Should pensioners pay more tax?
A new report has suggested older people need to pay more in tax.
Older people should be subject to the same rates of tax as younger people, according to a new study by the Fabian Society.
The think tank’s research identified “really significant intergenerational unfairness” on the issue of taxation. It called on the Government to “adopt a ‘presumption of equality’ when considering public policy for different age groups” and for all policies where older people are given a financial advantage to be reviewed, as “older people are no longer special”.
Improving middle incomes
The society’s report identified incomes for older people in the ‘squeezed middle’ improving significantly in recent years. Since the financial crisis real middle incomes have fallen by 5% overall, yet for retired households those incomes have grown by 5%.
This trend is predicted to continue.
The report argues that such healthy retirement incomes are a good thing, and that the focus should initially be on improving incomes for middle-income people of working age.
Nonetheless, “the different fortunes of the retired and non-retired ‘middle’ is something that cannot be entirely ignored when politicians consider hard financial choices”.
A question of tax
However, the most interesting part of the report is unquestionably its section on tax. The report’s author, Andrew Harrop, suggests it is difficult to justify large differences in our tax bills based simply on age, particularly when you consider how much of the housing assets of the nation are in the hands of older people.
As a result the Government should “adopt a policy of equalising the burden of taxation paid by different people of different ages”.
How it could be done
The report suggests a number of ways this could be achieved. They include:
- Tax wealth and consumption more and earnings less
- Treat earnings and pensionable income the same by merging National Insurance and Income Tax
- Apply National Insurance to earnings after State Pension age
- End tax-free lump sums on private pensions
- Implementing a Land Value Tax or reform Council Tax to help younger people buy
What do you think? Should older people pay more?
You can read the full report on the Fabian Society website.
More on tax:
Where Council Tax is rising and falling in 2013/14
How to cut your Inheritance Tax bill
How to make sure you’re on the right tax code
How to slash your Council Tax bill
Ten ways to avoid Capital Gains Tax
How to get a tax refund
Beware this tax scam
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Comments
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According to this article in the Guardian last May:- http://www.guardian.co.uk/commentisfree/2012/may/31/how-to-kickstart-uk-economy between 1997 and 2012 the richest 1,000 people in this country had increased the value of their wealth by 3x to £414bn, more than 3x the deficit at the time. So explain to me why ANYONE would suggest we tax pensioners more...........
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The fact is that the country is so broke that is will need to look to anyone who still has weath ( but is not important to politicians) to be milked. Of course the governmnet will get at this wealth in houses when you die as the IHT will soon be mopping up large sums on the death of us. But that is not soon eneough as we are living too long for the Treasury. So the Fabians are doing the dirty work and 'softening' up the old folk ready to be milked in the name of 'fairness'. The answer ,which no politican wil ever face,is to reduce spending to match the income by cutting foreign aid, EU payments, consultants payments, scrap PFI , teart on taxpayers in NHS hospitals , no subsidies to pathetic climate chnage scams etc. You get my point , I hope.
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Yes, well off pensioners should pay more tax. When I retired, I noticed an immediate benefit by not having to pay National Insurance. The original idea was that you paid NI during your working life to build up a fund which would pay for the state retirement pension and other benefits. With the transformation of the state pension into a Ponzi scheme, NI is just a second income tax and there is no particular reason why pensioners should escape. The younger generation is being seriously clobbered financially at every turn by: Income Tax, NI, student loans (I never had to endure that), high rents and lunatic house prices. It may not feel like it to some, but we older ones are seriously fleecing the younger generation. My advice to any young person who wants to get on, is to emigrate to a country where they are not taxed to death.
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27 April 2013