- This topic has 252 replies, 54 voices, and was last updated 11 years ago by GrahamS.
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30% flat tax rate?
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randomjeremyFree MemberPosted 11 years ago
http://www.bbc.co.uk/news/business-18137548 – A single 30% rate of income tax is needed in order to boost growth in the UK, a report by lobbying groups says. The 2020 Tax Commission’s report also calls for the abolition of national insurance, and for the basic personal allowance to be raised to £10,000.
I know tax conversations can be a bit spikey on STW; my thoughts are that this would be a good thing. If I’m understanding it correctly, under the proposals, lower wage earners would pay less tax, and the “rich” would have less need to find ways to avoid tax – hopefully leading to a larger overall tax harvest, which helps us all.
(I’ve always thought that the 40% bracket threshold in the UK is set far too low, and the 50% bracket is preposterous).
IanMunroFree MemberPosted 11 years agoThe commission is a joint project between the Taxpayers’ Alliance and the Institute of Directors.
Didn’t bother reading past this point.
TandemJeremyFree MemberPosted 11 years agoand the “rich” would have less need to find ways to avoid tax – hopefully leading to a larger overall tax harvest,
Not going to happen
Flat rate tax is a way of shifting tax burden from rich to poor.
binnersFull MemberPosted 11 years agoWhat a bold and innovative new solution being proposed by the rich – tax me less. They must think we’ve all fallen out of a ****ing tree 🙄
lower wage earners would pay less tax, and the “rich” would have less need to find ways to avoid tax
Heres a genuinely revolutionary idea. How about making the ****ers pay what they owe?
randomjeremyFree MemberPosted 11 years ago@tandemjeremy you’re going to have to explain that one to me ❓
footflapsFull MemberPosted 11 years agoPersonally I think we should have a flat net income. Pick a figure and tax everyone at 100% over that figure. Once people get over themselves they’ll realise that a more equal society is a nicer one to live in (and the rich non-doms can F*** off to America and never come back).
TandemJeremyFree MemberPosted 11 years agoat the moment we have a progressive tax system. If the rich pay less under a new system then where is the rest of the tax coming from? Either less is raised in general or the poor pay more.
If a stupid idea from the far right fringes of politics
titusriderFree MemberPosted 11 years agooff you go to north korea footflaps, let us know how you find it…
headfirstFree MemberPosted 11 years agoI’d be up for it as long as the threshold for paying tax is set at £50k
teamhurtmoreFree MemberPosted 11 years agoFlat rate tax is a way of shifting tax burden from rich to poor.
This thread is only “likely’ to end in tears, but as a point of fact, this is not necessarily true. A flat rate of tax with a minimum threshold is still progressive ie MRT goes up as income goes up. So assume 10,000 tax free threshold and flat rate of 30%.
If you earn 10,000 your MRT is 0%
If you earn 20,000, 15%
120,000 27.5%The higher the threshold, the more progressive the tax
JEngledowFree MemberPosted 11 years agoWhile I think that the ‘rich’ should pay their taxes I cant help, but feel that if I were ‘rich’ I’d also be using any loopholes available to avoid paying tax, which is why I believe that we need to simplify the system and remove the loopholes so that the option of tax-dodging isn’t there!
GrahamSFull MemberPosted 11 years agoPersonally I think we should have a flat net income. Pick a figure and tax everyone at 100% over that figure.
But why would anyone want to do a “formerly highly paid” job then?
e.g. say I’m a brain surgeon, getting paid large amounts of money but having the constant stress of facing death and disease every day, knowing that one slip could kill, plus continually studying, researching, going to conferences etc.
You come along and say brain surgeons now get paid the same as, say, bus drivers. Why wouldn’t I just sod off and become a bus driver then?? Much less stress, 9 till 5, no huge fees for indemnity, professional bodies and exams.
rogerthecatFree MemberPosted 11 years agoDid they look at VAT? It places an unfair burden on those with lower incomes and will also be a factor.
footflapsFull MemberPosted 11 years agoI think Sweden would be a closer fit – North Korea is probably less equal than the UK.
thisisnotaspoonFree MemberPosted 11 years agoand the rich non-doms can F*** off to America and never come back
Allong with pretty much everyone else? Including employers? Why would they set up business in the UK if they’re only paying the same wages to chartered Accountants as burger flippers MacyD’s, then anyone qualified in accountancy is going to just sit back and do an easy job, meaning accountancy firms get lumped with a load of aplications form people who’d be more adept at flipping burgers.
