why do we still separate NI and Income Tax? Let’s roll them into one
Especially as it all goes into one pot along with VED, VAT, Insurance Premium Tax etc to pay out for NHS, Defence etc.
Unfortunately, governments have cottoned on to the loophole they can up NI to increase revenue and still claim they haven't put "taxes" up.
When I did my degree, Tax was one of the modules and covered some of the history of UK tax. Pre WWI, most people didn't pay any income tax, it was expanded to pay for the War debt.
I've seen a few articles about land tax. To my untrained (on matters of taxation) this seems like a pretty good idea.
Georgism seems worth further exoloration.
America was most prosperous in the 60’s, when the top rate of income tax was 91%. That’s where I’d start.
Though the problem now is that due to how much smaller the world is, especially from a financial standpoint, every country would have to do the same.
My 2p worth is that income tax and NI should not exist until earnings of £100k a year. At that point a rate of 51% income tax comes in
The problem with this is very few people earn over £100k, definitely not enough to run a country based on 51% of their income over £100k. People on the upper shoulder of the bell curve (i.e. above average but not into the 1% tail) in general seem to vastly underappreciate how well off they are compared to the ~80% below them*. And this give the illusion that actually they're 'middle' and therefore there's a lot of people earning £50k, £60k, £100k etc above them. Presumably it's down to being in a bubble where if you go out for dinner with friends most people probably do have "that one friend who's struggling" and "that one friend with two BMW's on the driveway" which gives the perception that whatever the reality is that you're both average, and that there's sufficient Peters above you to pay the Pauls below you, and you should pay nothing because you don't need to give or take anything. Ultimately it's always going to be that upper shoulder on the curve that collectively pays the most tax overall.
*a problem compounded by the fact that until you hit close to that average you're more likely to be living hand to mouth. Earn just a few percent more and suddenly you have disposable income. Being the 40th percentile makes you substantially better off than someone at ~60%.
I'd like to see an escalating VAT and corporation tax, and more "windfall" taxes. Make VAT on everyday stuff like £10 T-shirts 5%, then make it 30% on luxury equivalents like HebTroCo, the same way we differentiate between bread and chocolate. Make corporation tax 10% for companies with turnovers <£10million or where wages make up more than 50% of turnover, then escalate it to 40% for Starbucks, Apple, Amazon, Facebook, etc, where huge amounts of their 'costs' aren't the staff, it's paying some shell company in the Cayman islands for the right to use the logo or 10x the market rate for their special beans roasted in a tax haven.
And if companies egregiously flout the spirit of the rules, just impose a tax on them specifically. What exactly are Facebook going to do, withdraw their advertising platforms form the UK, starbucks aren't going to stop selling coffee because an arbitrary tax was put on "coffee profits repatriated to the Netherlands"?
I think the chart here explains it fairly well, although the actual figures and rates are slightly out of date (Sep22) the basics are still the same.
Look at the top green element which is take home pay.Over £125k, or between 50k and 100k you take home 58% of your pay, but there are anomalies such as between £100k and £125k where you only take home 38%.
Factor in the cackhanded reclaiming of child benefit that penalises high earners differently depending on how those earnings are divided between a couple, and also think that student loand repayments (which are in effect a tax) have a big impact for some as well, and the tax system is a mess.
My suggestions would be:
- merge NI and Income tax to make it clear that the tax rate over 12k is actually around 32% not 20%. This hasnt been done because people would be in revolt against such a high level of tax...
- sort out some of the cliff edge and bizarre impacts of polciies such as child benefot reclaim etc
- bring in taxation of housegolds, or drop polciies such as child benefit reclaim, student loan eligibility etc that use household income when it suits the government, and individual income elsewhere. I think Frnace taxes at the household for example
- be clear that student loan repayments are a graduate tex. That additional 6% of your income (and an additional 9% for masters and above loans) is just a tax that ends either when the loan is repaid or after a certain number of years.
