it would mean less evasion and avoidance
higher drinking threshol and faster speed limits would also reduce criminality on the roads but only in tax do we bend to the will of the amoral rather than enforce the law.
Ok OTT but you get the point.
Flat rates favour the wealthy as they pass the tax burden to the "squeezed middle " [ assuming we have a 10 k + threshold
Of course they pay more 2.5k is 10 x less than 25k. You're the one being disingenuous. At what point has a person contributed enough or is there no limit to how much they should pay? It's also highly likely that high earners are using significantly fewer public services except, it would seem, those based in the tax office.
At what point has a person contributed enough or is there no limit to how much they should pay?
You're suggesting an upper threshold on total tax paid, ie a 0% upper rate? 😯
t's also highly likely that high earners are using significantly fewer public services
Your issue is actually people not getting back what they've paid for then? Presumably as the poor use more public services they should pay more?
Progressive tax rates, ie higher rates on higher incomes are pretty much universal even in Hong Kong and Singapore where the top rates at 15% and 20%. What this does is create a situation where the well off pay a disproportionately large portion of the tax burden. Many here seem to believe the "rich don't pay enough" but in the UK the top 1% pay nearly 30% of the income taxes. We already have a progressive tax system where the less well off have public services and welfare provided by others.
I see lots of comments above which concern me, statements like whether someone has worked "hard enough" for that extra £100k or whether it is fair they get paid so much. Those are impossible concepts to judge or to get any consensus on.
What we have to have, as @molgrips says, is a tax system which pays the bills. You can talk fairness all you like but if in trying to artificially create this mythical fairness (which frankly is like trying to find the Holy Grail) by redistributing wealth via the tax system you actually shrink the pot that's bad for all.
Those are impossible concepts to judge or to get any consensus on.
I earn (roughly) £8.50 an hour as an auxiliary nurse... let me think about it. 😈
The point being: you don't have to be an unreconstructed commie to view, say, the stratospheric rise in CEO pay as being entirely out of step.
Of course they pay more 2.5k is 10 x less than 25k
they also earn x10 less ergot they pay the same %.
You cannot ignore the % in a percentage based tax system and pretend your argument is not disingenuous.
In your view 1.01 % @ 250 k would still be them paying more than the person paying 10 % as this number was the highest - few would agree with your assessment.
is there no limit to how much they should pay?
There is no higher limit - are you really suggesting that say after £250 k tax they get all the rest ? Really ? No tax and yet poorer people have to pay tax
😯
@noteeth - sorry to be very controversial here (for the purposes of the discussion) but a fair society is one where you have freedom of choice for what you do for a living, I imagine you could have got into other lines of work which pay more ? That is a different question as to whether you are paid enough of course, wendyballers get paid a hell of a lot for kicking a football/opposition. The NHS has a budget of £130bn perhaps you can argue it should be distributed differently. Our tax system does protect you with a tax free amount before you start paying tax and you have access to all the other facilites like education, health care and if you need it welfare support in the same way as someone earning a lot more.
EDIT: Free movement of labour and offshore manufacturing have undermined wages at the lower end. That CEO is being paid a lot and in fact he's paying more tax for the same £1 than you would pay if you received it which is arguably "better for the country". You cannot fix pay differentials via the tax system. Do I think £8.50 an hour for an auxiliary nurse is too little, yes I do. However if you try and fix that by raising taxes on the "rich" what I fear you'll do is cut the size of the pot for all.
all wages do is show why the laws of supply and demand are a bit crap and less than perfect.
Footballers paid 300k per week whilst carers get the MW for unsocial shift work and weekend work- we can all explain it but I imagine none of us want to justify it [ bound to be someone who tries]
a fair society is one where you have freedom of choice for what you do for a living
Of course, I agree entirely - I'm not bemoaning my choice of career (or even, tbh - the pay... having days-off midweek & riding empty trails is the pretty much the best compensation ever). But the "justification" for stellar salaries is often, in my view, [i]very[/i] weak & rarely stands up to scrutiny - not least the brightest-and-best BS that gets slung around. It's not simply a matter of shrugging one's shoulders and claiming that it is impossible to get a consensus on these things - the relationship between effort/supply/demand in executive pay is utterly borked.
