Rob not sure where you are getting your numbers from. Links please. But it is worth saying that those earning over £150k dont't pay 45% on all their income but just the portion over £150k. Ditto those on 40%. So the lower thresholds in most of Europe mean they pay more tax than us.
The bands (first link) are the bands and yes they kick in and end at the points in that link, i've not said someone earning over £150k pays 45% tax on all of their income, they pay 45% above £150k and due to loss of the personal allowance they actually pay just about 45% in the 40% band, i.e. earnings over 46k income tax is effectively at 45%.
By the time you add NI on I would say most of the high paid execs who don't really earn their exorbinate salaries, pay almost 50% of their earnings in income Tax & National insurance.
I've never made any comment on what other countries bands or rates are.
Rob and CAFCfan, to get the thread back on track. How do the Tories need to change? Stop pretending that high paid execs who don't really earn their exorbinate salaries, pay too much tax.
As usual, you've missed the key points because of your focus on vindictive left-wing ideology.
First, these people pay a significant amount of tax; they will have things like large mortgages on large expensive properties and kids at private school. If you slaughter them with more tax there will be other consequences. (Like more workers at JLR losing their jobs, no overseas footballers in the Premier League, etc, etc.)
Second, you could tax them at a rate of 100% but because there are so few of them, the extra tax take would not be worth a hill of beans in terms of actually paying for public services that people demand.
Third, "how do the Tories need to change" and the tax paid by high earners has no correlation, save that the high earners are paying more tax now than they ever did under previous administrations.
Fourth, I repeat, if you want the Govt. or the current opposition for that matter to spend huge extra sums on public services, I'm afraid the public, at large will have to pay for it. It's the only way that sufficient extra money could be raised. My opinion, for what it's worth is that the voting public would not stand for it.
Fifth, rather than looking at headline tax rates, you get a better picture in other ways. So, by blending the tax and benefits systems, you find out that the average of the poorest quintile of households pays minus 45.4% tax whereas the average household in the richest decile pays 32.5%. In other words, the tax/benefit systems combined are very progressive indeed. However, the picture changes dramatically if you then add in "benefits in kind", like free health service, education, housing subsidies, etc. The percentages then are minus 181% and 26% respectively. In cash terms, The average rich household pays £20,777 more in tax than they receive in benefits and benefits in kind, whereas the average poor household receives £9,982 more in benefits than they pay in taxes.
Now, there's a discussion to be had about whether this level of redistribution is right. But the truth of the matter is that for the Tories or anyone else to redistribute further, it has to be the case that either through taxation or a diminution of economic prospects or both, it will be the middle three quintiles that have to pay for it. I'll leave you to decide whether they have the stomach for such a change.
I am prepared to pay more tax along with others, in order to try to fix the dire state of the country. I am living on a modest pension, but recognise that schools for all need to be paid for. The rich don't seem keen to participate in paying for stuff for the general good when they can go private just for themselves.
I am prepared to pay more tax along with others, in order to try to fix the dire state of the country. I am living on a modest pension, but recognise that schools for all need to be paid for. The rich don't seem keen to participate in paying for stuff for the general good when they can go private just for themselves.
On what basis do you say that Seth? 'The rich don't seem keen to participate in paying for stuff for the general good when they can go private just for themselves'
It's not the impression I get in the main from those earning say 100k plus (but not sure where you are cutting the line for rich). They are already massively participating and most I know would take another small tax hit.
I am prepared to pay more tax along with others, in order to try to fix the dire state of the country. I am living on a modest pension, but recognise that schools for all need to be paid for. The rich don't seem keen to participate in paying for stuff for the general good when they can go private just for themselves.
On what basis do you say that Seth? 'The rich don't seem keen to participate in paying for stuff for the general good when they can go private just for themselves'
It's not the impression I get in the main from those earning say 100k plus (but not sure where you are cutting the line for rich). They are already massively participating and most I know would take another small tax hit.
In Tory councils they have been known to have street lights turned off after 1am to save money. It was a contributory factor in that Christchurch murder so I understand.
I am prepared to pay more tax along with others, in order to try to fix the dire state of the country. I am living on a modest pension, but recognise that schools for all need to be paid for. The rich don't seem keen to participate in paying for stuff for the general good when they can go private just for themselves.
On what basis do you say that Seth? 'The rich don't seem keen to participate in paying for stuff for the general good when they can go private just for themselves'
It's not the impression I get in the main from those earning say 100k plus (but not sure where you are cutting the line for rich). They are already massively participating and most I know would take another small tax hit.
In Tory councils they have been known to have street lights turned off after 1am to save money. It was a contributory factor in that Christchurch murder so I understand.
That may well all be true (over 75% of councils in England now turn them off or dim them and they certainly aren't all Conservative, some don't even have a single conservative seat), but not sure how that fits with your comment around the rich not keen to participate in paying for stuff for the general good when they can just go private?
If you look at the key things the 'rich' may buy privately such as Education and Private Healthcare, paying for either of those doesn't effect at all what that individual will pay in taxation towards the non private element of education and healthcare. In my experience as mentioned most people rich or otherwise would be prepared to pay a small amount of additional tax as they have (in regards to the richer end of society) for the past 8 years. And before anyone mentions the 50p band, labour brought that in during the last 5 weeks of their 13 year reign which prior to that the maximum was 40%. Since 2010 the conservatives have had 50p for around 3 years and 45p ever since.
In the case of the richer end of society taxation is and has been higher since 2010 than it was under the previous 13 years of Labour and also the lower earners have a lower tax take since then (in regards to tax on income).
@guinnessaddick JRM is a kn0b of the highest order. However his view sadly isn't that unusual in highly religious circles (unfortunately).
