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:
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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
I am not confusing it I am rejecting this point for the reasons stated. I think it is spin and a sophist argument
It is a flat rate tax system with a threshold - once we pay tax we all pay the same. I can do the maths and I understand your point BUT IMHO it is not a progressive system as we all pay the same rate of tax [ if you pay tax]. No one pays a higher rate than anyone else no one as clearly a flat rate tax is designed to be a flat rate rather than progressive.
It is not a flat rate in terms of what you pay out above a threshold.
That is exactly what it is a flat rate above a threshold. If it was not it would not be a flat rate it would be a variable rate above the threshold.
Progressive tax[ a definition] is the taxing mechanism in which the taxing authority charges more taxes as the income of the taxpayer increases.
It charges the same irrespective of income - it does not charge more it charges the same rate- its not the very definition of progressive or we would not need another word for it.
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.
Those ex doms and tax avoiders are disgusted at your lack of support for their tax methods 😉
Its a difficult one - take the poll tax - we can all see why all paying is a good idea but it has to be implemented fairly based on ability to pay.
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.
