There is very little buffer here.

It will be very interesting to see what the government do as most options look to be diametrically opposite to Tory instinct. I’d be amazed if we saw a wealth tax, and I think this needs to be viewed very differently to an inheritance tax. Taxing inheritance is fair enough I guess, though it does certainly have a ‘social cleansing’/‘gentrification’ aspect as children would be forced out of expensive London property etc if they didn’t have the resources to pay the tax. There are a lot of “working class” people living in £1m+ family houses etc. Depending on exactly what it is and how it is defined I have potential issues with the concept of a wealth tax too (punishing savers/investors and people who are naturally frugal/shrewd who make good strategic choices, inadvertently rewarding recklessness, and even encouraging those living in debt, e.g. why put money aside if the government are just going to steal it?).

As well as tax reform we also have to point a finger at Brexit, nationalism, xenophobia etc. The forces that are currently sending our economy into a death spiral. Not only are the shelves empty in supermarkets, but those who would normally be driving trucks to fill them are no longer paying tax, NI etc. A key way to fix this is to open up the economy and get a lot more people working and being more productive. IIRC Germany, another nation with an ageing population, gets this and takes in a lot more immigration to boost their work force. We need to start undoing the xenophobic bullshit of the past decade and get a lot more people working and generating tax and NI. I think Japan is in a similar position with an ageing and correspondingly less-productive population too, not sure how they are addressing it though.

 

[gavreid]

It will be very interesting to see what the government do as most options look to be diametrically opposite to Tory instinct. I’d be amazed if we saw a wealth tax,

That's the key for the Tories, they're probably in favour of self or insurance funded care but their voter base bought into something entirely different in the 60s & 70s pre-Thatcher.

 

[Tony L]

That's the key for the Tories, they're probably in favour of self or insurance funded care but their voter base bought into something entirely different in the 60s & 70s.

Yes, I forgot to even factor that in. They need to be viewed in the same light as the US Republican Party, just one that is ‘saddled’ with a pension scheme, NHS and social care it is fundamentally opposed to conceptually. We need to remember the Tory party consistently voted against the creation of the NHS and state welfare.

 

[gavreid]

Yes, I forgot to even factor that in. They need to be viewed in the same light as the US Republican Party, just one that is ‘saddled’ with a pension scheme, NHS and social care it is fundamentally opposed to conceptually. We need to remember the Tory party consistently voted against the creation of the NHS and state welfare.

A lot of older Tory voters will have supported Labour (or LD) at one point. Some of the worst old Tories near me still hate Thatcher - now look what they support!

 

[lordsummit]

What a stupid stance to take.
You’ll be telling us next you don’t want to pay tax at all because let’s face it 90% of NHS care is taken in the last 5 years of life.

Did you read what I wrote? Abolish NI, and instead increase income tax to cover what’s needed to make it more equitable. I’m not Arkless!! I don’t know the answer to this, but if you’re retired and you have income from say, property being let out, do you pay tax on that, NI?

If they increase just NI it’ll just cost the young more and mean the boomers who’ve made a notional fortune on property like my parents; they bought it in 1970 for £2000 it’s now worth £250k. I’m unlikely to see that money, they may well need to sell it for care. My house in comparison has done very little since we bought it twenty years ago, my wages have for various reasons fallen relative to the mortgage since. You’ve done very well out of the 70s (waits to hear cries of excessive interest rates…) and I don’t begrudge it you. I do however think you need to also contribute towards social care if you can afford to. I don’t mind paying extra if everyone who should contributes does. It’s not unreasonable though for people drawing pensions and still earning incomes to also contribute. Why is that a problem?

 

[mandryka]

Why are you guys all so keen on taking it from income taxes rather than estate taxes?

 

[Heckyman]

Seems pretty obvious that the "risk" of needing social care is unpredictable and the cost should be socialised and public.

State pension and health care are universal, I would just add social care to that (like the Nordics). Clearly our present tax system is not fit for purpose.

 

[MikeMA]

There needs to be agreement between generations about what to, clearly pensions for the young need to be sorted too or they will be working until they drop. The problem is one of low tax take and the obvious issue is low taxes on business. I'm not in favour of increasing NI and I do favour increasing IT, but I think businesses, who previously funded far more generous pensions arrangements, could comfortably pay a social care tax themselves since it is thought that they could afford increased NI contributions. I think pay at the bottom should increase substantially and I see pensions and social care being a combined provision. I'm also against all but minimal inheritance - it just locks in the current inequalities - so inheritance tax at 100% after, say, 50 k. Gifting to children in later years needs to be reviewed too, probably with a much longer tax liability against the estate. However, I think that remortgaging property for the profit of spivs in the insurance business needs to be properly considered and regulated so that we all benefit from the rising house prices.

Inheritance tax at 100% over £50k is fine if you have a trustworthy and competent government. I consider myself to be left of centre and the idea of handing the best part of £1m to a Johnson led government to get their filthy hands on fills me with horror, as does the idea of a latter day Jeremy Corbyn flushing it down the lavatory. I'd rather see progressive wealth and property taxes applied over the life of the assets.

 

[flatpopely]

So inheriting something should be at 100%? So you get nowt.

 

[gavreid]

Inheritance tax at 100% over £50k is fine if you have a trustworthy and competent government. I consider myself to be left of centre and the idea of handing the best part of £1m to a Johnson led government to get their filthy hands on fills me with horror, as does the idea of a latter day Jeremy Corbyn flushing it down the lavatory. I'd rather see progressive wealth and property taxes applied over the life of the assets.

That's what I mean about intergenerational buy-in. It's very hard on the retired to pay tax on property that's increasing in value if their pensions don't do the same, so that encourages downsizing, which wouldn't be a bad thing. That's what they do in France (Paris) for example until you sell the final flat to go into a care home. In the end though corporate interests have to pay (that's partly what a NI increase means anyway) but I'd rather the State gain the assets than the US health insurance companies, for sure.