Rob and CAFCfan, to get the thread back on track. How do the Tories need to change? Stop pretending that high paid execs who don't really earn their exorbinate salaries, pay too much tax.
As usual, you've missed the key points because of your focus on vindictive left-wing ideology.
First, these people pay a significant amount of tax; they will have things like large mortgages on large expensive properties and kids at private school. If you slaughter them with more tax there will be other consequences. (Like more workers at JLR losing their jobs, no overseas footballers in the Premier League, etc, etc.)
Second, you could tax them at a rate of 100% but because there are so few of them, the extra tax take would not be worth a hill of beans in terms of actually paying for public services that people demand.
Third, "how do the Tories need to change" and the tax paid by high earners has no correlation, save that the high earners are paying more tax now than they ever did under previous administrations.
Fourth, I repeat, if you want the Govt. or the current opposition for that matter to spend huge extra sums on public services, I'm afraid the public, at large will have to pay for it. It's the only way that sufficient extra money could be raised. My opinion, for what it's worth is that the voting public would not stand for it.
Fifth, rather than looking at headline tax rates, you get a better picture in other ways. So, by blending the tax and benefits systems, you find out that the average of the poorest quintile of households pays minus 45.4% tax whereas the average household in the richest decile pays 32.5%. In other words, the tax/benefit systems combined are very progressive indeed. However, the picture changes dramatically if you then add in "benefits in kind", like free health service, education, housing subsidies, etc. The percentages then are minus 181% and 26% respectively. In cash terms, The average rich household pays £20,777 more in tax than they receive in benefits and benefits in kind, whereas the average poor household receives £9,982 more in benefits than they pay in taxes.
Now, there's a discussion to be had about whether this level of redistribution is right. But the truth of the matter is that for the Tories or anyone else to redistribute further, it has to be the case that either through taxation or a diminution of economic prospects or both, it will be the middle three quintiles that have to pay for it. I'll leave you to decide whether they have the stomach for such a change.
And you have simplified the argument to jealousy. If tax is used as a form wealth redistribution, if there has been a concentration of wealth as there has been over the last ten years, shouldn't the wealthy be paying more tax?
but to answer your points:
1. "First, these people pay a significant amount of tax" I think you mean the tax they pay is a large amount of money. It arrogance to suggest that tax taken from poorer households in insignificant, especially when it takes up a greater proportion of income. As poorer households are now paying a greater proportion of tax than they were ten years ago, you could say they were paying significantly more. "There will be other consequences"? Change the record mate, your mob have been peddling that since the eighties. I'm sick of the trickle down argument, how an economy built from the ground up? Having a large home and private school are choices. (There is a whole other argument about the good of the premier league, the wealthy foreign footballers and owners for our economy and taxation system.)
2. The top 10% of earners pay 27% of the total taxation,the middle class about 40% and the poorest 43%. This is disproportionate to wealth and income distribution.
3. Equating tax with income tax alone is dangerous as well as wrong because it serves to justify the self-interested fiscal policy and politics in general. But no they don't. 50% income tax under Brown and 60% under Thatcher (one of those vindictive lefties no doubt).
4. I agree with you, but they kind of already are. Income tax raises just 27% of the UK’s total tax revenue. This is less than is raised by VAT and other indirect taxes (29%) and not much more than is raised by national insurance (19%).
5. All you have illustrated is that we have a progressive system but it has become less progressive over the last 40 years. There was a report on the BBC last week that the richest households have seen an increase in benefits and poorer households have seen a cut. This is not that surprising when you consider how the Tories have shifted a lot of the taxation burden and benefit provision to local authorities and how they have funded non-Tory councils. More importantly, if you look at the proportion of income spent on taxation, then this has fallen for the richest households but risen in the poorest mainly due to wage stagnation, inflation and again, how income tax only represents 27% of the tax take.
It's all very well saying up the taxes, but lots of people are struggling to make ends meet as it is. Wages rises lag behind infaltion or have been frozen. I don't think taxing the rich more so it can be redistributed in the form of benefits suits nobody. How about, if people were paid more, then tax receipts would go up and there would be more money to spend on health, education.... The better that the nation's health and education is, then I suspect the greater benefit to society and the economy etc.
So I wouldn't expect a tax hike for a fatcat executive would make much difference to the counties tax receipts as @cafcfan said, but it would make a difference to his or her staff if they paid them more instead! The percentage of what executives earn compared to their staff has continued to grow apace for years. Just a thought.
The bands (first link) are the bands and yes they kick in and end at the points in that link, i've not said someone earning over £150k pays 45% tax on all of their income, they pay 45% above £150k and due to loss of the personal allowance they actually pay just about 45% in the 40% band, i.e. earnings over 46k income tax is effectively at 45%.
By the time you add NI on I would say most of the high paid execs who don't really earn their exorbinate salaries, pay almost 50% of their earnings in income Tax & National insurance.
I've never made any comment on what other countries bands or rates are.
So not the 58%, 60% and 70% mentioned in your original post on the subject?
I am prepared to pay more tax along with others, in order to try to fix the dire state of the country. I am living on a modest pension, but recognise that schools for all need to be paid for. The rich don't seem keen to participate in paying for stuff for the general good when they can go private just for themselves.
On what basis do you say that Seth? 'The rich don't seem keen to participate in paying for stuff for the general good when they can go private just for themselves'
It's not the impression I get in the main from those earning say 100k plus (but not sure where you are cutting the line for rich). They are already massively participating and most I know would take another small tax hit.
In Tory councils they have been known to have street lights turned off after 1am to save money. It was a contributory factor in that Christchurch murder so I understand.
