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Graham - TAXABLE INCOME PUTTING THEM INTO THE TAX BAND! not total income.
I wonder if the ban hammer will be wielded for excessive arguing from one of the big hitters here?
Probably for me. I am on thin ice. Its pointless debating this with teh head in the sand right wingers here who think it acceptable that we should have such a rich country and still have impoverished people as we allow those with the power to accumulate vast wealth
You're right TJ, whinging about it is the way forward.
[url= http://jobs.aol.com/articles/2012/05/08/another-ceo-quits-after-shareholders-revolt-in-pay/ ]http://jobs.aol.com/articles/2012/05/08/another-ceo-quits-after-shareholders-revolt-in-pay/[/url]
Does the BBC article include the relationship between how much business the top earners bring in against how much business the lower earner do?
And you still haven't answered the question regarding your experience in the boardroom that gives you the right to comment on this thread. 🙄
No reply to the johnny two houses comment then?
So you guys really think this sort of stuff is fair and we shouldn't try to do anything about it?
Yeah, sure we can do something - don't bank with Barclays, don't buy anything from any of the FTSE top 100 companies - you can do something about it anytime you like, we all can, change it tomorrow.
Frankly, I couldn't give a toss what Barclays pay their boss - they received no UK government funding or bailout, I don't have an account with them, its an issue between them and their shareholders, and they can pay him whatever they want.
I fail to see whatsoever that has with how much of [b]my[/b] wages the government take from [b]me[/b] to pay [b]your[/b] wages TJ
Tj you bang on about wealthy people but you yourself are wealthy compared to most. I wonder how you would react to someone suggesting a punitive tax on those with, for example, more than one property. After all, by taking more than your fair share, you are oppressing those people who now have to rent rather than own a property themselves.
so you agree with me then. fine. Its the truth.That's just pathetic.
Did you even read his post (the one that showed you to be talking shite)
Or will you continue to pretend that everyone is single and nobody has families to support ?
neal - earning enough money to put you into higher rate taxation puts you in the top 10% of the countries earners. (just about) That means you are rich. Ie better off than 90% of the country
Not being able to afford a 3 bed semi in Kensington or to buy a new jag this year does not make you poor.
because you can point to a G20 economy where 50% tax rates have been introduced with no "loopholes" and had no adverse effect on the total tax received; or economic growth. And there was me thinking that there was even empirical evidence to back up the well established Laffer Curve Theory. Now there is strong evidence (supported by wee Eck and his chronies) that reducing corporation tax encourages growth and investment - why is that any different for individuals. Given a decision about where to base your business one or two percent might not have any influence, but typically doubling the actual amount of tax paid. Whilst the "masses" are somewhat limited in where they can go set up shop - a wealthy individual planning to bring jobs rarely faces the same barriers.Tehr is absolutely no evidence of this in any meaningful way at all. Its one of those right wing myths put about.
(3) We don't actually need that much tax!
Ah right - so you want massive cuts in services then.
Well, actually I'm not fundamentally opposed to cuts in general. There's far too much waste in government run activities. However, the point is if we actually closed all the so called loopholes tax would be above budget (this might be good for reducing the defecit quicker of course but I've not heard any party argue that we should be increasing total taxation; although I will vote for any part that is bold/brave enough to say "our plans will cost more and you'll need to pay for it").
but they are not 'loopholes' they were designed into the system with a full knowledge of the implications. Very few of the avoidance routes taken by wealthy individuals are that cunning or devious - most of them are to a greater or lesser extent encouraged by government.loum - As an excuse for not closing tax loopholes. You couldn't make it up.
muddy-bum - muddy_bum - Member
My back of a fag packet calculations suggest that if you earn between about 15 to 50k (ish) then you'll pay more tax under a fixed 30% with 10k allowance.
Everyone else pays less the highest earners paying significantly less.
Therefore shifting the tax burden onto the squeezed middle.
No the proposal is to get rid of NI which hits the squeezed middle the most. Comparing actual total earnings related taxation now and in the proposed system EVERYONE pays less than the official rates now.
if facts are at all relevant?
I stand corrected the tax payers alliance and z-11 do believe in redistributing wealth via a progressive taxation regime and have done this due to a deep commitment to progressive taxation rather than an attempt to dilute what we currently have and switch the burden form the richer to the poorer tax payers.
