I don’t know any company that wrings people out except for maybe the government taxing the incentive out of business owners. Here in the US we have unlimited opportunities to advance within a company to incredibly high salaries or, my favorite, being an entrepreneur and starting your own company.
_Ruby:
I am well aware of what my taxes are going towards, the system is not overly complex.
My monthly income tax pays for services like the NHS, schools and the welfare system (job seekers allowance, disability benefits etc,)
My monthly national insurance tax covers things like maternity pay and state pensions
My yearly council tax pays for our bin collections, police, schools etc.
I did some reading and I found that you failed to mention the triple taxes you in the UK are actually paying. First, that “insurance” you love so much is really a 12% income tax. From what I can tell you cannot opt out of it. Secondly you have a complex and onerous income tax where the marginal rate structure rises from 40% to 60%, then falls back to 40% before rising again to 50%. Third you have a very high VAT of 20%. You neglected to mention all that.
Just as I suspected when you made that list of goodies you get someone is indeed paying for it. Actually the UK tax structure looks far worse than my friend from Denmark above. As I said no one gets a free lunch. I also recall reading that the UK is losing many of its wealthy population to Australia where I assume taxes are more friendly.
That is honestly the most bizarre interpretation of UK tax law I have ever seen!
Its a simple system, both the ‘National Insurance tax’ and the ‘Income Tax’ are taken straight from your salary. Your use of the word ‘insurance’ in this respect isn’t like american insurance - it is a non optional tax. We are talking about what tax contributions pay for what services. As I told you, the ‘national insurance’ payment goes towards things like maternity and pensions etc whilst ‘income tax’ goes towards the NHS, disability support, the ‘welfare state’.
Our income tax is banded in a very clear way:
The first 12K of your earnings are tax free.
Between 12k and 46k is taxed at 20%
Then the portion between 46k - 150k is 40%
With anything over 150k+ at 45%
The tax is structured so if you earn 80K in a year, you pay nothing on the first 12k, 20% on anything between 12k - 46k and 40% on the remaining 34K.
Our national insurance tax is also simply banded and based on your earnings.
The first £166 per week is not taxed
£166- £962 is taxed at 12%
Any additional earnings over £962 a week are taxed at an additional 2%
As an example:
I earn roughly between 40k - 45K a year.
From the £3333 I earned this month the following deductions were made:
Income tax - £452
National Insurance - £315
Student Loan - £162
Employer pension - £84
Perhaps you’d clear up a lot of your confusion by reading straight from the source:
Personal Allowance, Income Tax rates, bands and thresholds.
www.gov.uk
You’re asking where this ‘free lunch’ comes from, im telling you exactly how it is paid for.