That may well all be true (over 75% of councils in England now turn them off or dim them and they certainly aren't all Conservative, some don't even have a single conservative seat), but not sure how that fits with your comment around the rich not keen to participate in paying for stuff for the general good when they can just go private?
If you look at the key things the 'rich' may buy privately such as Education and Private Healthcare, paying for either of those doesn't effect at all what that individual will pay in taxation towards the non private element of education and healthcare. In my experience as mentioned most people rich or otherwise would be prepared to pay a small amount of additional tax as they have (in regards to the richer end of society) for the past 8 years. And before anyone mentions the 50p band, labour brought that in during the last 5 weeks of their 13 year reign which prior to that the maximum was 40%. Since 2010 the conservatives have had 50p for around 3 years and 45p ever since.
In the case of the richer end of society taxation is and has been higher since 2010 than it was under the previous 13 years of Labour and also the lower earners have a lower tax take since then (in regards to tax on income).
@guinnessaddick JRM is a kn0b of the highest order. However his view sadly isn't that unusual in highly religious circles (unfortunately).
VAT and indirect taxes make up more of the total take than income tax.
Rob and CAFCfan, to get the thread back on track. How do the Tories need to change? Stop pretending that high paid execs who don't really earn their exorbinate salaries, pay too much tax.
As usual, you've missed the key points because of your focus on vindictive left-wing ideology.
First, these people pay a significant amount of tax; they will have things like large mortgages on large expensive properties and kids at private school. If you slaughter them with more tax there will be other consequences. (Like more workers at JLR losing their jobs, no overseas footballers in the Premier League, etc, etc.)
Second, you could tax them at a rate of 100% but because there are so few of them, the extra tax take would not be worth a hill of beans in terms of actually paying for public services that people demand.
Third, "how do the Tories need to change" and the tax paid by high earners has no correlation, save that the high earners are paying more tax now than they ever did under previous administrations.
Fourth, I repeat, if you want the Govt. or the current opposition for that matter to spend huge extra sums on public services, I'm afraid the public, at large will have to pay for it. It's the only way that sufficient extra money could be raised. My opinion, for what it's worth is that the voting public would not stand for it.
Fifth, rather than looking at headline tax rates, you get a better picture in other ways. So, by blending the tax and benefits systems, you find out that the average of the poorest quintile of households pays minus 45.4% tax whereas the average household in the richest decile pays 32.5%. In other words, the tax/benefit systems combined are very progressive indeed. However, the picture changes dramatically if you then add in "benefits in kind", like free health service, education, housing subsidies, etc. The percentages then are minus 181% and 26% respectively. In cash terms, The average rich household pays £20,777 more in tax than they receive in benefits and benefits in kind, whereas the average poor household receives £9,982 more in benefits than they pay in taxes.
Now, there's a discussion to be had about whether this level of redistribution is right. But the truth of the matter is that for the Tories or anyone else to redistribute further, it has to be the case that either through taxation or a diminution of economic prospects or both, it will be the middle three quintiles that have to pay for it. I'll leave you to decide whether they have the stomach for such a change.
2. The top 10% of earners pay 27% of the total taxation,the middle class about 40% and the poorest 43%. This is disproportionate to wealth and income distribution.
I am prepared to pay more tax along with others, in order to try to fix the dire state of the country. I am living on a modest pension, but recognise that schools for all need to be paid for. The rich don't seem keen to participate in paying for stuff for the general good when they can go private just for themselves.
On what basis do you say that Seth? 'The rich don't seem keen to participate in paying for stuff for the general good when they can go private just for themselves'
It's not the impression I get in the main from those earning say 100k plus (but not sure where you are cutting the line for rich). They are already massively participating and most I know would take another small tax hit.
In Tory councils they have been known to have street lights turned off after 1am to save money. It was a contributory factor in that Christchurch murder so I understand.
That may well all be true (over 75% of councils in England now turn them off or dim them and they certainly aren't all Conservative, some don't even have a single conservative seat), but not sure how that fits with your comment around the rich not keen to participate in paying for stuff for the general good when they can just go private?
If you look at the key things the 'rich' may buy privately such as Education and Private Healthcare, paying for either of those doesn't effect at all what that individual will pay in taxation towards the non private element of education and healthcare. In my experience as mentioned most people rich or otherwise would be prepared to pay a small amount of additional tax as they have (in regards to the richer end of society) for the past 8 years. And before anyone mentions the 50p band, labour brought that in during the last 5 weeks of their 13 year reign which prior to that the maximum was 40%. Since 2010 the conservatives have had 50p for around 3 years and 45p ever since.
In the case of the richer end of society taxation is and has been higher since 2010 than it was under the previous 13 years of Labour and also the lower earners have a lower tax take since then (in regards to tax on income).
@guinnessaddick JRM is a kn0b of the highest order. However his view sadly isn't that unusual in highly religious circles (unfortunately).
I think my rather rushed comment is about Tory capitalist mindset. For a few quid more the Tory council could have had fireproof cladding on Grenfell Tower. However Theresa May compared Lambeth and Wandsworth and was nearly wetting herself promoting corner cutting Tory Wandsworth.
Rob and CAFCfan, to get the thread back on track. How do the Tories need to change? Stop pretending that high paid execs who don't really earn their exorbinate salaries, pay too much tax.
As usual, you've missed the key points because of your focus on vindictive left-wing ideology.
First, these people pay a significant amount of tax; they will have things like large mortgages on large expensive properties and kids at private school. If you slaughter them with more tax there will be other consequences. (Like more workers at JLR losing their jobs, no overseas footballers in the Premier League, etc, etc.)