- something about VAT that doesnt penalise the poorest in sosciety far more than the better off
Punished is a very pejorative term.
If you are the one struggling and have your childcare removed then it's going to feel pejorative just as for example taxing pensioners on benefits like bus passes will feel to them.
I just want everyone to pay their taxes fairly.
Except that is what you feel is fair and there are almost as many definitions of that as the population.
Income tax is only a small amount of the natins total tax take but making the starting point £100 000 is way too high. so few folk have incomes that high
the worst anomaly is that at the highest incomes they pay a lower % in tax because of the NI cuttoff
Tax avoidence and evasion costs the country far more than benefits cheating – but we put10X the effort into chasing benefits cheats
The biggest perceptual problem is people can't appreciate maths and can't tell the difference between someone earning 100k/yr and 10 million+ a year.
100k is a good income but its far closer to 15k/yr than it is to 10 million/yr
Most people on 100k are paying tax (though they may be using schemes for pensions / cycle to work etc) ..
Most people on £10 million+ are spending more per year avoiding tax than a 100k person is paying fairly.
and the same can be said for corporation tax....
Ultimately if we stopped worrying about middle income and instead got those spending more each year than most people earn in a decade on tax avoidance the truss-pie would be a lot bigger.
The real underlying issue/deception is the Truss-Pie isn't a single pie ... the Truss-Pie is the little pie for the little people not the huge pie that only the superrich can eat.
The plebs are instead fighting each other for their tiny slice of the tiny pleb pie... whilst the huge pie for the superrich is just ignored. Hardly surprising that most of our press owners are sticking their snouts into the superrich pie and laughing whilst they stir up the plebs to fight amongst themselves.
The real underlying issue/deception is the Truss-Pie isn’t a single pie … the Truss-Pie is the little pie for the little people not the huge pie that only the superrich can eat.
Reminds me of this...
[url= https://live.staticflickr.com/8246/8654976662_6f349fc6c8_c.jp g" target="_blank">https://live.staticflickr.com/8246/8654976662_6f349fc6c8_c.jp g"/> [/img][/url][url= https://flic.kr/p/ebP22y ]Blame poor people[/url] by [url= https://www.flickr.com/photos/brf/ ]Ben Freeman[/url], on Flickr
Ultimately if we stopped worrying about middle income and instead got those spending more each year than most people earn in a decade on tax avoidance the truss-pie would be a lot bigger.
£100 000 a year is not middle income or even anywhere close
Not a very good plan, most on over 100k are earning it using systems outside PAYE, putting that level of tax on shares and so on effectively kills the uk financial market and pushes it to the eu.
It’s as depressing as these emissions zones / clean air payments, it tends to hurt the poorer more, who can’t afford Euro 6 engines or EVs, I see it in our area just outside Bristol with lower paid workers now having to reroute, or bus in for the children’s hospital as they’ve removed that exemption recently
Ultimately if we stopped worrying about middle income and instead got those spending more each year than most people earn in a decade on tax avoidance the truss-pie would be a lot bigger.
Except the number of people earning £10 million is how many?
The number of people earning £1million is somewhere arround 20k. If you taxed them all 51% then you could fund about 7% of the NHS's budget.
Is their taxation "fair", probably not. Is it a distraction from the real conversations we need to have about taxes on more average ammounts, yup.
Median wage is still <£30k, modal wage is <£25k. £100k is so far up the curve that it disappears off the ONS graphs which cut off at 97% as it's taking off.
I think NI goes away if there’s a guaranteed minimum income as you wouldn’t need to prove pension eligibility.
What's to stop me working my whole career in sunny tax free Abu Dhabi before showing up at pension age to claim my UBI?
[edit: should have typed tailing off not taking off]
Apart from the Guardian, which mostly seems to exist to convince the well off that really they're actually struggling on the marginal rate between £100k and £120k, is the same as the struggle to get the minimum wage uplifted by about 30% to an actual living wage.