[i]You've just made an extra £50k FFS[/i]
But you may have earnt 1,000,000 extra for your company, hence the bonus. Then as well as paying their liability on your bonus, they'll be taxed on that extra million profit, too.
😯
[i]Who says it's not for me?[/i]
Whoops! Me, I won't vote for you, in anything other than the STW whingey leftite competition and even then, I'm not sure you'd win, you've plenty of stiff competition.
😉
[i] Instead of robbing the rich, think of it as not robbing the poor, and it makes much more sense.[/i]
So you're still missing how having the rich around, actually helps the poor, who all need jobs. The Rich contribute to an economy in some mysterious way other than paying lots of tax, or leave, as we've seen in France. How many Lamborghini sales men have you ever employed? I'd love to employ one for a day, but I can't afford a Lamborghini.
[i]I'm not a wealth-hater, all I want to do is make sure the lower and middle incom brakcets are well looked after, and public services are good.[/i]
Pick one! As funding [i]better[/i] public services, by its very nature, is a direct drain on my income at source, ie, tax. Furthermore, if you ( and me) want better incomes for the lower and middle income brackets, then surely this is the burden the employer / shareholder should face by paying correct wages, rather than have those wages subsidized with tax payer £s.
[i]TG - that's you, you worked hard. Lots of other people work hard, and get paid far less.[/i]
Bet most of the people on that 1:05am train weren't still in their office clothes from the previous morning though... There's working hard and there's having no life and probably shortening whatever life you might have. Working like that. So why no a bonus.
I asked a question I did not suggest anything. It seems to me that if a millionaire is paying several hundred thousand in tax, perhaps also owning businesses doing likewise and then, through their spending, adding more revenue through VAT that they have made an adequate social contribution. My question was rhetorical, tax is for making provision of shared services and providing social security so at some point someone will have paid more than enough toward the general good. To then take their money because "they can afford it" is what thieves say..
[i]at some point someone will have paid more than enough toward the general good to take their money because "they can afford it" is what theives say.. [/i]
At which point, the continous tax grab becomes a morally questionable activity.
Except they still have a progressive taxation system, which is what THM is actually suggesting there are arguments against. We also have a progressive taxation system which does (by some measures) work.
There are for some. We do indeed, but it is overly complex and inefficient to run. Needs major reform.
Can I just check, are we simply arguing over how high the upper tax rate should be set to maximise revenue, or are there others who have an ideological stance on this (such as that progressive taxation is a bad thing - tell us how you really feel THM).
The first thing "may be" setting the rate at a level where you will maximise revenues. This is not ideology it's mere practicality. As discussed above this depends on tax income elasticity (e) and there it is difficult to calculate with precision. In the UK it is between 40-50%.
yes you did hence why we both got your position correct - deductive logic innit.
at some point someone will have paid more than enough toward the general good to take their money
Can I assume this is your answer and it was exactly what aracer and myself said
Given that why did you bother with that tone and start?
because "they can afford it" is what theives say..
I would say they dont need the money - do thieves say that as well?
You are just being emotive now.
So Proudhon was wrong property is not theft but taxation is ..you are the tea party and I claim my sarah palin memorable flag sticker pack.
Mol - what has effort to do with it?
That's my point.
I am OK with progressive tax with a sensible maximum threshold. Ideally around 30-35%
Wait, I thought it wasn't for any of us to decide?
Simple maths - A person earns 250k and pays 10% tax = 25k tax paid
A person earns 25k and pays 10% tax = 2.5k tax paid.
It's about affordability. 25k from a person earning £250k is peanuts, but £1000 from a person earning £10k is much more onerous.
We do indeed, but it is overly complex and inefficient to run.
Are you seriously suggesting the presence of a higher tax band is what makes it complex and inefficient? Don't talk rubbish. Tax allowances are far more complex, but you aren't arguing for the removal of those are you?
It's an emotive subject. You're claiming that it is fair to tax the wealthy at a much higher rate than others. You further suggest that arbitary decisions can be made as to how much wealth is appropriate for a given individual.
I disagree. Aligning me with Sarah Palin, really?