Second, you could tax them at a rate of 100% but because there are so few of them, the extra tax take would not be worth a hill of beans in terms of actually paying for public services that people demand.
Third, "how do the Tories need to change" and the tax paid by high earners has no correlation, save that the high earners are paying more tax now than they ever did under previous administrations.
Fourth, I repeat, if you want the Govt. or the current opposition for that matter to spend huge extra sums on public services, I'm afraid the public, at large will have to pay for it. It's the only way that sufficient extra money could be raised. My opinion, for what it's worth is that the voting public would not stand for it.
Fifth, rather than looking at headline tax rates, you get a better picture in other ways. So, by blending the tax and benefits systems, you find out that the average of the poorest quintile of households pays minus 45.4% tax whereas the average household in the richest decile pays 32.5%. In other words, the tax/benefit systems combined are very progressive indeed. However, the picture changes dramatically if you then add in "benefits in kind", like free health service, education, housing subsidies, etc. The percentages then are minus 181% and 26% respectively. In cash terms, The average rich household pays £20,777 more in tax than they receive in benefits and benefits in kind, whereas the average poor household receives £9,982 more in benefits than they pay in taxes.
Now, there's a discussion to be had about whether this level of redistribution is right. But the truth of the matter is that for the Tories or anyone else to redistribute further, it has to be the case that either through taxation or a diminution of economic prospects or both, it will be the middle three quintiles that have to pay for it. I'll leave you to decide whether they have the stomach for such a change.
2. The top 10% of earners pay 27% of the total taxation,the middle class about 40% and the poorest 43%. This is disproportionate to wealth and income distribution.
I am prepared to pay more tax along with others, in order to try to fix the dire state of the country. I am living on a modest pension, but recognise that schools for all need to be paid for. The rich don't seem keen to participate in paying for stuff for the general good when they can go private just for themselves.
On what basis do you say that Seth? 'The rich don't seem keen to participate in paying for stuff for the general good when they can go private just for themselves'
It's not the impression I get in the main from those earning say 100k plus (but not sure where you are cutting the line for rich). They are already massively participating and most I know would take another small tax hit.
In Tory councils they have been known to have street lights turned off after 1am to save money. It was a contributory factor in that Christchurch murder so I understand.
That may well all be true (over 75% of councils in England now turn them off or dim them and they certainly aren't all Conservative, some don't even have a single conservative seat), but not sure how that fits with your comment around the rich not keen to participate in paying for stuff for the general good when they can just go private?
If you look at the key things the 'rich' may buy privately such as Education and Private Healthcare, paying for either of those doesn't effect at all what that individual will pay in taxation towards the non private element of education and healthcare. In my experience as mentioned most people rich or otherwise would be prepared to pay a small amount of additional tax as they have (in regards to the richer end of society) for the past 8 years. And before anyone mentions the 50p band, labour brought that in during the last 5 weeks of their 13 year reign which prior to that the maximum was 40%. Since 2010 the conservatives have had 50p for around 3 years and 45p ever since.
In the case of the richer end of society taxation is and has been higher since 2010 than it was under the previous 13 years of Labour and also the lower earners have a lower tax take since then (in regards to tax on income).
@guinnessaddick JRM is a kn0b of the highest order. However his view sadly isn't that unusual in highly religious circles (unfortunately).
VAT and indirect taxes make up more of the total take than income tax.
Totally agree from stamp duty, to IHT to VAT to Corp tax etc. This side of the conversation started with the comment we don’t have a progressive tax system.
EDIT; Just looked and Income tax is about 177bn, NI 125bn (which would include employers I presume) from around 570bn. So they make up over half of the total tax take which is more than I thought.
IHT is about 5bn, Stamp duty 12bn, capital gains 8bn.
"It arrogance to suggest that tax taken from poorer households in insignificant, especially when it takes up a greater proportion of income. As poorer households are now paying a greater proportion of tax than they were ten years ago, you could say they were paying significantly more."
The bold part, is that a greater proportion of their income is now taxed? Not necessarily doubting you but struggling to see why/how.
Council Tax Freeze over a large part of the last 10 years Income tax rate hasn't increased Tax free allowance has nearly doubled VAT went back to 17.5% in 2010 and then the Tories put it up to 20% I think about 2011/12.
I am prepared to pay more tax along with others, in order to try to fix the dire state of the country. I am living on a modest pension, but recognise that schools for all need to be paid for. The rich don't seem keen to participate in paying for stuff for the general good when they can go private just for themselves.
On what basis do you say that Seth? 'The rich don't seem keen to participate in paying for stuff for the general good when they can go private just for themselves'
It's not the impression I get in the main from those earning say 100k plus (but not sure where you are cutting the line for rich). They are already massively participating and most I know would take another small tax hit.
In Tory councils they have been known to have street lights turned off after 1am to save money. It was a contributory factor in that Christchurch murder so I understand.
That may well all be true (over 75% of councils in England now turn them off or dim them and they certainly aren't all Conservative, some don't even have a single conservative seat), but not sure how that fits with your comment around the rich not keen to participate in paying for stuff for the general good when they can just go private?
If you look at the key things the 'rich' may buy privately such as Education and Private Healthcare, paying for either of those doesn't effect at all what that individual will pay in taxation towards the non private element of education and healthcare. In my experience as mentioned most people rich or otherwise would be prepared to pay a small amount of additional tax as they have (in regards to the richer end of society) for the past 8 years. And before anyone mentions the 50p band, labour brought that in during the last 5 weeks of their 13 year reign which prior to that the maximum was 40%. Since 2010 the conservatives have had 50p for around 3 years and 45p ever since.
