Would you mind paying more tax?

@jambalaya, yes I agree that there are other nations that have more advantageous tax regimes but that’s not the same as the dodgy offshore protectorates that have no tax but use their parent currency

And yes THM massive simplification

@TMH the problem is the rate, it would be mid/high 30’s % by definition most would be worse off.

Jambalaya – don’t forget that indirect, regressive taxes have Increased in use and significance. Always a little surprised that this has not caused more aggro – perhaps it’s more stealthy and people don’t understand why its regressive?

I pay my tax in France so I clearly don’t mind being taxed at a level only Danes understand. Especially when I look at the things I don’t pay. My son’s education will cost a few hundred euros a year rather than 9000 pounds. State health care is adequate so I don’t see the need to pay for a queue-jumping private insurance. The local swimming pool is ace and costs a few euros, public transport is silly cheap (1 euro for the 55km journey I do most), I could happily get by on the state pension etc..

I think you would get some weird transitional effects with flat tax. Assuming a higher threshold and a higher single tax rate set to get the same tax take.

High earners would always be better off as they would be paying a lower rate for all the previous higher taxed earnings.

Low earners who were below or just above the new tax banding would be better off (assuming threshold moves up)

Those on medium earnings – particularly those say mid-base rate to just above what is the current 40% tax rate would end up paying more, I have a feeling they would get seriously hammered to pay for the above. Given that would be the politicians “hard working people” I can’t see it…

Someone buying MTB parts online or stuff at Amazon is more likely to be middle class, I mean it’s not the poor buying essentials is it?

Not essential for life, but it’s hardly fair to tax the poor on their hobbies is it? We’re not talking champagne and caviar here – just some guy who wants to get out on his £600 hard-earned bike for a bit of exercise and enjoyment. It’s not all £4k carbon bling.

So drawing the line is extremely difficult.

The best way to solve the corporation tax problem is to set it to zero % and add a bit on to VAT if needed – but I imagine we’d more than make up in lost CT with all the extra income tax etc we’d get from stampede for business relocation to the UK

I assume there must be a reason why we can’t do this?

To be honest, if we classify NI as an income tax, then the UK isn’t really that far from having a flat rate of tax on earnings as described above.

VAT is payed by the purchaser, the seller is only the collection agent. It is fair to pay tax on company earnings rather than front load all taxes onto the purchaser.

My other tax raising wheeze is to legalise and regulate cannabis production and sales – charge a nice chunk of VAT and you solve a criminal justice and financial problems in one. If a republican state like Denver can do it…

This is a good idea.

Of course, we could do something revolutionary and tax wealth rather than focusing on income all the time. This is about as likely, or probably even less likely than thm’s prediction wrt. flat rates of income tax.

Tax wealth? What’s that mean?

@olddog – we’d get slammed by our trading partners (US, Europe etc) as every business stampeding to come to the UK would be leaving somewhere. Interesting the takeover bids we are seeing currently in the press are tax driven, its US companies trying to come to Europe (Ireland really) via the UK. The US politicians are wise to this and have declared war on these deals and are changing their laws as we speak to prevent them.

@molgrips I agree its not easy but Apple has $200 billion of revenue (profits really) offshore from sales of kit around the world. There has to be a better way. The tax need only be 2-3%. As you know I don’t believe the “tax the rich (ie someone else)” strategy is going to make a difference, its just motivated by jealousy / misplaced sense of fairness.

@deadlarcy – show me a country with a wealth tax only, there aren’t any. Switzerland has a wealth tax, its something like 0.25% and its only payable if you pay no other tax. They have lots of other taxes too. There is no way we could raise enough wealth tax to offset other taxes. We could have a wealth tax but first we should abolish non-dom status, why give foreigners a tax break over citizens ?

By the way I assume the wealth tax wouldn’t apply to you, just these other “rich” people ? Yes/No ?

Most wealth (for regular people as opposed to the ultra rich) held in the UK is in property. So you charge capital gains tax on personal dwelling for increase in value over, say the rate of growth in the economy. Basically you make the link between property value and council tax much more sophisticated – then whack up the rate.