What’s to stop me working my whole career in sunny tax free Abu Dhabi before showing up at pension age to claim my UBI?
Mostly the fact that if you've spent a lifetime outside the UK and no longer have any ties here, why would you move back?
That and it's a very niche edge case, how many peoples jobs can actually be done remotely from a tax haven?
What’s to stop me working my whole career in sunny tax free Abu Dhabi before showing up at pension age to claim my UBI?
Don't think the UK has a UBI at present, pension wise you'd have to have the stamps, benefits wise you'd have to set yourself up in the UK and have no real savings or the likes, either way you'd be taking a hell of a step down.
Mostly the fact that if you’ve spent a lifetime outside the UK and no longer have any ties here, why would you move back?
The free health care. A lot of people move back as the get older as the health insurance costs rocket.
So the top 481000 people pay one third of all the income tax. The bottom 48 million pay a third too. Sounds like we're already hammering the rich quite hard.
£100 000 a year is not middle income or even anywhere close
Depends how you define middle as ... if you do it by median share of the pot then 100k a year is nowhere near the middle as those earning billions drag it so far off so its more like £2-10 million a year
if you do it by mode on numbers earning it then it's way above...
The question is if you/people want a punitive tax system or a fairly distributed one.
I'm switching from income to wealth just because numbers are easier ... Rishi Sunak has a net worth of $4.3 billion (declared) for example and he's not even really in the superrich category... but that's the same as 4,300 millionaires.
Rishi however would far prefer you concentrate your hatred on the 4300 millionaires and conveniently not distinguish them and stick them all in the same bucket even though he doesn't feed from the same trough.
If you look at the total pie for the UK then over half that pie is a few thousand at most... and that is just by going from declared wealth...
If we switch back to income then it's the same except those on say 100k are mostly PAYE and not hiding income but may take advantage of various schemes whereas Rishi (for example) will gladly pay someone £1M a year to reduce his tax by £10M.
The NHS consultant driving a Porsche and living in a nice house is far more visible to you for example but they are actually feeding from the same pie as you and I, they just have a bigger share of that smaller pie.
What you and most people are missing due to the press owners being superrich is we are fighting over the scraps... there is a far bigger pie but we don't even get to fight over it.
The 100k a year consultant gets upset and the benefits scrounger and the nurse at the consultant... and the superrich look down from their Olympus and see all is well.
So the top 481000 people pay one third of all the income tax. The bottom 48 million pay a third too. Sounds like we’re already hammering the rich quite hard.
No it doesn't, you figure doesn't mention how much wealth they have or earn compared to everyone else. If the bottom 48 million only receive 10% of the wealth generated, they are the group being hammered, with a big ****ing hammer.
So the top 481000 people pay one third of all the income tax. The bottom 48 million pay a third too. Sounds like we’re already hammering the rich quite hard.
Not necessarily 'hammering' them - it doesn't particularly say what proportion of their earnings they are losing and consequently how much they have left. Although it does surprise me that slice contributes as much as it does.
Also - what's the same table but with NI, which is tax by another name. How much do the bottom 2 bands contribute in NI compared to the top 2?
top 481000 income tax payers pay one third of all the income tax
fixed that for you.
properly rich people are highly unlikely to pay much in the way of income tax. tTeir spending will be mediated through trusts and shell companies which are taxed at a much lower rate (assuming they aren't offshore and zero taxed in the first place)
the interesting thing for me in this is about 1/2 of government revenue comes from income and NI taxes, and about 20% from corporation tax.
To my mind that means there is an awful lot of wealth out there that isn't attracting any tax at all and more and more of it is moving out of reach of traditional tax gathering activities.
<div class="bbp-reply-content">
£100 000 a year is not middle income or even anywhere close
</div>
TJ you are right. But its also nowhere near making someone "wealthy". In most parts of the country you probably couldn't even buy a 3 bed semi (in a nice middle class area, etc, ,etc) on that income. And thats terrifying.
thisisnotaspoon
Except the number of people earning £10 million is how many?