It's about affordability. 25k from a person earning £250k is peanuts, but £1000 from a person earning £10k is much more onerous
Despite quoting me in the same post you ignore the sensible theshold I mentioned. I do not agree a 10k earner should pay tax.
As to 25k being peanuts,it's still 10x more than the other person in my example.
[i]It's about affordability. 25k from a person earning £250k is peanuts, but £1000 from a person earning £10k is much more onerous.[/i]
While not sticking to the original example given. Based on personal experience, I fear that 25K may be a significant way short of what Mr/Mrs 250K would actually pay, here in the UK.
Does anyone actually have a reasonably judged figure, total payable take in the UK for 250K?
Might I make a small modification to:
[i]at some point someone will have paid more than enough toward the general good to take their money because "they can afford it" is what theives say..[/i]
towit:
[i]at some point someone will have paid more than enough toward the general good. To take their money because "they can afford it" is what thieves say..[/i]
Are you seriously suggesting the presence of a higher tax band is what makes it complex and inefficient? Don't talk rubbish. Tax allowances are far more complex, but you aren't arguing for the removal of those are you?
+1 - it's not the tax system being progressive which makes it complex and inefficient - that's all the allowances for various things, where the tax system is used to attempt to modify people's behaviour. Not really what the tax system should be designed to do IMHO. I am unconvinced that having more than one tax band in itself makes a huge difference to the cost of administering the system nor that it makes evasion and avoidance more likely.
In the UK it is between 40-50%.
That's a pretty definitive statement. Not 51% or 52% then? So you reckon the current upper rate is too high?
[i]klumpy - Member
Might I make a small modification to:
at some point someone will have paid more than enough toward the general good to take their money because "they can afford it" is what theives say..
towit:
at some point someone will have paid more than enough toward the general good. To take their money because "they can afford it" is what thieves say.. [/i]
YIPPEE!!! We're all going to Live!
I already had! Typo on my part.
You're claiming that it is fair to tax the wealthy at a much higher rate than others.
Let's do this again. I'm claiming that it's fair to tax the poor at a lower rate than the wealthy. Is this something you disagree with?
You further suggest that arbitary decisions can be made as to how much wealth is appropriate for a given individual.
Arbitrary decisions have to be made. Of course it won't be absolutely "fair" for everybody, but I don't think most sensible people would dispute that a progressive tax system is more fair for more people than one which isn't.
That's a pretty definitive statement. Not 51% or 52% then? So you reckon the current upper rate is too high?
Yes. And not just me, that is where the current analysis suggests. It's all available online 😉 even at the HRMC
Are you seriously suggesting the presence of a higher tax band is what makes it complex and inefficient?
No so don't suggest this. I do know that we have an overly complex and inefficient tax systems in the UK that serves it's purpose poorly. Google Mirlees Report.
Don't talk rubbish.
Cheers I am not. Nice and polite BTW.
Tax allowances are far more complex, but you aren't arguing for the removal of those are you?
You tell me, you seem to enjoy saying what I am saying and not saying!
[i]Let's do this again. I'm claiming that it's fair to tax the poor at a lower rate than the wealthy. Is this something you disagree with?[/i]
Nope..... But where do you stop hittin-up the [i]Riche[/i].
No. I agree, to a point.
No so don't suggest this.
In which case:
it is overly complex and inefficient to run
is whataboutery. We were discussing the general principle of a progressive taxation system with more than one tax band - do you agree that this isn't in itself complex and inefficient?
No. I agree, to a point.
Good. You do realise that one is a corollary of the other?
But where do you stop hittin-up the Riche.
I think most on this thread agree somewhere between 40% and 75% (I suspect we could narrow it down more, but I'm not confident by how much).
As to 25k being peanuts,it's still 10x more than the other person in my example.
Yes, but if the £250k person paid £30k instead, they would barely notice. Their life would still be fine and dandy. They would still be taking foreign holidays, driving Audis, educating their kids privately etc. Whereas even an extra £1k for the £25k person would go a long way towards helping them take holidays with their kids, maybe even go to a foreign country, perhaps use a bit of language... maybe it'd buy the kid a decent bike so they could compete well at local races and be picked up by Team GB talent scouts.. maybe they could use it to take their kids to atheltics meets where their talents could shine. Perhaps they could have a week in London where the Science Museum inspires them to a career in science where they make a great discovery.. etc etc.
