[Closed] ukip to cut income tax

Flat rate taxation can be a radical alternative that may well create the kind of world which you seem to be after

How? By increasing tax on the poor and decreasing it on the rich?

molgrips
You appear trapped in the same way of thinking as this man too.
"The millionaire to pay exactly the same tax rate as the young nurse, the home help, the worker on the minimum wage".

molgrips
You appear trapped in the same way of thinking as this man too.
"The millionaire to pay exactly the same tax rate as the young nurse, the home help, the worker on the minimum wage".

What do you mean?

Flat rate are not used anywhere and every country in the world, I am aware of, has a progressive tax system [ must be one ]

Why does it work better then nick?

jambalaya - Member
We do have one rate of corporation tax for example, you don't pay a higher rate because you are a larger more successful company.

Yeah, right. Amazon, Tesco, etc.

Flat rate tax benefits the rich, those who earn 6 figure sums, and impoverish the low paid, those people who work, still pay tax and then receive benefits because their pay is below a level considered to be enough to support a family. At the same time large companies are effectively handed cash in the form of lax enforcement of tax laws and the government topping up poor wages through benefits due to the minimum wage.

So, yes, it's fair if we all pay the same rate of tax. 🙄

We do have one rate of corporation tax for example, you don't pay a higher rate because you are a larger more successful company.

Actually you do - there's a discount for small businesses afaik. Or at least there was last time I had to pay it.

@cheekyboy Only if we can be certain that free loaders like yourself can be left on the side of a mountain with your broken collar bone and wallet to fend for yourself

I suppose that was you and your accolytes laughing at me whilst I lay in a star-shaped configuration at the bottom of the Slab up at Gisburn with a dislocated shoulder 🙂

Fact is they will probably be leaving more folk on the side of mountains after they have ridden us much further into the valley of DEBT once they get fed bombing he sands of the middle east into glass.

It is a Gordon Brown quote used to criticise flat rate income tax.A man bankrupt of ideas who ended running an almost bankrupt nation.Progressive income tax is a sacred cow and the elephant in the room(apologies for the mixed animal similes).

Progressive taxation isn't working and the gap between rich and poor is increasing.

What a bizarre comment. Increased income inequality has nothing to do with progressive taxation other than the shift away from it and onto more regressive taxation.

From the Victorian days right up until 1979 the share of income received by the wealthiest 1% fell, then after 1979 their share of income increased.

[img] [/img]

Why this happened isn't a mystery - Thatcher got elected and and her policies have continued to be applied since then. She certainly didn't increase progressive taxation in Britain. Today as part of her legacy we have purchase tax/VAT set at exactly the same rate as the basic income tax rate. Something which would have been completely unacceptable 40 years ago.

Flat rate tax benefits the rich, those who earn 6 figure sums, and impoverish the low paid, those people who work, still pay tax and then receive benefits because their pay is below a level considered to be enough to support a family. At the same time large companies are effectively handed cash in the form of lax enforcement of tax laws and the government topping up poor wages through benefits due to the minimum wage.

How would flat rate of tax help?
Prior to Thatcher top rates were much higher were they not and the up turn in inequality correlates with income yax being krss progressive.

Why not?

There is nothing intrinsically fair or just about equality of outcome. The concept is absurd.

We have a tax system in the UK that creates a major redistribution of income ie is highly progressive indeed we have the irony that under Tories the lowest paid have been the only sector that has seen pay (plus benefits) increase since the crisis.

Taxes work when they are simple to understand and cheap to administer. People can debate about the merits of progressive taxes. But structured correctly a flat tax can achieve all three and much better than the overly complex current tax system that is unfit for purpose

teamhurtmore - Member

indeed we have the irony that under Tories the lowest paid have been thr only sector that has seen pay (plus benefits) increase.

Gosh, poor people are getting richer under the Tories. I'm going to rush out and vote Tory next May.