The number of people earning £1million is somewhere arround 20k. If you taxed them all 51% then you could fund about 7% of the NHS’s budget.
Is their taxation “fair”, probably not. Is it a distraction from the real conversations we need to have about taxes on more average ammounts, yup.
Median wage is still <£30k, modal wage is <£25k. £100k is so far up the curve that it disappears off the ONS graphs which cut off at 97% as it’s taking off.
The thing is "income" gets very fuzzy because anyone earning £10M or more is paying a lot of money to specialists to reduce it and a not inconsiderable number in terms of the wealth they represent commute into the UK from places like the IOM so they can sleep outside so they don't even count, their private jet is owned by a company etc.
Just a quick copy/paste to excel... taking the top list
https://en.wikipedia.org/wiki/List_of_British_billionaires_by_net_worth
175.93 Billion from 17 people sounds a lot but when viewed as that wealth is the same as 175,930 millionaires and whereas your 20k figure for £1M income is probably not far off as most people earning that can't afford the top class tax avoidance or truly hide their income
The ability to both hide and divert actual income is largely a matter of the more wealth you have the better you can do it.
(by divert I mean your company owns the jet etc. and you are just taking a dividend but the company is paying for your lifestyle big items)
How reliable these rich lists are is open to questions as most of them it is in their interests to minimise what people know.
Apart from the Guardian, which mostly seems to exist to convince the well off that really they’re actually struggling on the marginal rate between £100k and £120k, is the same as the struggle to get the minimum wage uplifted by about 30% to an actual living wage.
Yet take the DM etc. and its about how benefits sponges are scraping an extra few pounds or some migrant is being given food and shelter ...
The living wage is another example... it's just all of these are from the smaller pot.
Mostly the fact that if you’ve spent a lifetime outside the UK and no longer have any ties here, why would you move back?
Because the UAE basically doesn't allow gästarbeiter to retire there and be a drag. There is a strong push to get rid of foreigners at 60. And it is very expensive to live there. (And rubbish, but that's just my opinion...)
I'm not suggesting there is a huge number of such people - but there are about 250,000 UK citizens living in Dubai alone...
Not necessarily ‘hammering’ them
Agreed.
Was it Marx who said "Receive according to your needs and contribute according to your means" or something like that?
Seems a pretty sensible proposition either way....
Depends how you define middle as … if you do it by median share of the pot then 100k a year is nowhere near the middle as those earning billions drag it so far off so its more like £2-10 million a year
That's not how averages work at all.
Mode - the most common number (this is generally the lowest of the three as the distribution looks slightly more like a wedge than a bell curve)
Median - the middle number, i.e. in a population of ~40million working people, what does the 20millionth person earn.
Mean - add the wages together and divide by the number of people (roughly GDP per capita)
20k figure for £1M income is probably not far off as most people earning that can’t afford the top class tax avoidance or truly hide their income
It's from the ONS/IFS (I was just googling for a figure).
My point was there's a lot of posters on here on very good incomes trying to kid themselves that there's this huge cabal of "others" above them. Yes 17 people having $170 billion between them is obscene, but in the scheme of things you could do a Stalin and disappear them, and only fund the NHS for a year from the proceeds. Taxing them is a great egalitarian idea, but ultimately irrelevant. Especially as you can only tax "wealth" once, then it's gone.
Taxing them is a great egalitarian idea, but ultimately irrelevant. Especially as you can only tax “wealth” once, then it’s gone.
Also quite tricky as Norway has found, they upped their wealth tax by a tiny amount and all their billionaires decided to emigrate....
Was it Marx who said “Receive according to your needs and contribute according to your means” or something like that?
Seems a pretty sensible proposition either way….
Exactly. If people could look at this from the view of what they are taking (after tax) as we are all taking rather than what you are giving via tax.