Could you show me your calculations with a 1 p tax threshold and then a flat rate please to show me how strong the argument is about progressive ?
I realise I am in danger of TJ'ing the argument. I am sure we both get each others point.
Of course your argument is strictly correct as maths does not lie. However the point remains anyone who pays tax pays the same rate on the same amount of money so after the point you pay tax it is not progressive I would argue it is better being called a flat rate tax system with a threshold for that is what it is.
I think this post also helps explain my view and you know this is why the right wing are proposing it
My back of a fag packet calculations suggest that if you earn between about 15 to 50k (ish) then you'll pay more tax under a fixed 30% with 10k allowance.
Everyone else pays less the highest earners paying significantly less.
Therefore shifting the tax burden onto the squeezed middle.
so its progressive but has switched the burden from the rich to the poor. I await an explanation from THM on this FACT and how it is a progressive change 😉
are you asking me if people avoid tax? Can you guarantee it would not occur under what has been proposed?under the current tax system are there times when people earning more than others actually play lower marginal rats of tax?
TJ I tend to have similar views to you but really you dont help your argument or the left very much.
Graham you raise some interesting points but you are altering form an individual to a family. You both have a point the individual is in the top whatever the % and rich but the household is not. It is not surprising that comparing an individual to a household has differences- that is not to say you dont have a point but it is a bit of a false comparison- individuals to groups to make your point.
FWIW your point does have some merit and there may be a good case for treating household income as the tax point rather than individual earnings.
Laffer curve is well known nonsense, we are not full of economic refugees from Germany and France despite taxation effectively being 10% or more higher there.
I was going to write that I often wonder where TJ gets his "facts" from. But after this thread, I no longer wonder, I know they're all made up!
The problem with arguing about economics/politics on here is that, by and large, people are selfish. And it's the most selfish that are the most readily heard (when things aren't going their way), or a total contrst and they're quiet as a mouse (when things are going their way). The whole notion of "tory's trying to make the rich richer, and the poor poorer" is bloody ridiculous. Anyone in charge of this country is going to try their damnedest (you would hope) to do their best by the interests of the whole country, of which the majority certainly ain't rich.
I had a few thoughts about this 30% flat rate tax idea. Initially, I thought that it sounded a bit extreme. It sounded a little ill thought through, but clearly there are a number of people out there that believe it would have some merit. So let's examine why...
Because (1) Most of the loopholes were created with good intent, so shutting them may be damaging. e.g. would you want to see childcare vouchers, bike to work, season ticket loans, or tax exemption on pension contributions scrapped? How about schemes which encourage high net worth individuals to invest in small early stage companies etc? Or is it only the loopholes you don't agree with you want closed?
(2) if all those who "should" pay 50% tax actually had to many of them would relocate (losing all their tax) and some of them would take jobs with them; new investors would be put off investing in the UK and the less scrupulous high earners would go from legitimate avoidance to illegal evasion.
(3) We don't actually need that much tax!
(4) The current system is massively complex, and therefore inefficient. It costs approx £4 BN a year to run HMRC.
(5) Pretty much everyone seems to agree that the more you earn the more you should pay; but not everyone agrees that should be disproportionately more. I've never heard anyone give a sensible explanation why someone on 60k a year should pay twice (in percentage terms) what someone on 15k should on their earnings; and certainly never heard why a couple on 15k each should pay about £5k less in tax than a couple with a single income earner on 30k. The proposal doesn't necessarily completely address that (by not being pure flat tax) but goes someway.
poly makes a few very good points. In answer to his point 2, the problem is I think we don't know the answer to that question. Some people (TJ) will argue that it's all academic and that they'd all stay anyway, just grumble about having to actually pay their taxes, but I'm not so sure. That said, someone on £150k a year whilst certainly very well off, is probably not so rich he can afford to spend more than 6 months of the year in tax exile, besides he's probably only allowed 25 days holiday a year! But for the super rich, then yes, they'd probably all bugger off...