In the case of the richer end of society taxation is and has been higher since 2010 than it was under the previous 13 years of Labour and also the lower earners have a lower tax take since then (in regards to tax on income).
@guinnessaddick JRM is a kn0b of the highest order. However his view sadly isn't that unusual in highly religious circles (unfortunately).
VAT and indirect taxes make up more of the total take than income tax.
Totally agree from stamp duty, to IHT to VAT to Corp tax etc. This side of the conversation started with the comment we don’t have a progressive tax system.
EDIT; Just looked and Income tax is about 177bn, NI 125bn (which would include employers I presume) from around 570bn. So they make up over half of the total tax take which is more than I thought.
IHT is about 5bn, Stamp duty 12bn, capital gains 8bn.
ni is a regressive tax.
In answer to your other question, yes a greater proportion of their income is taken up by tax. But that is all taxes not just income.
All of those figures are in isolation. The rate of vat might not of changed but inflation has increased the cost which increases the vat but wages haven't increased at the same rate as an example.
I am prepared to pay more tax along with others, in order to try to fix the dire state of the country. I am living on a modest pension, but recognise that schools for all need to be paid for. The rich don't seem keen to participate in paying for stuff for the general good when they can go private just for themselves.
On what basis do you say that Seth? 'The rich don't seem keen to participate in paying for stuff for the general good when they can go private just for themselves'
It's not the impression I get in the main from those earning say 100k plus (but not sure where you are cutting the line for rich). They are already massively participating and most I know would take another small tax hit.
In Tory councils they have been known to have street lights turned off after 1am to save money. It was a contributory factor in that Christchurch murder so I understand.
That may well all be true (over 75% of councils in England now turn them off or dim them and they certainly aren't all Conservative, some don't even have a single conservative seat), but not sure how that fits with your comment around the rich not keen to participate in paying for stuff for the general good when they can just go private?
If you look at the key things the 'rich' may buy privately such as Education and Private Healthcare, paying for either of those doesn't effect at all what that individual will pay in taxation towards the non private element of education and healthcare. In my experience as mentioned most people rich or otherwise would be prepared to pay a small amount of additional tax as they have (in regards to the richer end of society) for the past 8 years. And before anyone mentions the 50p band, labour brought that in during the last 5 weeks of their 13 year reign which prior to that the maximum was 40%. Since 2010 the conservatives have had 50p for around 3 years and 45p ever since.
In the case of the richer end of society taxation is and has been higher since 2010 than it was under the previous 13 years of Labour and also the lower earners have a lower tax take since then (in regards to tax on income).
@guinnessaddick JRM is a kn0b of the highest order. However his view sadly isn't that unusual in highly religious circles (unfortunately).
VAT and indirect taxes make up more of the total take than income tax.
Totally agree from stamp duty, to IHT to VAT to Corp tax etc. This side of the conversation started with the comment we don’t have a progressive tax system.
EDIT; Just looked and Income tax is about 177bn, NI 125bn (which would include employers I presume) from around 570bn. So they make up over half of the total tax take which is more than I thought.
IHT is about 5bn, Stamp duty 12bn, capital gains 8bn.
ni is a regressive tax.
In answer to your other question, yes a greater proportion of their income is taken up by tax. But that is all taxes not just income.
NI is both progressive and then regressive depending where on the scale you fit. As it's no longer used for it's original purpose I don't know why they don't get rid of it and add it to income tax.
I've heard it said many times that the lower earners have a greater proportion taken up by tax but struggling to find any real facts/figures confirming it.
I did find this, but struggle to see the numbers making sense, not sure where the top 10% starts but on the basis that anyone earning in excess of 125k will just on income be paying over 40% in tax (NI & Income) on their salary. If I included VAT and council tax then broadly i'd be at 60% whereas the link says the lowest 10% of earners are at 42%, i'd be higher than that purely on income/NI tax before VAT, IPT, Council etc.
I've heard it said many times that the lower earners have a greater proportion taken up by tax but struggling to find any real facts/figures confirming it.e> Rob you seem to be a reasonably intelligent bloke but why do you need a link to confirm this which is patently obvious. Although I am sure the Daily Mail will have an article somewhere denying it.
I've heard it said many times that the lower earners have a greater proportion taken up by tax but struggling to find any real facts/figures confirming it.e> Rob you seem to be a reasonably intelligent bloke but why do you need a link to confirm this which is patently obvious. Although I am sure the Daily Mail will have an article somewhere denying it.
Thats a bit rich from someone who asked for links to understand the income tax system.....
If it's so patently obvious let me know why, no links needed just the calculated numbers. As a head start someone earning £2m purely on Income & NI pays just under 50% tax, if they spend £300k on Vatable items thats 50k, say 3k Council tax and you are well over 50% of income paid in those taxes.
I'm struggling to get a low earner to that level........
Conversely someone on 18k a year pays circa 2,400 on income tax and and NI, add say 1k council tax totals a bit shy of 20%, even if every penny of the remaining 15,600 is spent on VATable items taking their total tax to 33%.
I am prepared to pay more tax along with others, in order to try to fix the dire state of the country. I am living on a modest pension, but recognise that schools for all need to be paid for. The rich don't seem keen to participate in paying for stuff for the general good when they can go private just for themselves.
On what basis do you say that Seth? 'The rich don't seem keen to participate in paying for stuff for the general good when they can go private just for themselves'
It's not the impression I get in the main from those earning say 100k plus (but not sure where you are cutting the line for rich). They are already massively participating and most I know would take another small tax hit.
In Tory councils they have been known to have street lights turned off after 1am to save money. It was a contributory factor in that Christchurch murder so I understand.