On the stuff about who pays the most tax - you really need to include indirect taxation such as VAT in that. From memory when you do then the poorest folk pay the highest % of their income in tax
Lots of dumb ideas in the OP. Assuming your planning on keeping the total tax take the same this
My 2p worth is that income tax and NI should not exist until earnings of £100k a year. At that point a rate of 51% income tax comes in. But to stop avoidance that tax is on everything. £1m a year in shares? £510k tax to be paid. Sold those same shares for a £1m profit? Another £510k tax to be paid.
won't work. I earn well above 100k and assuming that you mean a marginal rate of 51% I would be better off under those rules by several 10s of thousands of pounds.
£1m a year in shares? £510k tax to be paid.
I'm assuming you mean paid those shares rather than just having that value of shares. In which case those are already taxed as income and at that value likely at the maximum marginal rate which is currently 47% (including NI) so little additional would be raised.
Sold those same shares for a £1m profit? Another £510k tax to be paid.
Now treating capital gain as income is certainly something I agree with.
VAT shouldn’t exist on anything classed as a necessity. Fuel, energy, food, water… no taxes. Transport… no tax.
Lots of those are already zero or low rated for VAT. Food, water and public transport is zero rates , energy for household use is 5%. Only petrol/diesel attract high rates of tax.
Income tax is only a small amount of the natins total tax take but making the starting point £100 000 is way too high. so few folk have incomes that high
@tjagain this link would appear to contradict that. Income tax is single biggest source of tax followed by NI then VAT.
Where do you think the majority of tax comes from?
Also this
the worst anomaly is that at the highest incomes they pay a lower % in tax because of the NI cuttoff
is nonsense. There is NO cut off. The marginal rate drops from 12% to 2% making the effective tax rates 32%, 42% and 57%. (ignoring anomalies like reduced tax free allowance and pension charges). My personal average direct taxation rate is around 44%
£100 000 a year is not middle income or even anywhere close
Depends how you define middle as … if you do it by median share of the pot then 100k a year is nowhere near the middle as those earning billions drag it so far off so its more like £2-10 million a year
You what. Doesn't sound like any definition of Median that I've seen
Someone up there ⬆️ (MCTD?) mentioned that only 95% of tax due is actually paid.
I propose that any business (or individual/employee) that, however tangentially, facilitates tax avoidance/evasion, MUST be licensed in the same country as they are providing advice on AND such license costs MUST be sufficiently high to recover a big chunk of that missing 5% tax AND profits on any such activities should be taxed so heavily (separate corporation tax if needed) that the remainder of the missing 5% is recovered.
In other words, reduce the incentives for creative accounting by those who pedal it...
(IANATL)
Feel free to critique!
gonefishing - that totally backs what I said - income tax is only a part of the total tax take being 1/4 of the total
The marginal rate drops from 12% to 2% making the effective tax rates 32%, 42% and 57%
Eh? top rate of income tax is 45% plus 2% NI = 47%
57% was typo sorry. It is as you say 47%.
You said income tax was a “small” part. It is the single biggest part and as you say about a quarter. That doesn’t meet my criteria of “small part”.
Fair enough. 1/4 is a small part to me being well less than half
the income tax and NI thesholds did not use to align at all so you actually had a lower marginal rate once you went over the NI top threshold
America was most prosperous in the 60’s, when the top rate of income tax was 91%. That’s where I’d start.
Meaningless with out context.
Interesting discussion. I don’t think that there is that much more tax that governments will be prepared to squeeze out of higher and additional rate PAYE tax payers. Well except slowly reducing the point where tax bands start. Over the last few years the government has been able to get more tax back from self employed (IR35 rules and corporation tax).
So where to look to get back more tax? Yes maybe change rules on Trusts and other tax avoidance strategies. However let’s all remember that avoidance and evasion are very different. One is illegal and one isn’t.
I’d like to see more money paid for HMRC to clamp down on evasion. But government has to change laws to reduce avoidance schemes and I don’t see this government doing this. Especially corporate tax avoidance schemes.
