[Closed] Democratise the tax system?

From my memory when folk were actually surveyed on this defense spending would be dramatically reduced and NHS increased

Say at the end of every year you get a form where you can specify I want to pay more to such and such as a percentage.

Do we get to say what we would like to pay less to as well?

People are generally selfish and short sighted. Government spending needs to be neither....

19 pages, you supply the biscuits.

Nin. Well the exact system is up for discussion. something like 50% goes where the government wants. 50% goes where you want. Surpluses revert back to government control.

So you've got control of 50% of your tax to send anywhere you like.

People are generally selfish and short sighted. Government spending needs to be neither....

This. If tax was voluntary people wouldn't pay.

OP you can democratise "tax" as the Americans do and make charitable donations 100% tax deductible. That's why their Universities are so well funded. People donate to their old colleges so that they can provide scolarships.

But what do you see as the good and bad to such a system?

The bad:

It gives direct democracy direct control of the purse strings

because

People are generally selfish[b], ill-informed[/b] and short sighted. Government spending needs to be neither....

you supply the biscuits.

I demand biscuits as an inalienable oooman right! The government should provide biscuits for all.

and make charitable donations 100% tax deductible.

They already are.

footflaps - Member
People are generally selfish and short sighted. Government spending needs to be neither..

True people are selfish, but when funding dries up for something like want they'll soon think about it a bit more.

Surpluses revert back to government control.

is where the idea falls before it starts

but perhaps like in Scotland where I am told that it is too expensive to administer a simple rise in taxes*, this idea might be a bit expensive to run!!

*unreliable source mind

Thm, reign it back fella no need to turn this into yet another of your personal attacks on Scotland! 😆

How's about I just keep 50% of it instead?

I'm all for it, but If we did democratise the tax system then it's easy for popular stuff like the NHS, but how do you think things like prisons and international aid would fare? Public sector pensions policy should be fun...

teamhurtmore - Member
Surpluses revert back to government control.
is where the idea falls before it starts

What wouldn't you protect?

There is no way 50% of the tax bill is flexible year on year.

Sorry it would be a distaster

What wouldn't you protect?

The £350 million a week we send to the EU!

CFH - sorry - no biscuits left
[img] [/img]

There's a difference between democracy and a popularity contest.

[quote="seosamh77"]

Thm, reign it back fella no need to turn this into yet another of your personal attacks on Scotland!

*s****s* He does have an odd obsession doesn't he.

Methinks the gentleman doth protest too much

Maybe 50% is too much. However, if you could choose exactly where the final 5-10% of your taxation went it could be taken by government as a very accurate social indicator of how their own financial policy should be developed.

This is already happening. Direct taxation has been dropping, and Indirect taxation, VAT as an example, on something you decide whether to purchase, or not.

The £350 million a week we send to the EU!

Can't protect something that only exists in your mind.

welshfarmer - Member
Maybe 50% is too much. However, if you could choose exactly where the final 5-10% of your taxation went it could be [b]taken by government as a very accurate social indicator of how their own financial policy should be developed[/b].

This is fair comment, and the latter part in bold is really where I guess the point of this thought lies. With the likes of brexit, it was extremely obvious that it's very easy for people to try to use public opinion to their own ends, but this just seems to be what the percieve to be public opinion. They just take bits of a manifesto, and promote their own agendas, there's no real scientific way to measure what people actually wanted at the end up.

Now, I'm for democracy, but, I just think that it's too easily manipulated and if we are going to say we are democratic, we should at least take people views on a range of subjects, democratizing the tax system is just one idea of expanding democracy away from manipulative proxies..(not something you'll every completely eliminate, I'll concede.)

When asked most folk are willing to pay more tax to have a better health service. However the tory government prefer taxcuts for their friends

So you've got control of 50% of your tax to send anywhere you like.

No point as the govt will just spend the remaining 50% on what you don't want, possibly even causing more resentment.

Budgets might also change rapidly - imagine a long term project like, say, HS2. Might get funding for the first couple of years then the doubts set in and the populations yanks the chain and it collapses with no funding. If the govt 50% is just funding the long term stuff then it'd be even worse depending on 'popular' votes for certain budgets.

The issue would be where you get a far-right leaning national newspaper (hypothetically speaking), which has a long standing campaign to end foreign aid because we should spend it on our elderly for example. But the hypothetical fans of far-right goose-stepping and black shirts manage to avoid paying a wedge of tax in the UK.

But the public still falls for the argument everytime, because as has already been pointed out, we're selfish and not in full possession of facts.