Points 3 and 4... Very true. This country is highly inefficient in how and where it spends taxpayers money. If there was something wrong with you car, causing it to run poorly, and drink fuel at an alarming rate, would you just put up with it until you had to beg/steal/borrow money just to put fuel in it, or would you sort the problem out so it was more economical again? A flat rate of tax, would in theory, drastically cut down the complexity and cost of running the HMRC, which is probably no bad thing. Though it could add 100,000 people to the dole queues overnight adversely. But is it better that they are paid good salaries to essentially run around, adding no value to anyone or anything because of an overly complex taxation system, or that they temporarily become a state burden as a result of drastically reduced state spending? Hard to say... I've done a bit of consultancy work inside the HMRC a few years ago though, knowing what goes on as standard practice in many cases there, and how inefficient the system is, I felt very aggravated that I contributed any tax money at all to the system!
I think there's one thing that essentially we all on here will agree on. However it is achieved, it is in the best interests of GB on the whole that money earnt here, is kept here as best as possible. There is no perfect solution... Hence why it's worthwhile considering the alternatives. And on paper, the 30% flat rate solution (above £10k) seems as though it would benefit everyone, or at least most people. Whether or not it would keep more mega rich tax £'s in the country or not is another matter, but I think that if you're paying the best of the best accountants loads of money to keep hold of as much of your money as possible, it makes far more sense if you're paying 50% on most of your income than it does if you're paying 30%, as at 30% you'll have far less money to actually save by going to those extreme efforts.
Laffer curve is well known nonsense,
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neal - earning enough money to put you into higher rate taxation puts you in the top 10% of the countries earners. (just about) That means you are rich. Ie better off than 90% of the country
Not being able to afford a 3 bed semi in Kensington or to buy a new jag this year does not make you poor.
I'll ask again then 🙄 (using the rolleyes as there is no "head banging against a wall")
Did you read the stuff about [b]household income[/b] being the accepted measure, rather than individual income ?
Or is that just an inconvenient truth that you are happy to ignore ?
we are not full of economic refugees from Germany and France
London has approximately 190,000 French expatriates, with approx 300,000 people who claim French citizenship
FACT
Not for nothing is it known as the 21st arrondissement... I suppose they're all here for the weather, eh TJ?
Now, what was it Sarkozy said to a hall full of those expats last January
[i]
"Come back!"
"You've brought so much intelligence, imagination, passion for work and desire for success with you to London that you have helped give it vitality that Paris needs so much."[/i]
The whole notion of "tory's trying to make the rich richer, and the poor poorer" is bloody ridiculous. Anyone in charge of this country is going to try their damnedest (you would hope) to do their best by the interests of the whole country, of which the majority certainly ain't rich.
You would hope so but I would advise you to see what their policies have done and then persuade me with the facts.
And on paper, the 30% flat rate solution (above £10k) seems as though it would benefit everyone, or at least most people.
you di dread the article and the 50 billion shortfall and the subsequent cuts in public service to 2020. you di see the fag packet calculations that of who was worse of whilst reaching this decision didnt you? The very poor would be better off and the very rich. The majority in the middle would be paying for this and get worse services. I am not sure how this can be called better
did you read the bit about comparing individuals to groups? Individually paying top rate tax does make you relatively rich - top 10 % ish individually. His point is a fair one. see my post above I am not repeating it.Did you read the stuff about household income being the accepted measure, rather than individual income ?
Neal - did yo bother to read what I said? Clearly not.
And on paper, the 30% flat rate solution (above £10k) seems as though it would benefit everyone, or at least most people
So long as yo are prepared to accept a much impoverished services such as the health service.
So long as yo are prepared to accept a much impoverished services such as the health service.
How would this happen then? Define impoverished, you do use the langauge in a most selective way.
I wonder how many NHS workers are higher rate taxpayers?
All the doctors, clearly, and the managers I wonder what proportion of Nurses?
I suppose they could take a bit of a pay-cut? I mean, if they're already in the wealthiest ten percent, then its not asking too much, is it TJ?
You would hope so but I would advise you to see what their policies have done and then persuade me with the facts.
Hahaha
I'm purposefully trying to stay out of the antiquated Left Vs Right wing, antiquated arguments that so many people on here still get hung up on. They're not relevant any more... Besides, for every Tory Govt. that has brought tax hikes and/or public spending cuts along with deregulation of various industries to try to stimulate growth, there has been a Labour Govt. that preceded it, that spent years telling everyone they were all going to be rich, own their own houses that would consistently go up in value year on year, but all that happened was the familiar boom then bust scenario.