There are three advantages – 1. One of the biggest sources of unearned wealth would be taxed. 2. It would hold down house prices. 3. You could get rid of inheritance tax as you would have paid tax on the increased value over time.

The downside is that no British politician in his right mind would suggest this as it would be electoral suicide.

Tax wealth? What’s that mean?

Do you know what tax is?
Do you know what wealth is ?
How about daft and question
or downhill cycling

What is the point of doing this?

By the way I assume the wealth tax wouldn’t apply to you, just these other “rich” people ? Yes/No ?

Why do you even ask when you’ve already assumed you know the answer? I might be sat on millions – only you wouldn’t know about it, as I’d already have it squirrelled away somewhere where nobody will tell you about it. 🙂

Do you know what tax is?
Do you know what wealth is ?

Your question is the daft one. Proposing a wealth tax raises a lot of questions about the details of said tax. Is it based on capital assets? Liquid? Is it payable yearly? On the contents of your bank account or just the delta? Etc etc.

I don’t know how wealth tax works normally, which is why I asked.

So you charge capital gains tax on personal dwelling for increase in value over, say the rate of growth in the economy.

What? So if other people decide they want my house, I have to stump up cash? That’s hardly fair.

Your question is the daft one

What do you mean by daft one 🙄

PS You quoted two questions

You sell your house and from the capital gained you pay tax.

You are struggling more than usual.

Moving house would be even more expensive than it is now, so many would do anything not to.

It always amuses me when people rant on about vodaphone [sic] not paying the “fair” amount of tax.

Most of the people most willing to offer their views on Vodafone’s tax arrangements have no idea how transfer pricing works, no understanding of how much revenue Vodafone generates overseas or any grasp of actually how challenging it is running operations in more than one country with the huge tax issues that arise as a result when that income gets repatriated – let alone what the original dispute between HMRC and Vodafone was about.

And the thing that amuses me most when people slate Vodafone – this year the company will pay a special £84B dividend equivalent to 1/3 of all income tax for the year – all of which will be going into the pockets of pension schemes and individual investors, and much of which will be spent on the high street in Britain.

…sorry I wasn’t clear. It’s more like super council tax than capital gains ie you would pay it annually – so there would be not sales tax element to it. You could probably get rid of stamp duty too for that matter.

btw I never going to be in charge of UK tax policy so you need to be worried that my ideas are half-arsed!

France has a wealth tax called ISF. There are also a lot of French super-rich living in Belgium and Switzerland to avoid paying tax in France.

One of the problems with the EU is unfair competition between countries to attract rich people and companies. Ireland with its very low corporation tax, Holland with its artists tax that attracts musicians such as Angus, and of course that fiscal/financial rogue state in the middle of Schengen – Switzerland.

You sell your house and from the capital gained you pay tax.

That’s capital gains tax. Not wealth tax..? Are you saying they’re the same?

I am never ever going to do this with you ever.
Hopefully those words were clear enough

No idea what you’re on about. I’m not trolling, I just don’t know what’s being proposed. Do other countries do this?

Income = what you earn
Wealth = what you own or in fact the net value of assets over liabilities. For most people that is pretty much Property less mortgage. Cars etc don’t really count in this context as they depreciate rather than appreciate.

Wealth tax is a tax on the value of what you own not what you earn. Inheritance tax is a wealth tax. In a sense council tax is a wealth tax as it is loosely based on property values.

It has nothing to do with only taxing rich people anymore than income tax.

Wealth tax is a tax on the value of what you own not what you earn.

So you get a monthly bill according to the value of your house? If you save money you have to pay a tax on what’s there, even if you’ve already paid income tax on it?

I’m not doing this very well try…

http://en.wikipedia.org/wiki/Wealth_tax

The only way I could see it working in the UK is that you would get taxed on increased value of the asset. This already happens with savings – tax on interest. With non residential assets you pay capital gains.

So the tax would be on the increased value in your property less debt. The only way I could see it working is like I said – super council tax that rises at the rate of house price inflation (or something.

The idea is to capture the unearned and untaxed part of growth in house prices – it’s a tax of redistribution – stops the concentration of wealth from house price inflation.