As people have said indirect taxation and NI hits the poorest hardest and raising taxes
would be beneficial to removing VAT on more basic items and removing NI from the those struggling most.
Unearned income and gains should be taxed at least as highly as earned income, rather than treated highly preferentially as at present. Work hard and earn a good salary? Thanks, that'll be 45% plus NIC. Sit on your arse and watch your investments rise? Have an additional 12k annual allowance tax free, and tax is only 20-28% on the excess.
Inheritance is a huge source of inequality and should be more heavily taxed. No-one needs a million quid tax free in their 50s or 60s, especially as the vast majority of recipients of such large sums are already rich home-owners. A lifetime allowance for recipients of maybe 50k tax-free with any excess taxed at 50% would leave the large majority unaffected anyway and it's not like the super-rich have any need for the money which was mostly made on the back of the housing boom rather than through any particularly worthy actions.
As a further plus, it might encourage people to sell "the family house" so that someone else can live in it, rather than holding it as a vacant store of wealth that gets used twice a year and hollows out villages and towns around the country.
the income tax and NI thesholds did not use to align at all so you actually had a lower marginal rate once you went over the NI top threshold
Wrong again. They line up exactly. At £50,270 your tax and NI goes from 20%+12% to 40% + 2%.
Pretty good thread this, lots of interesting issues.
I'd recommend watching some of Gary Stephenson's videos on how inequality is growing and subsidies to the wealthy.
I think my main thought is that lots of Western countries, certainly the UK and USA, are becoming more and more feudal - the way to have a high income is to own and rent seek rather than work.
This means being born rich will become more and more the means to becoming rich, whereas during the capitalist era it was only one of many ways.
Prior to capitalism amassing wealth was all about gaining, through fair means, or foul, lots of land and stuff. You can see it today with property, patents, copyrights, even domain names.
Who owns my music, Spotify. Who owns my movies, Amazon, Netflix, Disney. Who owns my flat, Natwest (for the next 30 years).
Vulture capitalism, Neo-feudalism, the Predator state, call it what you will.
Think about the covid bailouts.The government generated money, via the BoE, borrowed it, gave it to businesses, and now I have to pay off this national debt.. . It's a transfer of wealth from earners to owners.
Wrong again. They line up exactly. At £50,270 your tax and NI goes from 20%+12% to 40% + 2%.
Used to
Try reading rather than jumping in.
Used to
Try reading rather than jumping in
Should have quoted this
NI is a tax and has an upper limit so one you go over the upper limit for NI your taxrate goes down
As for used to -when was that? A quick Google suggests that in 2000 it was the same amount (other than a couple of hundred pounds, as one is a weekly rate and the other annual)
Also quite tricky as Norway has found, they upped their wealth tax by a tiny amount and all their billionaires decided to emigrate….
Not necessarily a bad thing though...
You what. Doesn’t sound like any definition of Median that I’ve seen
Perhaps not but it's mostly about perception of very large numbers.
If we randomly take an event happened "yesterday" in geologic time such as the evolution of hominids then something like the age range of homo naledi some 335,000–236,000 years ago sounds like a long time. Stick that on a linear scale from say 4.7Ga to today on a 1m long piece of paper and the 0.07mm wide line is practically invisible... assuming you find something to write with.
Now take something almost as recent .. lets take the UK downs and explain how the alpine orogeny uplifted these... but uplifted what? Even the chalk is recent in geological terms and now you're explaining how it was deposited in a shallow sea and yes where you are standing was under the sea "even longer ago than when the downs were thrown up".
To most people this is all "just a very long time ago", they see homo naledi as perhaps coexisting with non avian dinosaurs or if you say "no after that" then immediately after.. different things all occur at different rates and mechanisms...
These are the sorts of numbers we are looking at for wealth... but most importantly the mechanisms all change.