Can you explain , with examples where it has worked, how a flat rate would be better.

I am sure they will welcome your vote Ernie seems like they need a few more. Even with eds x2 lacklustre efforts this week.

Yes but not now as on the train. Flat taxes are by no means perfect but they would achieve the standard requirements of taxation much better than the current mess.

High allowance. Low flat rate tax above that. Simple, effective and progressive. (but not perfect)

Flat rate taxation can be a radical alternative that may well create the kind of world which you seem to be after

It is not just a right wing dream

Its pointless discussing as molly's example showed the reason no one here seriously supports it and why it favours the rich by moving the burden to the poor
to be fair the way since thatcher has been to reduce income tax and increase indirect tax like council tax and VAT - as ernie graph shows

Noticed on the front of the Express that they've also promised to get rid of inheritance tax, that'll surely get a few of the old frothers voting for 'em too.

Prior to Thatcher.....

Those halcyon days!!!

ernie
Maybe I wasn't clear but I was referring to replacing progressive income taxation with flat rate.You have made also made my second point for me because Gordon Brown whilst angry that " young nurse, the home help, the worker on the minimum wage" would pay the same rate of income tax as a millionaire had no qualms about them and the unemployed paying the same rate of tax when buying a table and chair or a bed or a bike or getting their car fixed or buying a bus or train ticket.
I'll leave pasties out of it.

Taxes work when they are simple to understand and cheap to administer. People can debate about the merits of progressive taxes. But structured correctly a flat tax can achieve all three and much better than the overly complex current tax system that is unfit for purpose

Is that your best argument against progressive taxation? "It's complicated"? Given that most people never have to calculate their own tax, I can't see that as a disadvantage tbh.

Nick, you haven't provided any evidence of why a flat rate tax is fairer. You're just complaining about Gordon Brown. You'll need to do better than this to win us over I'm afraid.

No inheritance tax and a flat rate. First time I have heard those nutters talk "some" sense.

You haven't given any evidence either thm. I generally respect your opinion so I'm happy to hear your points.

Yes mol the current tax system is an ineffective mess. But remember a flat rate tax can still be progressive so your question needs rephrasing

Isn't this just an unsustainable headline grabber ? I mean with everything that's going on can we really afford to cut taxes ?

its so daft not even they want to entertain it.

Its pointless discussing as molly's example showed the reason no one here seriously supports it and why it favours the rich by moving the burden to the poor

Tmh, enlighten me. Why is the current system effective? And why is a flat rate progressive?

No Nick discuss away but it will remain pointless on the grounds that it wont happen here ever- its purely a hypothetical debate - I made the reason pretty clear - it is almost as if you just want to have a go at me rather than explain how truly brilliant your system is to molly .

a flat rate tax can still be progressive so your question needs rephrasing

Basically if you give an allowance a flat rate tax is progressive but only just and it is essentially not

for example if we have an allowance of £1000 then some people pay zero - ie those on less than £1000 a millionaires nearly pay the entire flat rate on theoir income - the more they earn the closer they get. Given this you can claim it is progressive. However the point at which you pay tax we all pay the same rate hence why it is called a flat rate tax.
It a point of view on whether you wish to call this progressive but the word flat rate tax tells you what sort of tax system it is IMHO.
Its probably fairer to say flat rate tax and TRUE flat rate tax [ ie one without an allowance] rather than claim a flat rate is progressive.

NB pretty much any allowance even allows you to claim it is progressive even 10 p

YMMV and it can be argued either way.

Basically if you give an allowance a flat rate tax is progressive but only just and it is essentially not

Well that's what I thought he meant, but how is that not simply slashing taxes for the rich and putting more on the lower-middle income people? That's just wrong imo.