That may well all be true (over 75% of councils in England now turn them off or dim them and they certainly aren't all Conservative, some don't even have a single conservative seat), but not sure how that fits with your comment around the rich not keen to participate in paying for stuff for the general good when they can just go private?
If you look at the key things the 'rich' may buy privately such as Education and Private Healthcare, paying for either of those doesn't effect at all what that individual will pay in taxation towards the non private element of education and healthcare. In my experience as mentioned most people rich or otherwise would be prepared to pay a small amount of additional tax as they have (in regards to the richer end of society) for the past 8 years. And before anyone mentions the 50p band, labour brought that in during the last 5 weeks of their 13 year reign which prior to that the maximum was 40%. Since 2010 the conservatives have had 50p for around 3 years and 45p ever since.
In the case of the richer end of society taxation is and has been higher since 2010 than it was under the previous 13 years of Labour and also the lower earners have a lower tax take since then (in regards to tax on income).
@guinnessaddick JRM is a kn0b of the highest order. However his view sadly isn't that unusual in highly religious circles (unfortunately).
VAT and indirect taxes make up more of the total take than income tax.
Totally agree from stamp duty, to IHT to VAT to Corp tax etc. This side of the conversation started with the comment we don’t have a progressive tax system.
EDIT; Just looked and Income tax is about 177bn, NI 125bn (which would include employers I presume) from around 570bn. So they make up over half of the total tax take which is more than I thought.
IHT is about 5bn, Stamp duty 12bn, capital gains 8bn.
ni is a regressive tax.
In answer to your other question, yes a greater proportion of their income is taken up by tax. But that is all taxes not just income.
NI is both progressive and then regressive depending where on the scale you fit. As it's no longer used for it's original purpose I don't know why they don't get rid of it and add it to income tax.
I've heard it said many times that the lower earners have a greater proportion taken up by tax but struggling to find any real facts/figures confirming it.
I did find this, but struggle to see the numbers making sense, not sure where the top 10% starts but on the basis that anyone earning in excess of 125k will just on income be paying over 40% in tax (NI & Income) on their salary. If I included VAT and council tax then broadly i'd be at 60% whereas the link says the lowest 10% of earners are at 42%, i'd be higher than that purely on income/NI tax before VAT, IPT, Council etc.
"Britain's poorest people pay more of their income in taxes than the very richest, official figures reveal"
Which is actually incorrect (or misleading), they are actually comparing the top 10% with the bottom 10%, the top 10% earning anything over about 40k, bottom 10% under 8,500. I suspect the average person doesn't consider the 'very richest' to be on 45k.
So totally agree, someone on 50/60k etc will pay a lower percentage tax (all tax) than someone on 8k. Although even then probably depends how you treat benefit/tax credits.
Once you get to about 100k salary they will be the highest tax payers by percentage.
If you want to have it truly progressive you probably need to increase taxes for the 40k-80k earners.
I'd love to see any calcs that showed someone on more than 125k pays a lower rate than anyone on under say 40k, its just not possible that I can see.
"Britain's poorest people pay more of their income in taxes than the very richest, official figures reveal"
Which is actually incorrect (or misleading), they are actually comparing the top 10% with the bottom 10%, the top 10% earning anything over about 40k, bottom 10% under 8,500. I suspect the average person doesn't consider the 'very richest' to be on 45k.
So totally agree, someone on 50/60k etc will pay a lower percentage tax (all tax) than someone on 8k. Although even then probably depends how you treat benefit/tax credits.
Once you get to about 100k salary they will be the highest tax payers by percentage.
If you want to have it truly progressive you probably need to increase taxes for the 40k-80k earners.
I'd love to see any calcs that showed someone on more than 125k pays a lower rate than anyone on under say 40k, its just not possible that I can see.
Which is why you would hire an 'accountant' to do that for you!
"Britain's poorest people pay more of their income in taxes than the very richest, official figures reveal"
Which is actually incorrect (or misleading), they are actually comparing the top 10% with the bottom 10%, the top 10% earning anything over about 40k, bottom 10% under 8,500. I suspect the average person doesn't consider the 'very richest' to be on 45k.
So totally agree, someone on 50/60k etc will pay a lower percentage tax (all tax) than someone on 8k. Although even then probably depends how you treat benefit/tax credits.
Once you get to about 100k salary they will be the highest tax payers by percentage.
If you want to have it truly progressive you probably need to increase taxes for the 40k-80k earners.
I'd love to see any calcs that showed someone on more than 125k pays a lower rate than anyone on under say 40k, its just not possible that I can see.
Which is why you would hire an 'accountant' to do that for you!
It is the 1% they should really go after.
As PAYE not sure an accountant can help
I'm not so sure the 1% is the problem, for sure they'll be problem cases within that 1% avoiding tax as we have seen, but an awful lot will be PAYE and paying their roughly 50% Income/NI Tax.
As much as I agree it's not on, the country goes mad when you see a celeb doing some sort of legal tax dodge (or not legal). Yet I've yet to meet a tradesman who declares all their income, in the last few months my carpenter asked my advice on a mortgage as the bank will only lend him £65k - well what do you expect when you 'officially' earn 18k a year Some years that just work for me ........ yet cash work/in hand and not declaring somehow is ok it seems........
"Britain's poorest people pay more of their income in taxes than the very richest, official figures reveal"
Which is actually incorrect (or misleading), they are actually comparing the top 10% with the bottom 10%, the top 10% earning anything over about 40k, bottom 10% under 8,500. I suspect the average person doesn't consider the 'very richest' to be on 45k.
So totally agree, someone on 50/60k etc will pay a lower percentage tax (all tax) than someone on 8k. Although even then probably depends how you treat benefit/tax credits.