As for me, the NHS, social services etc would get loads, but I wouldn't want to spend a penny on the Queen, rebuilding the houses of parliament or Trident Mk 2.

When asked most folk are willing to pay more tax to have a better health service.

When asked, most folk [I]say[/I] they are willing to pay more tax to have a better health service. However, when they are asked to put their c0ck on the block, i.e. vote governments in, they vote for the ones, generally, who promise the lower taxes.

Because, and this is the general point, people are idiots.

Thm, reign it back fella no need to turn this into yet another of your personal attacks on Scotland!

not an attack at all - an unreliable source told me that yesterday, I was just passing it on.

We have a simplified version of this anyway. Most governments raise the same amount of tax. But they do it slightly differently and then they allocate it slightly differently too. So you know that the nasty Tories have a triple lock on their spending which means that other areas suffer. If you dont want spending on the NHS and state pensions protected you simply vote for someone else.... 😉

Do we need any more complexity?

tjagain - Member

*s****s* He does have an odd obsession doesn't he.

Says THM's own personal stalker.
If I didn't know better I'd say your juvenile churlish behaviour was probably down to a playground crush. 💡

welshfarmer - Member

if you could choose exactly where the final 5-10% of your taxation went

I don't think 5-10% of my tax is going to do anything other than highlight how
little I (financially) contribute to society. 😆

Can I vote 10% of my tax bill is given back In the equivalent tax allowance

Ideally the U.K. Needs to take norways lead and publicise all tax returns,
Only those with something to hide must be against

Although it shows the taxpayer exactly who has looked ;0(

Ideally the U.K. Needs to take norways lead and publicise all tax returns,
Only those with something to hide must be against

I've suggested that on here before, it didn't go down well.

and make charitable donations 100% tax deductible.

They already are.

A policy introduced (well significantly expanded) by Gordon Brown if memory serves. Nice to see Jamba is a fan.

I had a similar discussion with my (American) sister in law recently. She suggested the needy should be supported by charity not by the government.

The issue with that is that people will give to whatever they feel is worthy, and not give to what they don't. So for example heroin addicts would probably get nothing, but we'd probably have fantastic government funded stray dogs' homes.

Government *should* be informed by academic research and science. Not whim and sentimentality.

There's a difference between democracy and a popularity contest.

The evidence seems to suggest otherwise. 🙄

The first thing that springs to mind when you give people control of where they want their taxes spent is the unofficial STW motto: "Coke and Hookers!"

footflaps - Member

People are generally selfish and short sighted. Government spending needs to be neither....

This,

When I worked in Finance and later for an Accountancy Firm I spoke to lots of people about Tax, and not many of them thought it was fair.

"Why should I pay 50% of my income in tax, it's a tax on working hard!"
"Why should my company have to pay tax, I could spend that on wages!"
"Why should I pay tax on my pension, I've already paid tax on it"
"Why should I pay tax at all, I'm always skint".

Etc etc etc.

You'd be AMAZED at how many people genuinely think they're special, it's unfair, how almost by magic, the method of taxation they think is fairest and would even mean everything is better for everyone - is the one that would benefit them personally.

Oddly, I've met a surprising number of people who moan about it, but don't understand it - I know a few people for example who think that if they hit the 40% bracket, even by a penny, they have to pay 40% on every penny they earn "Why bother? they only take it all, it's a tax on working hard" blah blah blah, when I tell them it's only on the bit that earn over the threshold and in actual fact because their national insurance contributions drop off at the same threshold their income tax raises it's not a 20% hike, it's 12% and because it's only the bit at the top the total change in rate of deductions is usually sub 3% it's like I've shown them how to turn lead into gold.

There are very, very few people I'd trust to act unselfishly when it comes to taxation - but then I don't trust Westminster either - I am absolutely certain that our complex taxation system and continually change is as much about keeping us all arguing about income tax as it is making it 'fair'.

Whilst we're all arguing about income tax, we're not arguing about the top 1% who pay little, or none - because we tax income and not wealth.

because we tax income and not wealth.

sBob - I know black is white in your world but I block his posts. He makes snide comments after mine. I don't read his nor do I reply to them. That one only came to notice because someone called him out.

so who is the obsessed stalker?

tjagain - Member
someone called him out.

Norway publishes how much each person pays in tax each year- I wonder if people would get competitive?

sBob - I know black is white in your world but I block his posts. He makes snide comments after mine. I don't read his nor do I reply to them. That one only came to notice because someone called him out.

so who is the obsessed stalker?

Give it up Teej, you've only just got back.

Why should my company have to pay tax, I could spend that on wages!"