Have guests at home and waiting for dinner so

1. Current systems is highly progressive - just look at the stats
2. But it is massively complex, full of loopholes, extremely expensive to run and pretty inefficient.
3. In other words fulfils only 1 of the three functions of an effective tax sytem (google Mirlees report)

A progressive tax system is one wher higher earners pay more tax out of their income. As long as there is an allowance, a flat rate will be progressive. The higher the allowance the more progressive. So nice high allowance and then a flat rate above it. That would be better (but not perfect) that the current fiscal mess.

Bon apetit have a good debate!

Well that's what I thought he meant, but how is that not simply slashing taxes for the rich and putting more on the lower-middle income people? That's just wrong imo.

Its not a fair way of raising revenue though as thm notes, it is easy to operate

IMHO the main objective of a tax system is to be fair and it fails massively on that front

But it is massively complex, full of loopholes, extremely expensive to run and pretty inefficient.

Talking about everyday people here - most of whom pay through PAYE.

The only loopholes I know about are things like contractors selling their cars to their companies etc - but I don't see how having a flat rate would make a difference. Why would it? The complexity doesn't come from the tax bands.

 

Can you explain , with examples where it has worked, how a flat rate would be better.

So thats a no then?
Just saying the current system isnt very good doesnt make an alternative better.

mt - Member
"Of course UKIP could promise you free holidays for life, but they're not going to have to back up their promises with action."

What like the Libdems?

£30000 personal allowance.
50% flat rate tax on all income above that.
No loopholes, no offsetting.

Progressive and flat.
and "fair" ?

If more revenue is needed take the flat rate up towards 60% or the allowance down towards 20k depending on the colour of your tie.

loum for Chancellor.

So thats a no then?

Can you explain , with examples where it has worked, how a flat rate would be better.

The report also argues that the flat-tax would remove the disincentive to work for those on benefits, because they would not be taxed for the first £12,000 earned."
What should interest JY, ernie et al are flat rate Universal Basic income models linked with flat tax/negative tax like this

The net is full of alternative economic viewpoints.

The economic powerhouse Jersey, **** me why did no one say?
Poland has it dont they, hows it working out for them? Mind you shouldnt be hard for me to ask a Pole.
What about iceland? How did they get on?

Currently, the poorest fifth of households pay the greater tax burden. According to the Adam Smith report the poorest third of families pay 9 per cent of their income in income tax. Under a flat-tax they would pay nothing.

You could do this under a progressive system.

The report also argues that the flat-tax would remove the disincentive to work for those on benefits, because they would not be taxed for the first £12,000 earned."

and this.
I fact I dont see any of what you say being exclusive to a flat rate system

Notice how he did not say how it was for the rich as if the purpose is not to make them better off but it is done to help the poor ...that is not even spin it is disingenuous

As it was proposed in 2008 - would you say it has progressed much then ? Caught on in a massive uprising of popularity or was my pointless comment accurate ?

Using a tax haven as an example of what we could achieve...priceless.

PS dont question me on my views just use Google 🙄

Using the NHS as an example again, when it was first mooted it was no doubt derided as pointless and wouldn't catch on.Same with most of the things that have benefitted the poor in society.It's about ideas JY not just a popularity contest.
And Jersey was mentioned simply because it is the nearest.Mind you ,didn't you say a few posts back that there were no countries in the world that had flat rate tax.Your Google must be [s]broken.[/s]fixed now. 🙄

How does a flat rate benefit the poor more than progressive tax? You could set a 0% rate up to 12k or where ever in both systems. What you are talking about isnt a benefit of a flat rate.

So other than Jersey what other developed successful countries have used this system and how are the poor getting on in those places?

So thats a no then?
Just saying the current system isnt very good doesnt make an alternative better.

Well AA it helps if you know the basic criteria for assessing tax systems.

So no, that's not a no. The current system achieves less of the objectives than a flat date - so yes, flat rate is better.

And it is progressive.

Anyway, must, read what UKIP nutters actually said.

[quote=teamhurtmore ]
Anyway, must, read what UKIP nutters actually said.
It doesn't matter what they said. As they'll never be in power it's irrelevant - a bit like the LibDems really.

