Put tax payers in order of who pays most to who pays least – how far down the order do you think you would need to go before 50% of the total tax income was paid?

direct or indirect taxes?

Every single type of tax or money that goes to the government.

Rough figures suggest the top 1% of earners pay about a quarter of all income tax in the UK.

I don’t expect this thread to stay open long OP, STW can’t discuss matters of tax in a measured and gentlemanly manner 🙂

From 2009:

From 2011 here.

So basically, top 10% provide over half.

That is just income tax though. VAT and other taxes must skew that a bit.

That is just income tax though. VAT and other taxes must skew that a lot.

That is just income tax though. VAT and other taxes must skew that a lot.

In which direction?

Presumably the high earners have more disposable income so end up paying more in VAT as they spend it?

While the lower earners are more likely to spend large portions of their income on essential items with low VAT or exemption?

Good points well presented. Tending towards the skew a bit, not a lot though (based on glancing at a Wikipedia chart)?

indirect taxes are less proportional though.
Fuel duty will depend on mileage and economy of car [ newer being better]
rich folk spend money abroad and not here
Fag tax

It will alter it but by how much i dont know – not much i assume a they hide the wealth well

That is just income tax though. VAT and other taxes must skew that a lot.

In which direction?

Presumably the high earners have more disposable income so end up paying more in VAT as they spend it?

While the lower earners are more likely to spend large portions of their income on essential items with low VAT or exemption? [/quote]

Is it not a question of proportions, as opposed to totals?

http://budgetresponsibility.independent.gov.uk/category/topics/public-finance-forecasts-topics/

From there choose the excel spreadsheet marked economic and fiscal outlook and go to section 4. All the data you need. Enjoy!!!

Table 4.7 is probably the most useful.

And then:

http://www.ifs.org.uk/mirrleesreview/

Junkyard At what point do “they begin to hide the wealth well”.

Do “they” come from the to 1% paying 24% income tax or are “they” the top 10% paying 53% income tax. Perhaps it’s the top 50% that pay 88% of income tax? Just who are “they” and how wealthy are “they” when it becomes a good idea to start hiding there wealth?

does that include the lottery

its essentially a tax on the poor and it paid for all our olympic medals

kimbers – Member
does that include the lottery

its essentially a tax on the poor and it paid for all our olympic medals

Indeed it is and yet no-one seemed to mention that during the olympic euphoria (although I did, but the thread ended up closed. Touchy subject on STW :wink:)

Mt – the evidence on this is very mixed and relatively short-term. There is a lot written on the impact of labour’s final tax rise (HMRC etc) but is really only looks at a limited time frame. But if you go to the HMRC there is still plenty of analysis on this and the elasticity of tax revenues.

http://www.hmrc.gov.uk/budget2012/excheq-income-tax-2042.pdf

This is actually quite a good read (if you are interested in tax policy). Graph 3.2 may be interesting as is the discussion on Taxable Income Elasticity (TIE) – just whatever you do, do not mention the word Laffer (that comes at the end of the report) but is best avoided on STW!!!

FTFY

teamhurtmore – thanks for that the HMRC site is full of interesting charts, the writing is boring though.
What I was really trying to find out from Junkyard is who he thought “they” actually were and it what point “they” hide there wealth. I have no doubt that tax evasion goes on but would be interested to find out who he means by “they”. I’m sure he will have all the figures ready to show me. I’d not want to get the impression that it was a wealth envy thing (or a liberal). 🙂

I’m sure the 2900+ people who are now millionaires thanks to the lottery wouldn’t agree 🙂

@mt “they” is everyone else of course! 😛

“randomjeremy – Member

@mt “they” is everyone else of course!”

Given the lack of answer I fear you are right. I reckon it’s just a smoke screen for his own tax avoidance activities. I bet he owns Top Shop and has a wife in Monaco. 🙂

edit – missed the smile just in case it turns out to be true.

Hang on. If you are poor, 10% income tax, 10% NI? And 20% on your shopping. Not sure that adds up to 50% of total income, does it?

The incomes of the very richest have risen very fast indeed and well away from those of the rest of the population. Of the 30 million or so people who pay income tax, about 200,000 are expected to record incomes of over £200,000 a year in 2011–12, with a further 160,000 having incomes between £150,000 and £200,000. And the richest taxpayers pay a large portion of total tax revenues: in 2011–12, the top 1% of income tax payers are expected to pay nearly 28% of all the income tax revenue received by the government, more than double the 11% contributed by the richest 1% back in the late 1970s. The poorer half of income tax payers pay just 10% of all income tax.

This extraordinary level of, and increase in, the contribution of the richest is not down to a more progressive income tax structure—quite the reverse, as higher rates of income tax are much reduced. Rather, it is down to the very high levels of income enjoyed by the richest relative to those received by everyone else.

Mirrlees report

*wonders who’ll be the first to post the parable about the guys paying the bill in the restaurant*

MT – you may find the HRMC stuff boring (!) but id does (in Chapter 2) try to distinguish between the different types of responses to changes in the MRT ie, normal labour supply responses (good old income and substitution effects) and things like tax evasion and avoidance.

It concludes that:

The impact of these types of behavioural effects on other tax revenues is smaller than in the case of labour supply responses as they have much less effect on productivity and consumption. However, they still result in a significant direct Exchequer impact, and are still wasteful from an economic point of view as they require individuals to spend more time and resources tax planning, resulting in other economic distortions.

HMRC

Grahams – is that the maths trick with the missing $ ?

I have no doubt that tax evasion goes on but would be interested to find out who he means by “they”.

You answered your own question.
Well done

teamhurtmore – do you work for HMRC and did you write some of there reports? 🙂 Seriously though I totally missed that bit. Am I to conclude evasion starts at quite low levels of tax due, though it costs more the less you have to evade with.

Still can’t see at what point us changes to Junkyards “they” for hiding wealth. Is that because “they” are so good at it.