Once you get to about 100k salary they will be the highest tax payers by percentage.
If you want to have it truly progressive you probably need to increase taxes for the 40k-80k earners.
I'd love to see any calcs that showed someone on more than 125k pays a lower rate than anyone on under say 40k, its just not possible that I can see.
Which is why you would hire an 'accountant' to do that for you!
It is the 1% they should really go after.
As PAYE not sure an accountant can help
I'm not so sure the 1% is the problem, for sure they'll be problem cases within that 1% avoiding tax as we have seen, but an awful lot will be PAYE and paying their roughly 50% Income/NI Tax.
As much as I agree it's not on, the country goes mad when you see a celeb doing some sort of legal tax dodge (or not legal). Yet I've yet to meet a tradesman who declares all their income, in the last few months my carpenter asked my advice on a mortgage as the bank will only lend him £65k - well what do you expect when you 'officially' earn 18k a year Some years that just work for me ........ yet cash work/in hand and not declaring somehow is ok it seems........
Not sure who suggested undeclared income was any better, neither have entered in to the social contract, both be damned. But I think a lot of 'accountancy' is legalised thievery. Personally I think there is little moral difference between tax evasion and avoidance. Many people hide behind the law, using the British judiciary, a complex tax system and a woefully run tax inspectorate to play out their self-serving interests at the cost of the public.
Comments
Current income tax rate bands;
https://www.gov.uk/income-tax-rates
Income over £100k and the loss of personal allowance:
https://www.gov.uk/income-tax-rates/income-over-100000
Child benefit tax charge;
https://www.gov.uk/child-benefit-tax-charge
Pension tapered annual allowance:
https://www.gov.uk/guidance/pension-schemes-work-out-your-tapered-annual-allowance
The bands (first link) are the bands and yes they kick in and end at the points in that link, i've not said someone earning over £150k pays 45% tax on all of their income, they pay 45% above £150k and due to loss of the personal allowance they actually pay just about 45% in the 40% band, i.e. earnings over 46k income tax is effectively at 45%.
By the time you add NI on I would say most of the high paid execs who don't really earn their exorbinate salaries, pay almost 50% of their earnings in income Tax & National insurance.
I've never made any comment on what other countries bands or rates are.
First, these people pay a significant amount of tax; they will have things like large mortgages on large expensive properties and kids at private school. If you slaughter them with more tax there will be other consequences. (Like more workers at JLR losing their jobs, no overseas footballers in the Premier League, etc, etc.)
Second, you could tax them at a rate of 100% but because there are so few of them, the extra tax take would not be worth a hill of beans in terms of actually paying for public services that people demand.
Third, "how do the Tories need to change" and the tax paid by high earners has no correlation, save that the high earners are paying more tax now than they ever did under previous administrations.
Fourth, I repeat, if you want the Govt. or the current opposition for that matter to spend huge extra sums on public services, I'm afraid the public, at large will have to pay for it. It's the only way that sufficient extra money could be raised. My opinion, for what it's worth is that the voting public would not stand for it.
Fifth, rather than looking at headline tax rates, you get a better picture in other ways. So, by blending the tax and benefits systems, you find out that the average of the poorest quintile of households pays minus 45.4% tax whereas the average household in the richest decile pays 32.5%. In other words, the tax/benefit systems combined are very progressive indeed. However, the picture changes dramatically if you then add in "benefits in kind", like free health service, education, housing subsidies, etc. The percentages then are minus 181% and 26% respectively. In cash terms, The average rich household pays £20,777 more in tax than they receive in benefits and benefits in kind, whereas the average poor household receives £9,982 more in benefits than they pay in taxes.
Now, there's a discussion to be had about whether this level of redistribution is right. But the truth of the matter is that for the Tories or anyone else to redistribute further, it has to be the case that either through taxation or a diminution of economic prospects or both, it will be the middle three quintiles that have to pay for it. I'll leave you to decide whether they have the stomach for such a change.
I am living on a modest pension, but recognise that schools for all need to be paid for.
The rich don't seem keen to participate in paying for stuff for the general good when they can go private just for themselves.
It's not the impression I get in the main from those earning say 100k plus (but not sure where you are cutting the line for rich). They are already massively participating and most I know would take another small tax hit.
If you look at the key things the 'rich' may buy privately such as Education and Private Healthcare, paying for either of those doesn't effect at all what that individual will pay in taxation towards the non private element of education and healthcare. In my experience as mentioned most people rich or otherwise would be prepared to pay a small amount of additional tax as they have (in regards to the richer end of society) for the past 8 years. And before anyone mentions the 50p band, labour brought that in during the last 5 weeks of their 13 year reign which prior to that the maximum was 40%. Since 2010 the conservatives have had 50p for around 3 years and 45p ever since.
In the case of the richer end of society taxation is and has been higher since 2010 than it was under the previous 13 years of Labour and also the lower earners have a lower tax take since then (in regards to tax on income).
@guinnessaddick JRM is a kn0b of the highest order. However his view sadly isn't that unusual in highly religious circles (unfortunately).
but to answer your points:
1. "First, these people pay a significant amount of tax" I think you mean the tax they pay is a large amount of money. It arrogance to suggest that tax taken from poorer households in insignificant, especially when it takes up a greater proportion of income. As poorer households are now paying a greater proportion of tax than they were ten years ago, you could say they were paying significantly more.
"There will be other consequences"? Change the record mate, your mob have been peddling that since the eighties. I'm sick of the trickle down argument, how an economy built from the ground up? Having a large home and private school are choices. (There is a whole other argument about the good of the premier league, the wealthy foreign footballers and owners for our economy and taxation system.)
