In the UK, the stronger drag on wealth accumulation for the poor is the absurd taxation on the middle incomes (50K+), especially given the very low level of service of public schools, healthcare system, childcare, etc…
Not making a judgement call on which is better (its all trade offs), but this is what Americans don’t get - all those social benefits have a cost and a good portion falls on the middle to upper middle class.
I think a lot of Americans envision finding a European style social safety net by only taxing billionaires.
I think the UK managed to strike the worst possible compromise between the Europeans and the Americans. The NHS provides some basic service, but if you want a French or Italian style healthcare, you’ll end up spending thousands of pounds per year, assuming you are relatively healthy. Childcare is nonexistent, nurseries cost in the order of 1500£ per month per child. State schools are so bad that it’s normal to send your child to a private school. Unemployment benefits are offensive.
All this while everybody with a professional job faces a 40% marginal tax rate (plus NI).
I don’t think the UK has a European style safety net, they don’t tax enough people for that the first £12.5K of your income (below £100K) are income tax exempt the UK has the narrowest tax base in Europe.
Agree that the stronger drag is the cost of childcare, but the poor don't earn 50k+
In fact, if you earn 50k as a single without dependants (or if you are a couple with 2x50k income) you're definitely richer than the majority of folks.
Also, the UK tax system is incredibly generous to high income folks: 40k+ tax exempt pension contributions, 20k ISA allowance, 12k cgt allowance. It means that you can accumulate a good chunk of capital before you'll even have to start paying taxes
You start to lose your income tax allowance at £100K that more than offsets the CGT tax allowance and puts you in a hidden 60% tax rate.
Childcare is expensive as fuck and you lose your childcare allowance at £50K in fact if you share a household with anyone who claims it and you earn more than £50K they’ll deduct that from you…
Living on wealth in the UK is as easy as in the US I would agree to that perhaps even easier since there are no property taxes and probably even more tax schemes to leverage than in the US but getting to that point under PAYE even whilst earning well above the median wage isn’t easy especially if you want to have children and have to live in London for that pay.
The main issue is just how depressed many of the wages in the UK are and thus just how narrow the tax base is.
My point is that if you start your career owning nothing and work hard, you pay an insane amount of tax on it. Even if you make 100000£ per annum, it will take 20 years to accumulate as much wealth as a guy who inherited a 60 square meter flat. In the meanwhile this other guy hasn’t paid a pound of tax and is maybe receiving some benefit.
I should have specified that the problem is the taxation of work-related income (the main source of income of the poor) compared to the taxation of wealth. On this respect I find particularly egregious the NI hike (an increase of the income tax or the introduction of a property tax would have been more appropriate).