Latest news with #hightaxes
Yahoo
6 hours ago
- Business
- Yahoo
‘Henrys' ditch Starmer as Labour taxes them to oblivion
Feeling disgruntled that Kier Starmer did a volte-face on winter fuel payments for pensioners? Earning over £100,000 but strapped for cash at the end of the month? Are you a young professional struggling to build wealth even though you're in a top tax bracket? Welcome to the world of Henrys (High Earner, Not Rich Yet), a growing group of young workers who are well paid on paper but still feel like they are struggling in Starmer's high-tax Britain. Henrys often work in lucrative sectors such as technology, law and financial services but feel like they are just getting by because of childcare costs, a growing list of daily expenses and high tax levels that leave them unable to save at the end of the month. There are around 800,000 of them across England and Wales, according to estimates by The Telegraph based on the number of young people in the top 10pc of earners. Rising tax burdens and childcare benefit cliff edges for those on incomes of over £100,000 have left this group feeling hard done by. In opposition, Starmer suggested that Labour were the party of Henrys. Labour's 'number one mission is wealth creation', he said in May 2024. His 'driving principle' was to 'lower taxes' and encourage economic growth, he told this paper in 2023. Yet many aspirational young voters who backed Labour now feel hoodwinked. Labour mounted a record £40bn tax raid in their first Budget and there is mounting speculation that more could be to come. High earners are already paying a disproportionate amount of tax. Around 60pc of all income tax revenue comes from the top 10pc of earners, which covers those earning over £70,000. That proportion has risen from around 50pc in 2010. The UK's tax burden currently stands at its highest level in history, according to the OECD. Yet for a median earner, direct taxes have fallen to their lowest level in decades. 'I think the reliance on high earners ... there's been a bit of a continuous process over the past 10 or 15 years,' says Alex Mengden, of the Tax Foundation. Tax take from high earners rose between the 1980s and 2010 but this was largely driven by the 1pc racing away from the rest. That picture has changed since the financial crash. 'What's been happening over the past 15 years is actually incomes at the top haven't been racing away in quite they way they have been before but it's more been because of deliberate policy decisions that we've seen tax rises at the top,' says Stuart Adam at the Institute for Fiscal Studies (IFS). 'If you want the tax system to be redistributive, and clearly the best off have the broadest shoulders in that sense, you might say 'Great, that's a good thing'. But there are clearly risks that come with that.' Henrys have had enough. They have taken to Reddit, X and other social media platforms to complain about the Labour Government's attitude towards their six-figure salaries. Not only are they angry about how much they are taxed, they are also concerned about how their money is being spent by the Government. After reversing his decision to scrap the winter fuel allowance – at the cost of £1.5bn – disgruntled Henrys lashed out at pensioners online. On a Reddit forum devoted to Henrys in the UK, one user called retirees 'generation leech' and another chimed in calling them 'the locust generation'. An even more aggrieved user simply labelled pensioners 'wealthy b------s'. 'Turns out they are the only generation in society who seem to get what they want when they throw their toys out of the pram,' one user wrote. 'Meanwhile complaints about tax traps/fiscal drag, childcare allowances/falling birth rates, growth, infrastructure development, investing in public services all fall on deaf ears.' Worse may yet be to come. As the autumn Budget looms around the corner, Rachel Reeves is faced with growing pressure to meet her 'iron clad' fiscal rules. Yet, to do this ING has estimated that the Chancellor will have to increase taxes by £10bn to £15bn, with a further £10bn required to restore her fiscal headroom. 'There is one juicy apple left on the tree. That is to extend the freeze on tax thresholds,' ING's economists warned. David Denton, of the wealth manager Quilter Cheviot, says: 'The tactic that's been employed – probably very heavily since the late '90s when Gordon Brown was chancellor – was the stealth tax of fiscal drag, so you freeze relief, allowance and exemptions. 'Ultimately, in your pocket you have less but it's not as obvious at the outset as tax going up.' Around 1.8m people across the UK are on salaries of £100,000 or more but this is set to rise to 2.2m by the next election, according to estimates from the IFS. Freezing thresholds will drag many more into paying higher rates of tax. Income tax thresholds are already frozen in cash terms until 2028. Extending that freeze to the end of the decade would add £9bn back into the public finances, according to calculations by the IFS. 'Successive governments have increased the tax burden at the top of the distribution, for those with high earnings and high wealth,' says Adam. Nothing comes for free, however, and the cost will likely be the support of Henrys. Amid a slump in the polls and the rapid growth of Reform, Labour is said to be conscious that it needs to win over the Henrys at the next election. However, as the Government keeps piling the pressure on with taxes, some of whom warily found a home in Labour at last year's election are now turning away. If their grumbles online are anything to go by, many may not be so eager to lend their vote to Labour by the time the next election rolls around. 'When will we as a country grow up and ask our senior citizens to downsize? Why is the triple lock in place?,' one Reddit user wrote in response to a recent post on HenrysUK. 'This just punishes the middle class who pay the second-largest amount of tax. It's diabolical.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Telegraph