PS dont question me on my views just use Google

As Junkyard said above, its a pretty thin argument.

It doesn't matter what they said. As they'll never be in power it's irrelevant

Yes, but like the above, always a giggle to read.

I can think pretty well. You whole argument seems to be that flat rate is better as the UK system doesnt meet certain criteria. Ignoring the fact one of the criteria you mentioned earlier was being simple, which obviously would make a simpler system meet more criteria. I dont follow the leap that says a flat rate system is better. I also dont see you presenting any evidence to back up your dogma.

But your a legend in your mind so please carry on.

Well you are in an unfortunate position then.

So "Dogma" is understanding the Nobel winning economist's literature on the subject (and having taught it) but that is clearly irrelevant??? 😀 you must be a hoot in class.

I will thanks and enjoy the wallow.

So evidence of places its been successful and where the poor have benefited. Got any?

So, as I understand it then, we are pouring millions into overseas aid because we feel sorry for the people who are not being looked after by their own governments who are wealthy enough to do so.

We've been doing this for years, and nothing seems to be getting any better for them.

Aren't we just encouraging an addiction to welfare and an indifference towards them from their own governments?

THM's flat rate tax concept seems to be just abolishing a tax band and changing the threshold. How is that revolutionary? Or is there something else I am missing?

I'm all for adjusting thresholds and bands if it improves matters.

As far as I can see all THM has said is that the current system isnt very good and is too complex so a flat rate would be better. Its a massive leap as far as I can see. Its like a Tory voter thinking the Tories are shit, rather than vote labour I'll become a communist. I may have misunderstood his ramblings though I find getting a straight answer out of him difficult.

we are pouring millions into overseas aid because we feel sorry for the people

I don't think you fully understand what oversea aid is about Woppit. One of the most generous provider of oversea aid is Saudi Arabia, a country which last month publicly beheaded someone for "witchcraft and sorcery", you need to ask yourself the motives behind the generosity of such as brutal country as Saudi Arabia.

Furthermore oversea aid is defined as spending which has "the economic development" of poorer countries as its primary objective, you would be surprised how that is interpreted, it includes "military and security training", and spending over "oversea" aid in the UK.

And much of the aid is actually in the form of loans.

Have a read of this :

[url= http://www.theguardian.com/global-development/2014/feb/13/millions-of-pounds-overseas-aid-money-spent-britain ]Millions of pounds of overseas aid money spent in Britain[/url]

[quote=molgrips said]THM's flat rate tax concept seems to be just abolishing a tax band and changing the threshold. How is that revolutionary? Or is there something else I am missing?
I'm all for adjusting thresholds and bands if it improves matters.

what you are missing is that flat rate helps the rich - look at it as a tac reduction for the rich as under the new system the flat rate is generally lower than the higher rate tax band. To get what we do now[ paying a flat rate and raising the threshold] the lower rate would need to be raised as well so it would be a tax rise for many as well.
Basically it removes the progressive nature of tax [ ie higher earners paying a higher rate of tax] for all nick mentioning of the poor it is a tax system for the rich. You have a billionaire paying the same tax as a cleaner...who benefits most from this? Hence why the right wingers on here are arguing for it.

As mentioned in my earlier answer you can claim it is progressive as it ha sa threshold but the fact remains it is a flat rate so we all pay tax at t the same rate once we pass the threshold and , IMHO, it is newspspeak to call it progressive - if it was we would not need to call it flat rate we would just call it progressive.

As mentioned before you can claim it is but it is not a great argument- using maths it is technically correct but , if you pay tax, we all pay the same rate.
Its flat rate with a threshold.

You're confusing a tiered tax rate with a progressive tax system - process with outcome. With a flat tax system, the higher the tax free threshold, the more progressive it is. If the tax free threshold were 30 grand, no one would be complaining.