Maybe the other £4k of Mr £250k's pay packet could help pay for a nurse, or another teacher for the local school, and so on.
Money in the hands of the state CAN do far more good than in the hands of individuals. CAN, of course it doesn't necessarily always as we know.
is whataboutery.
One man's whataboutery is another man's discussing the exact situation we face.
We were discussing the general principle of a progressive taxation system with more than one tax band
Sorry I thought we were discussing France's broken tax policy and lessons to be learned. My mistake. Carry on....
We did principles of taxation last week BTW.
I think most on this thread agree somewhere between 40% and 75% (I suspect we could narrow it down more, but I'm not confident by how much).
It's all there you just have to know where to look. Ever wonder why labour didn't raise MRT to 50% before. Despite appearances to the contrary, they were not stupid.
[i]I think most on this thread agree somewhere between 40% and 75% (I suspect we could narrow it down more, but I'm not confident by how much). [/i]
Thank you. For my part, much closer to 40-something% although I'm still undecided at where to set the threshold for that 40% to kick in.
Edit:
I was refering to personal tax, not CT.
Of course I completely agree, I'm not a monster. I honestly believe that collecting UK corporate tax from companies like Starbucks, Google, etc would make a considerably bigger impact on revenues than soaking the wealthy, which I feel is more of a smokescreen for the ineptness of our governments ability to do so. I expect (but really can't prove right now, sorry) that corporate avoidance is worth much more than even raising the highest tax band to 50%
Sorry I thought we were discussing France's broken tax policy and lessons to be learned
The argument seemed to be that because France's tax policy was not working that progressive taxation as a concept was wrong. That's what we're arguing against.
Jools - Starbucks paid theirs, but yes you make a good point. It's not an easy fix mind.
The argument seemed to be that because France's tax policy was not working that progressive taxation as a concept was wrong.
Oh, missed that bit.
That's what we're arguing against.
As you were then
I may start a religion thread soon, based on Ben Affleck being a bit out of his depth last week.
Oh, missed that bit.
Presumably you didn't read what I was replying to (which I quoted and you snipped) when you quoted me to start this particular little thread then? 🙄
I'll include your comment which Mr Woppit was replying to (which I snipped - yes I know it's complicated) for context (my sic)
There are plenty of sound arguments why taking higher propositions (sic) from higher earners is neither morally or legally better
Putting aside what may or may not be "legal" or "moral" and focusing on what may be practical, I direct your attention to the opening post. The French tried this and it didn't work.
[i]Putting aside what may or may not be "legal" or "moral"[/i]
Well.
[i]to introduce a 75% tax rate on earnings over 1m euro (£800k) which was initially [b]ruled illegal[/b] (confiscatory, ie [b]stealing[/b])[/i]
Don't argue with them French Judges.
Just to go to Solo's question, back of the envelope
£250k earnings is roughly £110k in taxes (note someone on that amount has no tax free personal allowance, effectively their first £10k is taxed at 47%). Also their employer will pay about £40k in employers NI.
The person on 25k pays £6k in tax and NI
So the 250/25 ratio is 10x pay and the tax ratio is 18x and that's without the employers NI. The high earners pay a lot and out system is very progressive already.
Of course I completely agree, I'm not a monster. I honestly believe that collecting UK corporate tax from companies like Starbucks, Google, etc would make a considerably bigger impact on revenues than soaking the wealthy, which I feel is more of a smokescreen for the ineptness of our governments ability to do so. I expect (but really can't prove right now, sorry) that corporate avoidance is worth much more than even raising the highest tax band to 50%
@jools I agree with this. Apple/Google/Starbucks/Amazon/eBay/Facebook/etc pay very little UK corporation tax despite making lots and lots of profit here (all diverted via Ireland/Luxembourg and an abuse of EU tax treaties)
So the 250/25 ratio is 10x pay and the tax ratio is 18x and that's without the employers NI. The high earners pay a lot and out system is very progressive already.