BTW it wasn’t me who first suggested it. My idea was to legalise and tax dope.

A fairly easy change would simply be to increase the number of council tax bands all the way up to the top house prices rather than stop at the low level they do now.

Wealth tax is normally a tiny proportion of total tax. You can basically tax three way

1. Holdings of wealth – eg, an annual charge on a house
2. Transfers of wealth – eg, inheritance tax
3. Appreciation of wealth – eg capital gains tax

None are easy to manage. DIsclosure remains a challenge as does accurately valuing assets. Given that we can’t do it with incomes properly, the chances of doing it well with wealth seem pretty slim.

Still nice headline grabber for uncle Vince.

Inheritance tax should be scrapped.

Council tax is idiotic as it is based on house prices 25 years ago.

I don’t agree with inheritance tax as I think they have already been taxed so should not be taxed again. Even if the wealth is transferred to another person, the other person who received it should be free to enjoy them totally.

Or ya council tax is just jobworth pay. Get rid of that and out source all the work (with exception of some admin works) of the council.

Tax should be simple:

Income tax.
Business/corporate tax
Import tax
VAT at very minimum.

There you go. Get rid of the rest.

@olddog I cannot think of a country which charges capital gains tax on your primary residence. Also you seem to be suggesting an annual tax based in house price increase, who decides that value ? Currently 68% of Britons own their own home so this new tax would be paid by the vast majority and you state that it would have the side effect of holding down house prices, so making 68% of the country less well off. Electoral suicide as you say.

Stamp duty now raises something like £14bn pa, this is more than from petrol/diesel (£12bn) which is incredible when you think something like 70% of the cost of fuel is tax/duty. Property in the UK is heavily taxed upon purchase.

In Switzerland wealth tax is generally charged on the absolute value (so not gain) of assets excluding property. Property is seperately taxed via annual tax and purchase tax (stamp duty fixed at 2% independent of value). Note annual property tax is offset against wealth tax. More complicated again as tax varies by Canton. The introduction of wealth tax on property is France has had a really bad impact on farmers who face large bills they cannot pay without selling land. A farmer appears asset rich but is cash flow poor so doesn’t have the income to pay the tax. Same is true of the winemakers.

@doctor – it doesn’t matter that the council tax bands where created 20 years ago as the actual rate payable is reset each year so is current.

@chew even if you outsourced everything the council did you’d still need to pay for those services so you need a tax/charge

Agreed lets scrap inheritance tax, double taxation and robbery.

jambalaya – Member

@chew even if you outsourced everything the council did you’d still need to pay for those services so you need a tax/charge

Yes, you pay charges but should be very minimum say £5/month when the house is occupied.

🙄

@mudshark council tax was designed to be fundamentally different than the old rates in that you pay for services used not property value, hence the bands stop before top values. We tax value with stamp duty, 7% on £2m so that’s £140,000. That’s a lot of tax. By the way the French tax about 8% on property even the “average home” I cannot imagine the stw outrage if people had to pay 8% on their £200k house like the French do plus all the income taxes as @ Edukator noted.

@chew – those numbers don’t add up. I’m not in favour of the wastage and inefficiencies of the local councils but the tax covers the police, schools, etc. There is no way that’s £5/month

jambalaya – Member

@chew – those numbers don’t add up. I’m not in favour of the wastage and inefficiencies of the local councils but the tax covers the police, schools, etc. There is no way that’s £5/month

Oh yes it will work.

Ok, you may even double to £10/month if you wish but still better than the present crazy rate, and I ain’t paying jobworth to make my life difficult.

😆

Nope. Not until we stop sending some of what I pay abroad. Not until tax is fair i.e. one rate for all. Not until it penalises greed and modern selfish desires by which I mean double the VAT on luxury items, eg almost everything electrical.
Not until it reflects cost of living ie fuel for rural users is cheaper than that for urban users who do less miles to live. Not until I, as a employed, married but no kids, just making enough to pay the bills, man pay the same % as a family of 6 on benefits, especially those with a stack of cars and luxury goods.