People are generally selfish and short sighted. Government spending needs to be neither....

I can't remember what the economic principal is called, but it's the one explained by "why do people order expensive steak at a restaurant when in groups"?

Go to a restaurant on your own a steak is £20

Go as a group and it's only x + [(y-x)/g]

x = average meal price
y = price of steak
g = number in the group

The same would apply to voluntary tax.

I'm in favour of higher taxes, but they should be mandatory, otherwise people will avoid them, just like most people opt out of PAYE and become contractors as soon as they earn enough to justify the cost of an accountant.

When I worked in Finance and later for an Accountancy Firm I spoke to lots of people about Tax, and not many of them thought it was fair.

"Why should I pay 50% of my income in tax, it's a tax on working hard!"
"Why should my company have to pay tax, I could spend that on wages!"
"Why should I pay tax on my pension, I've already paid tax on it"
"Why should I pay tax at all, I'm always skint".

Etc etc etc.

You'd be AMAZED at how many people genuinely think they're special, it's unfair, how almost by magic, the method of taxation they think is fairest and would even mean everything is better for everyone - is the one that would benefit them personally.

Oddly, I've met a surprising number of people who moan about it, but don't understand it - I know a few people for example who think that if they hit the 40% bracket, even by a penny, they have to pay 40% on every penny they earn "Why bother? they only take it all, it's a tax on working hard" blah blah blah, when I tell them it's only on the bit that earn over the threshold and in actual fact because their national insurance contributions drop off at the same threshold their income tax raises it's not a 20% hike, it's 12% and because it's only the bit at the top the total change in rate of deductions is usually sub 3% it's like I've shown them how to turn lead into gold.

There are very, very few people I'd trust to act unselfishly when it comes to taxation - but then I don't trust Westminster either - I am absolutely certain that our complex taxation system and continually change is as much about keeping us all arguing about income tax as it is making it 'fair'.

Whilst we're all arguing about income tax, we're not arguing about the top 1% who pay little, or none - because we tax income and not wealth.

Well informed post, not what was called for

Back to the random spouting folks

PS tried to explain student loan repayments the other day. 9% of everything over £21,000 a year.

"What I'm paying 9% of 21,000 a year that's loads....."

Norway publishes how much each person pays in tax each year- I wonder if people would get competitive?

Strava do a tax app in Norway. You get little stickers for your car depending on how much tax you pay.

sbob - have you not heard?

The problem with making tax a choice is that most people think that somebody else should pay the tax. Or, at best, that they would agree to it if and only if it was spent on exactly what they think.

"Higher taxes are OK as long as they don't apply to me" is the approach taken by the man on the street.

Most people are blissfully unaware of where public money is spent.

when I tell them it's only on the bit that earn over the threshold and in actual fact because their national insurance contributions drop off at the same threshold their income tax raises

Except if you are Scottish, we are going to have an effective 52% marginal rate band because this doesn't happen 🙂 It will affect my tax planning - as high marginal rates generally change behaviours more than government revenue.

Except if you are Scottish,

Sshh, grumpy!

You are correct about the man in the street though and the lack of understanding over where money is spent - hence the fact that Brexshiteers can scaremonger over benefits etc

I don't think people would actually support increased taxes for the NHS, or any other bit of public spending. Sure if you ask people "should there be tax increases to pay for NHS" a lot of people will say yes. Change the question though to something like "what tax increases are you prepared to pay to increase NHS funding" and I think you'd get a different answer. People support tax increases on other people, not themselves just like people want benefit cuts so long as they aren't affected. Two sides of the same coin.

As for the Norway example, their society is very different so what works there probably is wouldn't work here.

As for the Norway example, their society is very different so what works there probably is wouldn't work here.

large are country, huge natural resources including oil wealth, small population. Get really bored of people thinking that with the odd tweek we could be like them

When you suggest putting up taxes, people say 'ah, they should just stop wasting it' with no oversight as to how much wastage there is or how one might achieve this goal; or they say 'why do we give money to X thing I don't like or understand when we should give it to Y thing I do like?'

The problem with hypothecated tax is that individual taxpayers will naturally favour whatever benefits them, either from reduced financial outlay or increased spending on schemes that bring them benefits.

e.g.; Cyclists will be more inclined to pay for improved cycling infrastructure than non-cyclists. Would be viewed as a waste of cash by many others. Daily Mail readers would be happy to pay more to provide care for their white grans but not brown muslims etc. Few will wish to pay for the sizeable emergencies planning and logistical arrangements required of the military, NHS, Local Authorities and other ministries that are there performing low key but essential functions.