[edit] too slow.
emszFree MemberPosted 11 years agoOn placement last year I was paid £13500, I paid about 1200 tax, under this I would have got 10000 free and then 30% on 3500, that’s 1050, cool extra 150 for me!
TandemJeremyFree MemberPosted 11 years agoAnd lo – the usual right wingers coming on to defend it. what a suprise.
THM – that is far less progressive than we have now, and either less overall tax is going to be raised or more must come from the less well of if the rich get a tax cut. Simple if you can see thru the right wing shibboleths
donsimonFree MemberPosted 11 years agoIf the rich pay less under a new system then where is the rest of the tax coming from? Either less is raised in general
or the poor pay more.Is how I understood the original proposition, so no extra burden on the poor. In fact with an increased threshold the poor will be paying less.
Out of interest TJ, what is a poor person? How little do they need to be earning to be considered poor?And lo – the usual right wingers coming on to defend it. what a suprise.
Can’t wait for the usual lefties to come charging in throwing their weight around and beating everyone down with repetion and boredom…
teamhurtmoreFree MemberPosted 11 years agoRoger – VAT is not progressive and penalises lower-income families more (ie its regressive). But that is not the same as a flat rate of tax with a min threshold. As the simple maths above shows, this is still progressive.
titusriderFree MemberPosted 11 years agoI’m not saying we should or shouldnt have a flat rate of tax but there is no way on earth we should have a flat final income
unklehomeredFree MemberPosted 11 years agoemployee NI is pointless now as it is no longer ringfenced NHS funding, it would be fairer to do away with it. While a simpler system would make tax avoidence harder, a flat rate will not be enough
njee20Free MemberPosted 11 years agoBut why would anyone want to do a “formerly highly paid” job then?
e.g. say I’m a brain surgeon, getting paid large amounts of money but having the constant stress of facing death and disease every day, knowing that one slip could kill, plus continually studying, researching, going to conferences etc.
Not that I think communism is the answer (I don’t), but footflaps didn’t specify a threshold – it could be £10m. All the super rich sportsmen/actors/musicians/bankers etc etc give vast swathes of their income, but it doesn’t affect the brain surgeons/bus drivers who could end up better off. Maybe. Still a crap idea (no offence footflaps).
randomjeremyFree MemberPosted 11 years ago@tandemjeremy no that’s not right. The reason the “rich” find ways of exploiting loopholes and avoiding tax is *because* the taxable rate is too high (50% of all earnings over 150k with no initial allowance I believe).
The thinking behind a less punitive 30% rate is that people will feel this is fairer and pay up rather than try to find ways of avoiding tax, although this would only work if the loopholes were closed.
JunkyardFree MemberPosted 11 years agoyes can we tax them less I mean what other way can there be to get them to pay more than by charging them less 🙄
ah sod it, it only cost 50 billion to implement the first year so come on lets help out the rich in this time of austerity with a tax cut we cannot afford then we can really let rip at the public sector and cut it some more…..no really this is their actual plan and they admit it !!!!
It is proper blue sky thinking and some sort of creeping tea party curse trying to invade our island.
How about they **** right off and pay more tax as they are **** minted and we are all skint?
ool extra 150 for me!
Thatcher would be proud of you for thinking only of yourself
So grahamS what you are saying is basically your wife does not care and only does it for the money…let me know how that tea time debate went will you 😉
THM – so your point is they want a flat rate tax because they want a progessive tax rate…..someone has not thought this through properly have they. its a mute pooint and you can defend your stance if you wish but i doubt you actually “believe” it.
thisisnotaspoonFree MemberPosted 11 years agoVAT is not progressive and penalises lower-income families more (ie its regressive).
I’d argue it’s progressive.
It’s not charged on necesities like food, kids clothes, etc. So if you struggle to buy those then you really are poor and it doesnt apply to you. Once youve bought the essentials (VAT free) then everything else is a luxuary and is taxed.