But like I say, politics of decades gone by are hardly relevant any more... There's no point looking to the past (which is what most people in this ****ing country are so good at), we need to look to the future, sometimes thinking outside of the box and embracing (or at least exploring) new ideas and ways of doing things.
JY - I am sorry, but I am not sure I understand the question you are asking. The fag packet quote is also incorrect. Its a very simple piece of maths. So I really cant see what I am explaining in term of what is progressive and what is not. Happy to do so, if you can clarify, but I am quite sure you have done a simple spreadsheet to check the FACTS as quoted.
Interesting that despite the Thatcher quotes (why does she always get thrown up) it was Beveridge who was actually an early proponent of flat rates.
So glad I'm back at work.
Nice to see the right wingers still cant grasp the point that the left wingers are not just trying to protect their own intrests.
😉Nice to see the [s]right[/s] left wingers still cant (sic) grasp the point that [s]the left[/s] not all right wingers are just trying to protect their own intrests.
Back to VAT for a moment (only just read this essay on economics) - ok understand the argument, however, VAT exemption on food & children's clothes are not the only essentials people need - adult clothes, heat, light, mobility, communications - these are essential to have any real chance of surviving and trying to make some progress in life. I don't have an answer just wanted to reply to the over simplistic evaluation of the effects of VAT on the low paid.
Don.... You missed an spelling mistake, very poor.
Knew the laffer curve was going to get a mention. LULZ
Again????
When is TJ going to acknowledge that wealth and income are nothing like the same....
(at least he owned up to trolling after the child benefit thread got locked)
I'm left leaning, so sympathise with the views. But the only "wealthy" people I know on 40%+ tax rate were already wealthy anyway.
do we honestly think that taxing someone at 30% rather than 45% is going to make any difference? If the maths work, i.e. the accountants cost are less than the saving the tax is still not going to be paid.
Next VAT, kids cloths are not exempt from VAT, to say they are is crap, small clothes are exempt, i was wearing adult shoes by the age of 12, hardly an adult? I still now people in their 30's who can wear kids shoes.
I would be much happier is this government did something about the ridiculous house prices which basically screw everything else up, no ability to spend or save because everything goes on a building to live in.
London has approximately 190,000 French expatriates, with approx 300,000 people who claim French citizenshipFACT
Not for nothing is it known as the 21st arrondissement... I suppose they're all here for the weather, eh TJ?
Although France (apparently) has at least half a million English expats, who are also most likely concentrated in the big cities like Paris. Who presumably don't go there to escape the high taxes of the UK?
because it is not a fact - it is an error... work it out for yourself, remembering to include NI in your status quo calculation.[b] jy[/b] - so its progressive but has switched the burden from the rich to the poor. I await an explanation from THM on this FACT and how it is a progressive change
[b]TJ [/b]-
Laffer curve is well known nonsense, we are not full of economic refugees from Germany and France despite taxation effectively being 10% or more higher there.
Any economic theory you don't like is presumably nonsense! I may be wrong about my details here but for most Germans the individual level of taxation isn't that different to the UK. (42% marginal rate for earnings 50-250 EUR ?) a German earning £100k (GBP equiv) pays 35% of that in tax, the same as in the UK French income tax takes into account the number of children and adults in the house, and I think tops out at 41%, even then only when an individual earns over ~EUR70k (or a household EUR280k)+their equivalent of NI.
So its not clear that there is really a 10% differential. Even if there is, only the highest earners are most motivated to move, but if they do they have a disproportionate effect, taking not only their own taxation but investment and jobs.
Whether even with a 10% differential a Frenchman or German would chose the UK as his preferred destination is even less clear.
And as I understand it Laffer doesn't just refer to movement of people but also the motivation for higher productivity. If "I" am earning £100k a year (I'm definitely not), and can work harder/smarter/more efficiently/take a bit of a risk with my career to earn £200k then my motivation for doing that is different if I actually get 70k to spend (as per proposed) or 50k to spend (as per status quo - assuming no 'loopholes excercised'). Apply that logic across whole companies and you start to see the effect on the ecconomy. Then companies say "British people are lazy / too conservative etc - lets move out operation elsewhere..."