2. The top 10% of earners pay 27% of the total taxation,the middle class about 40% and the poorest 43%. This is disproportionate to wealth and income distribution.
3. Equating tax with income tax alone is dangerous as well as wrong because it serves to justify the self-interested fiscal policy and politics in general. But no they don't. 50% income tax under Brown and 60% under Thatcher (one of those vindictive lefties no doubt).
4. I agree with you, but they kind of already are. Income tax raises just 27% of the UK’s total tax revenue. This is less than is raised by VAT and other indirect taxes (29%) and not much more than is raised by national insurance (19%).
5. All you have illustrated is that we have a progressive system but it has become less progressive over the last 40 years. There was a report on the BBC last week that the richest households have seen an increase in benefits and poorer households have seen a cut. This is not that surprising when you consider how the Tories have shifted a lot of the taxation burden and benefit provision to local authorities and how they have funded non-Tory councils. More importantly, if you look at the proportion of income spent on taxation, then this has fallen for the richest households but risen in the poorest mainly due to wage stagnation, inflation and again, how income tax only represents 27% of the tax take.
So I wouldn't expect a tax hike for a fatcat executive would make much difference to the counties tax receipts as @cafcfan said, but it would make a difference to his or her staff if they paid them more instead! The percentage of what executives earn compared to their staff has continued to grow apace for years. Just a thought.
However Theresa May compared Lambeth and Wandsworth and was nearly wetting herself promoting corner cutting Tory Wandsworth.
EDIT; Just looked and Income tax is about 177bn, NI 125bn (which would include employers I presume) from around 570bn. So they make up over half of the total tax take which is more than I thought.
IHT is about 5bn, Stamp duty 12bn, capital gains 8bn.
"It arrogance to suggest that tax taken from poorer households in insignificant, especially when it takes up a greater proportion of income. As poorer households are now paying a greater proportion of tax than they were ten years ago, you could say they were paying significantly more."
The bold part, is that a greater proportion of their income is now taxed? Not necessarily doubting you but struggling to see why/how.
Council Tax Freeze over a large part of the last 10 years
Income tax rate hasn't increased
Tax free allowance has nearly doubled
VAT went back to 17.5% in 2010 and then the Tories put it up to 20% I think about 2011/12.
Although income this is quite interesting;
https://www.telegraph.co.uk/news/2017/03/19/tax-burden-wealthy-has-trebled-since-1970s-telegraph-analysis/
In answer to your other question, yes a greater proportion of their income is taken up by tax. But that is all taxes not just income.
All of those figures are in isolation. The rate of vat might not of changed but inflation has increased the cost which increases the vat but wages haven't increased at the same rate as an example.
I've heard it said many times that the lower earners have a greater proportion taken up by tax but struggling to find any real facts/figures confirming it.
I did find this, but struggle to see the numbers making sense, not sure where the top 10% starts but on the basis that anyone earning in excess of 125k will just on income be paying over 40% in tax (NI & Income) on their salary. If I included VAT and council tax then broadly i'd be at 60% whereas the link says the lowest 10% of earners are at 42%, i'd be higher than that purely on income/NI tax before VAT, IPT, Council etc.
https://www.independent.co.uk/news/uk/home-news/lowest-earners-more-tax-richest-office-national-statistics-inequality-council-tax-vat-equality-trust-a7704331.html
That said I don't think that link takes account of negative tax, i.e. tax credits and the like.
I still believe as I have said a number of times, taking the lowest earners out of income tax/ni will go a long way to helping with this.
Rob you seem to be a reasonably intelligent bloke but why do you need a link to confirm this which is patently obvious. Although I am sure the Daily Mail will have an article somewhere denying it.
Rob you seem to be a reasonably intelligent bloke but why do you need a link to confirm this which is patently obvious. Although I am sure the Daily Mail will have an article somewhere denying it.
Thats a bit rich from someone who asked for links to understand the income tax system.....
If it's so patently obvious let me know why, no links needed just the calculated numbers. As a head start someone earning £2m purely on Income & NI pays just under 50% tax, if they spend £300k on Vatable items thats 50k, say 3k Council tax and you are well over 50% of income paid in those taxes.
I'm struggling to get a low earner to that level........
https://mirror.co.uk/news/uk-news/britains-poorest-people-pay-more-8039058
On NI, over 45k you pay a lower percentage, the more you earn the lower the rate, that is about as regressive as you can get.
"Britain's poorest people pay more of their income in taxes than the very richest, official figures reveal"
Which is actually incorrect (or misleading), they are actually comparing the top 10% with the bottom 10%, the top 10% earning anything over about 40k, bottom 10% under 8,500. I suspect the average person doesn't consider the 'very richest' to be on 45k.
So totally agree, someone on 50/60k etc will pay a lower percentage tax (all tax) than someone on 8k. Although even then probably depends how you treat benefit/tax credits.
Once you get to about 100k salary they will be the highest tax payers by percentage.
If you want to have it truly progressive you probably need to increase taxes for the 40k-80k earners.
I'd love to see any calcs that showed someone on more than 125k pays a lower rate than anyone on under say 40k, its just not possible that I can see.
Which is why you would hire an 'accountant' to do that for you!
It is the 1% they should really go after.
I'm not so sure the 1% is the problem, for sure they'll be problem cases within that 1% avoiding tax as we have seen, but an awful lot will be PAYE and paying their roughly 50% Income/NI Tax.
As much as I agree it's not on, the country goes mad when you see a celeb doing some sort of legal tax dodge (or not legal). Yet I've yet to meet a tradesman who declares all their income, in the last few months my carpenter asked my advice on a mortgage as the bank will only lend him £65k - well what do you expect when you 'officially' earn 18k a year