8 hours ago
- Business
- Telegraph
‘Henrys' ditch Starmer as Labour taxes them to oblivion
Feeling disgruntled that Kier Starmer did a volte-face on winter fuel payments for pensioners? Earning over £100,000 but strapped for cash at the end of the month? Are you a young professional struggling to build wealth even though you're in a top tax bracket? Welcome to the world of Henrys (High Earner, Not Rich Yet), a growing group of young workers who are well paid on paper but still feel like they are struggling in Starmer's high-tax Britain. Henrys often work in lucrative sectors such as technology, law and financial services but feel like they are just getting by because of childcare costs, a growing list of daily expenses and high tax levels that leave them unable to save at the end of the month. There are around 800,000 of them across England and Wales, according to estimates by The Telegraph based on the number of young people in the top 10pc of earners. Rising tax burdens and childcare benefit cliff edges for those on incomes of over £100,000 have left this group feeling hard done by. In opposition, Starmer suggested that Labour were the party of Henrys. Labour's 'number one mission is wealth creation', he said in May 2024. His 'driving principle' was to 'lower taxes' and encourage economic growth, he told this paper in 2023. Yet many aspirational young voters who backed Labour now feel hoodwinked. Labour mounted a record £40bn tax raid in their first Budget and there is mounting speculation that more could be to come. High earners are already paying a disproportionate amount of tax. Around 60pc of all income tax revenue comes from the top 10pc of earners, which covers those earning over £70,000. That proportion has risen from around 50pc in 2010. The UK's tax burden currently stands at its highest level in history, according to the OECD. Yet for a median earner, direct taxes have fallen to their lowest level in decades. 'I think the reliance on high earners ... there's been a bit of a continuous process over the past 10 or 15 years,' says Alex Mengden, of the Tax Foundation. Tax take from high earners rose between the 1980s and 2010 but this was largely driven by the 1pc racing away from the rest. That picture has changed since the financial crash. 'What's been happening over the past 15 years is actually incomes at the top haven't been racing away in quite they way they have been before but it's more been because of deliberate policy decisions that we've seen tax rises at the top,' says Stuart Adam at the Institute for Fiscal Studies (IFS). 'If you want the tax system to be redistributive, and clearly the best off have the broadest shoulders in that sense, you might say 'Great, that's a good thing'. But there are clearly risks that come with that.' Henrys have had enough. They have taken to Reddit, X and other social media platforms to complain about the Labour Government's attitude towards their six-figure salaries. Not only are they angry about how much they are taxed, they are also concerned about how their money is being spent by the Government. After reversing his decision to scrap the winter fuel allowance – at the cost of £1.5bn – disgruntled Henrys lashed out at pensioners online. On a Reddit forum devoted to Henrys in the UK, one user called retirees 'generation leech' and another chimed in calling them 'the locust generation'. An even more aggrieved user simply labelled pensioners 'wealthy b------s'. 'Turns out they are the only generation in society who seem to get what they want when they throw their toys out of the pram,' one user wrote. 'Meanwhile complaints about tax traps/fiscal drag, childcare allowances/falling birth rates, growth, infrastructure development, investing in public services all fall on deaf ears.' Worse may yet be to come. As the autumn Budget looms around the corner, Rachel Reeves is faced with growing pressure to meet her 'iron clad' fiscal rules. Yet, to do this ING has estimated that the Chancellor will have to increase taxes by £10bn to £15bn, with a further £10bn required to restore her fiscal headroom. 'There is one juicy apple left on the tree. That is to extend the freeze on tax thresholds,' ING's economists warned. David Denton, of the wealth manager Quilter Cheviot, says: 'The tactic that's been employed – probably very heavily since the late '90s when Gordon Brown was chancellor – was the stealth tax of fiscal drag, so you freeze relief, allowance and exemptions. 'Ultimately, in your pocket you have less but it's not as obvious at the outset as tax going up.' Around 1.8m people across the UK are on salaries of £100,000 or more but this is set to rise to 2.2m by the next election, according to estimates from the IFS. Freezing thresholds will drag many more into paying higher rates of tax. Income tax thresholds are already frozen in cash terms until 2028. Extending that freeze to the end of the decade would add £9bn back into the public finances, according to calculations by the IFS. 'Successive governments have increased the tax burden at the top of the distribution, for those with high earnings and high wealth,' says Adam. Nothing comes for free, however, and the cost will likely be the support of Henrys. Amid a slump in the polls and the rapid growth of Reform, Labour is said to be conscious that it needs to win over the Henrys at the next election. However, as the Government keeps piling the pressure on with taxes, some of whom warily found a home in Labour at last year's election are now turning away. If their grumbles online are anything to go by, many may not be so eager to lend their vote to Labour by the time the next election rolls around. 'When will we as a country grow up and ask our senior citizens to downsize? Why is the triple lock in place?,' one Reddit user wrote in response to a recent post on HenrysUK. 'This just punishes the middle class who pay the second-largest amount of tax. It's diabolical.'