Your average citizen might scrape form week to week or month to month .. they don't buy and sell companies to asset strip.
if you do it by median share of the pot
Doesn’t sound like any definition of Median that I’ve seen
It's exactly how ... its defined from a sample.
That sample has to be defined...
The median density of "rocks" or "carbonates" or "limestones" or "sedimentary limestones, excluding pure evaporites" or sedimentary limestones <5% Mg ... or <1% Fe and are we including pore space or not?
If you want to extend that to permeability then RELATIVE to WHAT?
Median – the middle number, i.e. in a population of ~40million working people, what does the 20millionth person earn.
What do you mean by "working person" ?
What do you mean by "earn"?
(It’s from the ONS/IFS (I was just googling for a figure).
Or what do the ONS mean?
Take someone who wakes up in the IOM, fly's on a private jet (owned by a company they are the sole shareholder for) after being driven to the airport by a driver in a car (paid by the company) and does some deals in Manchester offices (owned by their company) with their food and everything all paid by their company.. before flying back so they are not sleeping in the UK and the next morning flying to Zurich where they transfer to their mountain lodge (owned by another company they own 100%) for 2 weeks ski-ing...
How would you/HMRC/ONS even determine "what they earn" ???
What I mean is the money they "spend" for "stuff" is not income like a normal person.
They aren't spending money they paid income tax on... the £1M or whatever they pay a year for someone to ensure they pay the absolute minimum of tax is probably less than they are declaring as their "income".
Take someone who wakes up in the IOM, fly’s on a private jet (owned by a company they are the sole shareholder for) after being driven to the airport by a driver in a car (paid by the company) and does some deals in Manchester offices (owned by their company) with their food and everything all paid by their company.. before flying back so they are not sleeping in the UK and the next morning flying to Zurich where they transfer to their mountain lodge (owned by another company they own 100%) for 2 weeks ski-ing…
How would you/HMRC/ONS even determine “what they earn” ???
What I mean is the money they “spend” for “stuff” is not income like a normal person.
They aren’t spending money they paid income tax on… the £1M or whatever they pay a year for someone to ensure they pay the absolute minimum of tax is probably less than they are declaring as their “income”.
Because none of that has any impact at all on the median.
Of working age people, 3.7% are Unemployed, and 21% are Economically inactive (i.e. unemployed but not looking for work). That's millions of people.
There are ~20,000 earing >£1million/year
And <20 billionaires
Your statement was
if you do it by median share of the pot then 100k a year is nowhere near the middle as those earning billions drag it so far off so its more like £2-10 million a year
Which is factually incorrect by two to three orders of magnitude. Primarily because you've fundamentally misunderstood what a median is and how distribution shapes affect it's relationship to the mode and mean. The greatest reason to consider a median is because it automatically rules out edge cases like those 20 billionaires and millions of unemployed.
Whatever criteria you pick and choose the 'average' always comes out somewhere around £25k-£35k. Because the number of people on six figure salaries or who own obscene levels of wealth are miniscule by comparison.
Income tax
Straight percentage for income by any means. No NI. Capital gains or inheritance over 100k can be spread over 2years.
Personal allowance - 10k
Basic (25%) 10k to 50k
High (50%) 50k to 150k
Additional (60%) over 150k
Example: Bob earns 40k per year (10k tax free and pays 25% on 30k). He has 10k income from property and pays 25% on this. He inherits 200k and pays 50% on this by spreading the income over 2 years.
Bill is unemployed and inherits 100k. He pays 25% tax on this by spreading over 2 years
Ben earns 150k a year. He sells a property for 200k, gets a dividend for 20k and inherits 800k. He has to 60% on all this additional income.
Consumption Tax (VAT) for goods based on harm done. No VAT for services. Figures for illustration.
Petrol/Diesel - 60%
Alcohol/Tobacco - 50%
Plastic Tat / single use - 40%
Sugary processed foods - 30%
Current reduced rate and goods wholly produced within UK - 5%
Council tax - re value houses and make more progressive.