However TJ, if Laffer is nonsense - why does the SNP want the ability to control corporate taxation? Why has no scottish government implemented tartan tax... ...i'll accept its an oversimplification but nonsense?
Although France (apparently) has at least half a million English expats, who are also most likely concentrated in the big cities like Paris. Who presumably don't go there to escape the high taxes of the UK?
Don't assume/presume... Unless you're in possession of the facts, you don't know, so it would be unwise to comment otherwise. Besides, I only know a few Brit ex-pats in France, and none of them live in big cities, it's small back country life for them all the way.
I would be much happier is this government did something about the ridiculous house prices which basically screw everything else up, no ability to spend or save because everything goes on a building to live in.
Quite literally the only modern day example of where something is worth several times more than the sum of its parts... The House! It's a bit ridiculous when you come to think about it, but then that's what can happen when everyone is sold the dream.
do we honestly think that taxing someone at 30% rather than 45% is going to make any difference? If the maths work, i.e. the accountants cost are less than the saving the tax is still not going to be paid.
How'd you work that one out? If the accountants wouldn't save enough money to make tax evasion worthwhile, then they'd have no choice but to pay the tax quite simply. No? 😕
you don't understand how flat tax works. The whole point is there are no loopholes in flat tax to let the accountant work their magic on. Everyone pays the same on all income (in this case above a threshold).Mr-Mo: do we honestly think that taxing someone at 30% rather than 45% is going to make any difference? If the maths work, i.e. the accountants cost are less than the saving the tax is still not going to be paid.
There's a part of flat tax that's very often overlooked - you also bin every single exemption, loophole and rebate. You pay the tax and that's that, which makes a lot of tax dodges impossible. If you take into account that the very rich often pay well below the headline rates, having a lower but much harder to dodge rate makes some sense.
I'm not saying that 30% is where the rate should be set, or even that a flat rate is particularly desirable. But overall, if you simplify tax, you make it harder to dodge, you can put taxmen, lawyers and accountants to an economically productive use...
Saying "stop the rich buggers dodging tax in the system we have" is all well and good, but if it were that easy (and there was a payback to it) then someone would.have already done it by now.
[quote=Zulu-Eleven said]I wonder how many NHS workers are higher rate taxpayers?
All the doctors, clearly, and the managers I wonder what proportion of Nurses?
I suppose they could take a bit of a pay-cut? I mean, if they're already in the wealthiest ten percent, then its not asking too much, is it TJ?
TJ will disappear into some kind of recursive wormhole after reading that.
there are always loopholes, you can say everyone pays x%, now prove what they earned? If you really think that you can implement a system where there are no loopholes....forget it, it isn't going to happen. Money can always be shipped off shore, through third parties, via companies, payment doesn't have to be in money etc.
That's why I said "which makes a lot of tax dodges impossible".
If you're really determined you can mess around with things like transfer pricing etc. but ultimately simplifying the system makes tax avoidance harder.
Its a giant tax cut, with proportionately more for the higher rate tax-payers, dressed up as a system change.
Read the report. We'd be down by 50 billion as a country. That's really going to sort the deficit.
For all the side arguments about what constitutes flat rate, progressive tax, or France, there's still no explanation as to how a further 50 billion pound deficit would help the country.
[quote=loum said]Its a giant tax cut, with proportionately more for the higher rate tax-payers, dressed up as a system change.
Read the report. We'd be down by 50 billion as a country. That's really going to sort the deficit.
For all the side arguments about what constitutes flat rate, progressive tax, or France, there's still no explanation as to how a further 50 billion pound deficit would help the country.
From the article:-
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.
Perhaps you missed the second sentence when you read the report ?
Well economic journals are normally so dry and challenging for a non-mathematician, so refreshing to read something contraversial that agrees with me that economics is best studied in the context of philosophy and politics. So instead of multiple regression there are chapters on utilitarianism, deontological ethics, virtue ethics, libertarianism and religious perspectives. Whatever one thinks of the conclusions, that makes for a more interesting read than normal. How refreshing.
allthepies - Member
Perhaps you missed the second sentence when you read the report ?