Sometimes you just have to pay up and let those who actually understand the details to allocate the funds.

downshep - Member
Sometimes you just have to pay up and let those who actually understand the details to allocate the funds.

That's a nice pipe dream! 😆

Joe - would you offer tax rebates for those who withdraw from using some services?

As its such a good idea, I am prepared to kick off by doubling the amount I pay in road tax next year.

When asked most folk are willing to pay more tax to have a better health service.

They'll say that but they won't vote for it. Talk and a few facebook likes are cheap, free in fact. Voting for it costs money.

Scotland has a chance to do that right now, put upmtaxes and spend the lot on the NHS. I'll watch to see how the SNP get on with that.

Nah, whatever the tax rates or bands, you don't get to keep your tax for yourself, you need to allocate it somewhere.

i think an all out wild west style system would be out, as well, people can be ****s.

Still I think the idea does have some merits, if on a limited basis.

Scotland has the chance to do some marginal fiddling with income tax in which any rise in rates will be expensive to administer and raise very little. (unless they increase tax on lower earners as well) they do not have the power to revise the system in any significant way

tjagain - Member

so who is the obsessed stalker?

Did I just read that right?
Did a grown man actually just come out with "[i]I know you are but what am I?[/i]"?

Jesus wept.
This is almost as embarrassing as that gushing whinge on the EU thread.

let it be sbob

Scotland has a chance to do that right now, put upmtaxes and spend the lot on the NHS. I'll watch to see how the SNP get on with that.

They politely declining this afternoon, something to do with the Laffer Curve or something like that....

Scotland has the chance to do some marginal fiddling with income tax in which any rise in rates will be expensive to administer and raise very little. (unless they increase tax on lower earners as well) they do not have the power to revise the system in any significant way

Their calculation was that raising the top rate to 50% would cost £30m in lost tax. Scottish Labour think it would raise £100m (Leader on TV earlier). So who is right ?

They politely declining this afternoon, something to do with [s]the Laffer Curve[/s] [b]Westminster[/b] or something like that....

FIFY

jambalaya
Their calculation was that raising the top rate to 50% would cost £30m in lost tax. [b]Scottish Labour[/b] think it would raise £100m (Leader on TV earlier). So who is right ?

Who? Surely you mean "Labour"

twicewithchips - Member

Why should my company have to pay tax, I could spend that on wages!"

amused me.

I should point out this is what Tax Moaners have said to me, not my point of view.

There is a section amongst owners of small businesses who'd quite like a medal for their efforts. They see themselves as the benevolent kings of commerce – they work harder than anyone else in the history of the world ever to sole-handily build their business from nothing – their only reward is to know they’re supporting their staff. They will, quite often, tell you that they pay the mortgages of their entire work force as if they pop down the building society each month with bags of notes personally and feed their kids for them whilst their staff laze about in hammocks all day.

These Heroes of the SME market would love to do more, pay their staff more, employ more, get better houses for their staff and more comfortable hammocks, but they can’t because “the Tax Man” wants 20% of their profits.

I do struggle to believe them though, Human Nature being what it is whilst they could employ more people or pay the ones they have more which would remove their tax liability but.. when shove comes to push the money usually ends outside in their reserved parking space or on some ghastly 7 bedroom self-build.

teamhurtmore - Member

let it be sbob

Sage advice.
To the adult place! -> 😀

Maybe 50% is too much. However, if you could choose exactly where the final 5-10% of your taxation went it could be taken by government as a very accurate social indicator of how their own financial policy should be developed.

Still I think the idea does have some merits, if on a limited basis.

Sure if you ask people "should there be tax increases to pay for NHS" a lot of people will say yes.

Well there is an element of truth in what they are saying. Companies do not pay taxes - their customers, staff and shareholders do, to varying degrees of course.

Whats the point of 'democratic' taxes if it's only 50%. I could say use 'my' 50% to fund, say, the NHS and education only as I disagree with defence spending. The govt will just turn round and use 'their' 50% on defence. I don't see how I (or anyone) really benefits at all. Apart from the people (and IT companies) employed to handle this new way of working.

downshep - Member
Sometimes you just have to pay up and let those who actually understand the details to allocate the funds.

Who actually understands it though? I doubt the civil service understand the strategic level and politicians of all parties are tainted by their own ideologies rather than taking any sort of evidence-based approach.

Their calculation was that raising the top rate to 50% would cost £30m in lost tax. Scottish Labour think it would raise £100m (Leader on TV earlier). So who is right ?

You have to make assumptions about behaviours when you change tax rates. Change the assumptions and you change the outcome.