Sounds fine to me, but then I'm not arguing there's anything that wrong with the current rates.
Apple/Google/Starbucks/Amazon/eBay/Facebook/etc pay very little UK corporation tax despite making lots and lots of profit here
I think we'd all like them to pay more - the question is how do you propose to do that?
jambalaya - Member@ernie, everyone on the left expect the tax to be extended
😀 Don't be so daft, very few on the left expected Hollande to extend it. In fact until it was actually implemented most on the left remained unconvinced that Hollande had any real commitment to the election pledges he made.
Everyone knew full well that the announcement of the 75% tax policy was a panic measure by Hollande because the far left candidate Jean-Luc Mélenchon was polling strongly and drawing support away from him.
It was an attempt by Hollande to appear left-wing, credible, and radical, three things which he certainly isn't. Most people, certainly those on the left, expected him to try and wriggle out of the commitment. Making it a two year temporary emergency tax was the best compromise that Hollande could come up with.
And as you quite rightly point out jambalaya Hollande is now deeply unpopular with the French electorate. Obviously this wasn't always the case otherwise he wouldn't have won the presidential election.
In 2012 he stood on a supposedly left-wing ticket and he received the approval of the majority of the French electorate. Since then, as THM quite rightly points out, Hollande has preformed numerous U-turns (letting the 75% tax expire as he said he would 2 years ago obviously isn't one of them)
He has in fact moved more and more to the right. Has this translated into greater approval ratings ? Not at all in fact the complete opposite, ie, he is now considerably less popular than when he was pretending to be left-wing.
I think we'd all like them to pay more - the question is how do you propose to do that?
local turnover tax as a corporation tax floor (say 1-3%, industry specific) to a profit tax.
OR EBITDA tax floor (say 5-10%) so as to exclude accounting engineering wrt interest and depreciation.
I think we'd all like them to pay more - the question is how do you propose to do that?
Perhaps we need a new thread 8) or perhaps not !
I would have a special taxes, offsetable against taxes paid in the UK (ie to encourage them to have UK employees). So an online sales tax (Amazon/eBay) plus a tax on advertising revenue based upon users/views etc (Google/Facebook). Apple/Starbucks are a bit trickier but I would not allow them to tax deduct intellectual Property/Brand costs (Starbucks) or have dubious transfer pricing (Apple). The toughest part is that the EU tax rules have allowed huge abuses by certain countries, primarily Ireland and Luxembourg. For the sake of creating a few 100 jobs in Cork Ireland has allowed Apple to dodge billions in taxes which should be due in other EU states.
He has in fact moved more and more to the right. Has this translated into greater approval ratings ? Not at all in fact the complete opposite, ie, he is now considerably less popular than when he was pretending to be left-wing.
Though how do you know that he wouldn't be even more unpopular had he carried on pretending?
Their high net worth earners are fleeing the country and their economy is (not surprisingly, except for perhaps the most fervent believers in the Magic Money Tree) down the crapper.
They went to Belgium. They came to the UK. So will they go back? How much of an effect on us will them pulling their money or their business out have?
Anyone care to comment?
@ernie - well all the well off French I know knew they would try and extend the 75% and I think the average left wing voter had no idea it was limited to 2 years. This is based on talking to people so I appreciate it's anecdotal. Hollande was elected as he wasn't Sarkozy. Cameron was elected as he wasn't Brown. Most countries had a switch post the financial crises, it didn't matter if it was left or right. Hollande has moved his policies as that was the correct thing to do (and he is being told to by the Germans). If being financially prudent is a right wing policy then he moved to the right (your comment) but knowing you shouldn't spend more than you earn shouldn't be seen as a left vs right policy.
Frankly it doesn't matter which way he moves - droite ou gauche - like everyone else he is constrained but the same issues. Excess leverage affects fiscal policy (gov debt levels perceived as being unsustainable) and monetary policy (banks still need to de leverage further therefore making monetary policy largely impotent) so that leaves supply side reforms. They are great - how do you produce more for less - but they take time. No politicians magic button.
So as M Lagardere noted the other day - Europe faces a long period of low/non-existent growth ahead. The € is the elephant in the room at the core of all this.