No, just not as gullible as you. 🙄
There's absolutely no evidence to back the empty promise of the second sentence.
If I said to you give me £50 billion now, even if you don't have it, and that will make you £35 billion better off in 15 years time would you trust me?
What if you were already in debt by over £100 billion a year?
Would that sway it for you?
Would you trust me more if I was a finance profesional?
They've never got it wrong before, eh?
.
Funny enough loum - that's happening pretty much already.
So Spain and Italy are forcing banks and pension funds to buy their debt at unattractive rates. Oh, and the banks don't have any money. Dont worry, the ECB will lend it to you. You couldn't make it up....the European ponzi swindle.
...but then professionals are investing OUR pensions to lend to the US government for ten years at <2% when US inflation is 2.5%. Thanks, here take my savings to subsidise the US government. And I pay you to do this??
The world is a funny place!!
JY - I am sorry, but I am not sure I understand the question you are asking.
Poor sidestep? Poor very poor. I really did expect more from you
because it is not a fact - it is an error... work it out for yourself, remembering to include NI in your status quo calculation.
It is an error [ the calcuations on how much we pay under this flat rate] because they only way they could do this was to have a shortfall of income tax raised under their system or else we would not all get a tax cut [ reduction in the % of the burden we pay]
If you use a flat rate tax and generate the same amount as now the poorer/less well off subsidise the wealthier . If the wealthier pay less [ the only reason to have this tax obviously] someone has to pay more so we get the same income from tax- this is obvious without doing any maths. I am sure the Tax Payers alliance know this as well hence the "shortfall"
Everyone pays the same on all income (in this case above a threshold).
Woah there woah there no they don’t remember it is progressive and the rich pay more ..stay on message FFS 😉
But overall, if you simplify tax, you make it harder to dodge
Possibly true but this does not necessitate a flat rate. i.e we can simplify the system without having just one rate.
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
I actually went to the report to see the maths behind the claim re debt and read the intro
It is time for Britain to make a vital choice. Our economy is stagnant, crippled by excessive public spending, a mismanaged and inefficient public sector, an extraordinarily complex and punitive tax system and a public mood that has become increasingly anti-capitalist.
So there you have it the whole thing is ****ed up and crippled because of the public sector [ not the private sector ] 😯 . It is like they are politically motivated or something. I mean seriously WTF would need to happen to get these people to think the current problems were caused by the private sector and the failings of capitalism if the current problems are not enough. Many on here have a political stance but FFS that is like me claiming Russia was the land of riches and milk and honey poured as every citizen lived in bliss and joy. I don’t think I can take anything they say seriously tbh Can I call them swivel eyed loons yet?
There was little in the summary to back their claims but it appeared to rely on modelling, growth predictions [ greater under their system] and reducing the “shadow economy” so forgive me if I remain unconvinced.
I read the summary I could not face the full report so I am sure there will be some maths there somewhere
And as I understand it Laffer doesn't just refer to movement of people but also the motivation for higher productivity. If "I" am earning £100k a year (I'm definitely not), and can work harder/smarter/more efficiently/take a bit of a risk with my career to earn £200k then my motivation for doing that is different if I actually get 70k to spend (as per proposed) or 50k to spend (as per status quo - assuming no 'loopholes excercised'). Apply that logic across whole companies and you start to see the effect on the ecconomy. Then companies say "British people are lazy / too conservative etc - lets move out operation elsewhere..."However TJ, if Laffer is nonsense - why does the SNP want the ability to control corporate taxation? Why has no scottish government implemented tartan tax... ...i'll accept its an oversimplification but nonsense?
Laffer isn't nonsense, however, all the theory really says is that at 0% tax and 100% tax, tax income is £0, and that somewhere in between there is a point at which tax income is maximised. I think everyone can agree that that much is true. Unfortunately no-one agrees what rate of tax is optimal, as it depends on a huge number of variables, including motivation of the work force, and attracting/putting off workers/businesses. Studies have found that anything from 24% to 70% might be optimal, depending on the particular situation they are studying, and of course on the bias of those doing the studies.
You are welcome to say that tax increases will actually decrease tax income, and others are can say that they wont. You will both be able to point to evidence (albeit flawed) to back up your point of view, but the reality is that no-one really knows until a long time afterwards.