I imagine the SNP have, perhaps reasonably, decided that people would restructure their finances or relocate to avoid the 50% rate. Labour could be being rather optimistically assuming that everyone stays put and pays up.

Indeed, I posted the link on the SNP's analysis above or on the SNP thread - more RW that the Tories!

But hats off to them for being explicit on Taxable Income Elasticity - far better explanation than any Osborne&Co managed. Oddly, they missed out the bit on cost of delivery and/or not making any difference. Not sure why?

@grumpy I was being a bit facetious, I agree behaviour changes. The govt is always doing it deliberately like increasing taxes on big polluting cars to discourage people from buying them.

Who? Surely you mean "Labour"

It was Kezia Dugdale the MSP and leader so I called her Scottish Labour which is ok ?

Anyway, democratic taxes won't work. If people want to give extra to the NHS just write a hospital charity a cheque or sponsor people raising money for things.

Grumpy sculler - plus the cost of collecting it which is huge. SNP allow for that, labour don't.

Very few people will be able to change their behaviour to pay less. This is high earners on PAYE not people paid in dividends etc. Hospital consultants, head teachers and so on. People will not relocate - they say they will but in reality very few would as the job does not go with them

TJ there is no way collecting 50% tax ffrom 17,000 people costs £130m (£30m + £100m) the difference is primarily due to changes in behaviour, ie people will move. The £150k+ pa earners are not consultants and head teachers they are primarily business people, financiers etc. It isn't the people earning £175k who move it's those earning £300k £500k £1m etc .. and the loss of all that taxable income is huge vs small gains from those earning (say) £150-£200k

This is what the "right wingers" in the SNP think (FWIW)

There is considerable uncertainty associated with estimates of the extra tax revenue which could be raised by increasing the additional rate of income tax in Scotland. [b]This reflects the uncertain, and potentially large, behavioural response [/b]which could be expected to impact on the yield from the policy.

These Heroes of the SME market would love to do more, pay their staff more, employ more, get better houses for their staff and more comfortable hammocks, but they can’t because “the Tax Man” wants 20% of their profits.

Really? Why do yo think that? You think a hospital consultant or senior reg will move? A head teacher? A senior charge nurse? Senior managers in private business will quit and chose unemployment instead?

People say they will move but in reality they will not.

the main problem is that the powers are too limited to actually make the system work properly.

In which case, why didn't the SNP simply say so?

Sorry Joe, this should all be on the other thread. But having a live example of this stuff does make it more relevant and interesting.

Jamba - you should also realise that nothing scottish labour says can be trusted to have any relationship to the truth. They claimed half a billion of cuts in the scottish NHS when the budget went up 3%

Everything Scottish Labour says has to be seen thru the lens of the Bain Principle

poly - Member
You could crudely say that we already have such a system - charitable donations

Charity isn't the same at all. I'm just talking about allocate tax to where you think it should go. Not saying you don't have to pay tax.

So put some more skin on the idea Joe

Assume a tax rate of 40% and that 30% is allocated in a standard way (as now). If I understand correctly, individuals could then allocate the final 10% as THEY see fit. If that is correct, would you include all current services in both categories? Could you simply allocate all of the 10% to the biggest part of the existing 40% etc.?

It was Kezia Dugdale the MSP and leader so I called her Scottish Labour which is ok ?

Thought that Corbyn bloke was the Labour leader? She's the most senior Labour MSP at Holyrood if that's what you mean - seems nice, but isn't really running the show now is she... bit like that Mundell fella.

This is a terrible idea. Have we learnt nothing from Brexit? You'd basically be handing power to the popular press like the Daily Mail. They'd just run a few scare stories about unemployed immigrants getting free boob jobs on the NHS and how we're at risk of a nuclear war with France or something and we'd have no tax for the NHS and loads for defence.

How many people are going to research the state of the country and come to a rational conclusion before deciding how to vote on these things?? no-one!

[url= http://www.independent.co.uk/news/uk/home-news/british-public-wrong-about-nearly-everything-survey-shows-8697821.html ]Another link to the story about the British Public being wrong about almost everything[/url]

Taxation in it's current form and given the manufactured divisions in society, it would just be fluffing round the edges of an already punitive system, leading to further tribal behaviour.

Is probably humanities biggest challenge and key to everything else. To go from adversarial, selfish and punitive to a more collaborative and inclusive existence. I'm sure it will carry on improving, will never be perfect, with some backward steps along the way.

Exposure of the hurdles and hurdle makers (not just the obvious targets in public office) will make the divisive manipulation more difficult to pull off and is probably where action is needed first IMO.