TandemJeremyFree MemberPosted 11 years agoIs how I understood the original proposition, so no extra burden on the poor. In fact with an increased threshold the poor will be paying less.
In that case with less tax raised overall from income tax either the services the poor use will be cut or the tax will have to be raised from elsewhere
It is a mechanism to transfer wealth from poor to rich – that what its designed to do – that’s what it will do.
donsimonFree MemberPosted 11 years agoOnce youve bought the essentials (VAT free) then everything else is a luxuary and is taxed.
For this we need the TJ definition of rich and poor. (And probably what is or isn’t a luxury could be quite amusing too.)
In that case with less tax raised overall from income tax either the services the poor use will be cut or the tax will have to be raised from elsewhere
That is the objective of the 30% rate, is it not? It’s a nice theory.
teamhurtmoreFree MemberPosted 11 years agoTJ – not sure your recent break was enforced ( 😉 ) or not, but dont fall into the same old tiresome trap, please. I am merely correcting the factual element of your point. Nothing to do with RW or LW – simple maths. As for the empirical evidence, on tax take that is mixed and again hopefully free from political dogma.
No-one know what would happen to the overall tax take but under the current system the optimal tax rate is “believed” to be between 44-48%. (edit: under differing hurdle rates not a flat system BTW)
TandemJeremyFree MemberPosted 11 years agoThe thinking behind a less punitive 30% rate is that people will feel this is fairer and pay up rather than try to find ways of avoiding tax, although this would only work if the loopholes were closed.
Why not just close the loopholes?@
Everyone speeds in their cars – should we raise the speed limits to allow for this?
GrahamSFull MemberPosted 11 years agoOut of interest TJ, what is a poor person? How little do they need to be earning to be considered poor?
Don’t start down that road. TJ will explain to you why a couple on average wage are “poor”, while a lone parent paying high rate income tax MUST be “rich” (despite potentially having less actual money).
The official government definition of “low income” is a household income of less than 60% of median.
thisisnotaspoonFree MemberPosted 11 years agoit could be £10m. All the super rich sportsmen/actors/musicians/bankers etc etc give vast swathes of their income
Then the companies would have no incentive to pay more than £9,999,999 (other thresholds are available), then the company keeps the profit, and it porbably registered in Barbados/Swizerland/Luxemburg.
randomjeremyFree MemberPosted 11 years ago@tandemjeremy no again you are wrong. There’s a difference between a percentage and a total, I.E 30% of a bigger pot is more than 50% of a pot that is untaxable because it’s offshored in a tax haven.
So tax revenues will increase, not decrease.
TandemJeremyFree MemberPosted 11 years agoNo teamhurtmore – you again betray your thatcherite bias. You are factually incorrect, You believe right wing assumptions are facts. Nothing new for you, I wish you would have the intellectual honesty to admit it.
Flat rate taxation shifts the tax burden from rich to poor – this is a simple fact.
Back to ignoring you.
unklehomeredFree MemberPosted 11 years ago@tandemjeremy no that’s not right. The reason the “rich” find ways of exploiting loopholes and avoiding tax is *because* the taxable rate is too high (50% of all earnings over 150k with no initial allowance I believe).
Except the 150K already earned taxed at lower amounts and at present the first 8100 not taxed at all…
JunkyardFree MemberPosted 11 years agon that case with less tax raised overall from income tax either the services the poor use will be cut or the tax will have to be raised from elsewhere
Doe sanyone ever read the article or is it just me who doe sthis then comments? [ no offence TJ]
The commission says shifting to a single income tax rate would add £49.1bn to the national deficit in the first year, if the changes were not phased in or if spending were not cut further.
But it predicts that after 15 years the change would actually reduce overall borrowing by £35bn.
The commission recommends limiting taxation as a whole to a third of national income, and limiting spending to the same level, which would mean extending cuts in public expenditure to 2020.
randomjeremyFree MemberPosted 11 years agoExcept the 150K already earned taxed at lower amounts and at present the first 8100 not taxed at all…
What is it you’re trying to say?
emszFree MemberPosted 11 years agoJunky I paid my FAIR share that the government decided . If another govt decided that my FAIR share would be less under a different system then I’m happy
£150 is hardly going to break the **** bank and I’m **** poor, so every little helps, keep you self righteous indignaty to yourself
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