An interesting lesson in semantics.

Interesting to note that the 'flat tax' part of the announcement has taken all the attention, but this bit has been hardly mentioned here:

[img] ?w=480&h=174[/img]

I'm not seeing a persuasive argument that's all. I don't see how adjusting the bands will close loopholes.

It eliminates them altogether (well almost)

When labour laid the successful political trap for the Tories they created a bizarre system where one person was paying a marginal rate of 60% when another earning 50k more was paying 52% - and that's a sensible system???

Equally as we have seen in actual practice, some countries have set, the flat rate at a very high level for periods of time.

How did it work out for them? How about the countries that set it lower? Why if its so obvious does it mainly only get done in Russia and Baltic States?

Still banging on about my job as a cheap jibe eh...pathetic, mindless and cheap.

With a flat tax system, the higher the tax free threshold, the more progressive it is

It is not a flat rate in terms of what you pay out above a threshold.

Progressive tax[ a definition] is the taxing mechanism in which the taxing authority charges more taxes as the income of the taxpayer increases.

There is no denying that technically it can be argued as you and KB do [ the progressive point ] but it a sophist argument IMHO for the reasons stated.

I get the argument I just think it is disingenuous - like arguing the bedroom tax is not a tax - that sort of thing.

See, on the other hand, the threshold/progressive argument falls down on the other side

one of the basic principles of the welfare state, much protected by the left, was that of universality - the concept that because everyone benefitted it had the effect of tying society together, we saw that argument much discussed over the withdrawal of child benefit for higher earners.

Of course the argument applies the other way too - society* and support for the system in general benefits by everyone contributing, if a section of the population don't pay tax then they have no real interest in seeing that it is spent wisely and with maximum value for money, its not 'their' money that goes to cleaning up the litter that they drop in the street.

thats why, although its far more radical, I would prefer to see a flat system with no threshold - I feel that it binds society together better if everyone contributes, not just some.

note here that I would also like to see removal of a number of other taxes, I feel that a great many of our current 'consumption' taxes are extraordinarily regressive, like council tax, fuel taxes etc. and would prefer to see them, along with capital gains tax etc. moved into the income tax sphere when doing the calculation for a flat tax rate.

(* a word I would have to prefix with 'The abstract concept that we refer to as' for obvious reasons)

Ninfan, the problem is you still have a 0% bracket so by you view they would never give a shit surely?

Do you? where?

edit - if you mean people on benefits, nope, I'd happily give them a weekly payslip that said, for example

'gross benefit £100'
income tax '£25'
total payable '£75'

although its largely a paper exercise, but as I say I see the value of the universality argument, I just think it works both ways.

TBH I dont see the value of universality in benefits. Healthcare, social care and education should be universal the rest based on need in my view.

Ah, well, Beveridge was along similar lines - however its notable his original report was based upon a flat rate of benefit in return for a flat contribution rather than a progressive one.

hats why, although its far more radical, I would prefer to see a flat system with no threshold - I feel that it binds society together better if everyone contributes, not just some.

Personally I think it is ridiculous to argue all must pay the same amount or % when we do not all recieve the same from society. The flat raters and the right wingers only ever want the "same" in terms of tax- ie they want more money and then they want more money again. We should not pander to them. Here have less than the millionaire but pay just as much a % and a higher % of your disposable income etc - its kicking someone who is on their knees rather than holding out your hand to help them off their knees

I know which i prefer to do.
Beyond being simple to administer it has no advantages IMHO and serves the rich not the poor.

As for universality it is universal but only if you need it

Giving child benefit to the wealthy makes as much sense as me having the same knee op as A-A had. Provide equally to this based on need rather than provide to all irrespective of need. Never understood the point of it TBH if you do not need help.

I have no idea why the best off in society would ever feel hard done by the system that enabled their won and protects the iniquitous spread of resources. It may not be "fair" but the unfairness is still massively in their favour.