"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.
I wasn't suggesting undeclared income was any better, more that it doesn't seem to have the same distain with the general public and in my experience is much more widespread.
Does depend what you mean by tax avoidance, paying into a pension or an ISA is effectively tax avoidance at one end or the other. Buying other certain investments is tax avoidance as they are tax exempt.
"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.
I wasn't suggesting undeclared income was any better, more that it doesn't seem to have the same distain with the general public and in my experience is much more widespread.
Does depend what you mean by tax avoidance, paying into a pension or an ISA is effectively tax avoidance at one end or the other. Buying other certain investments is tax avoidance as they are tax exempt.
Saying it is all tax avoidance to an end is normally used to muddy the water by those who don't wish to be seen. There is a moral difference between 'am I paying my fair share?' to 'how little can I pay?' even if there isn't a legal one. I suppose it comes down to if the law is being used as intended or if the law is being used to save money.
Take tax relief on pensions for example, has it on mass been used as a mechanism to help solve the 'pension bubble' or has it had more effect as a political bribe and used as a way of paying less tax by wealthy people? I thought a large part of the problem was the number of people without a private pension and the amount in the total pot. Has this policy encouraged people start a pension as they were worried about the future or has it been shopped around as a way of paying less tax? Has it been used by the people it was intended to? I know help to buy ISA have incredibly strict conditions to make sure they are used as intended.
I don’t see pensions or ISA’s as an immoral way of avoiding tax, in some respects pensions with the newish restrictions on higher earners is just another way of taxing higher earners. Hardly a political bribe for higher earners, more the opposite.
Why would a higher earner pay into a pension and pay 45% tax and then likely pay at least 40% on the 55% when they draw it. Effectively paying 67% tax, would make no sense to do so, that’s not a morality issue but common sense.
Of course before those restrictions you could argue it was a political bribe, but not anymore.
To encourage people to take a pension I guess they need to see an incentive to do so, the tax efficiency for earners below a level is a way to encourage that and forcing employers to contribute I see as a good thing.
Can’t say I’m that up to speed on help to buy ISA’s but my daughter will take out a LISA in July she tells me, having looked into that it makes sense.
I don’t see pensions or ISA’s as an immoral way of avoiding tax, in some respects pensions with the newish restrictions on higher earners is just another way of taxing higher earners. Hardly a political bribe for higher earners, more the opposite.
Why would a higher earner pay into a pension and pay 45% tax and then likely pay at least 40% on the 55% when they draw it. Effectively paying 67% tax, would make no sense to do so, that’s not a morality issue but common sense.
Of course before those restrictions you could argue it was a political bribe, but not anymore.
To encourage people to take a pension I guess they need to see an incentive to do so, the tax efficiency for earners below a level is a way to encourage that and forcing employers to contribute I see as a good thing.
Can’t say I’m that up to speed on help to buy ISA’s but my daughter will take out a LISA in July she tells me, having looked into that it makes sense.
You appear to be stuck in the weeds and the long grass! Missing the austerity rhetoric which is actually an attack on "big government". And that in turn frames a debate they have in the US where people are responsible for their own healthcare provision via their choice of employment and management of career.
"What's wrong with tucking away x, y and z of tax deductible savings?" Bigger picture - why not focus on the 1% and the distortions and changes over the last 50 years? Not about envy but the drop in corporation tax rates (that doesn't feature in your narrative) together with tax base erosion aka avoidance, transfer pricing and other mechanisms to avoid paying billions to governments in the UK and other western democracies.
This isn't a call for universal maximum provision for all as that doesn't add up, financially and politically. But we must look at universal healthcare as well as credit / benefit options. And the provision of services such as transport, housing and education.
The nonsense spouted about what the country can and cannot afford becomes even more rediculous as GDP growth flatlines towards zero. The irony of accentuating the so called "poverty trap" at £120k is beyond parody! Especially when one considers the millions stuck at £20-30k with rising inflation and stagnant wages.
Bottom line is the Tories will do nothing except attempt to scare enough voters into not voting Labour. That's where we are today.
There is a far bigger debate about where the UK needs to go and it really isn't about ISAs etc.
Haven't missed the austerity, just joining the debate about various points, nor have I said anything about Poverty trap at 120k, total nonsense, anyone on 120k is hardly in poverty.
Why do I need to focus on the 1%? Why is there this fascination on the top 1% earners (I assume thats the 1% you are referring to). Nor does my 'narrative' as you put it focus on Corp tax as that wasn't what we were discussing as it was around individual taxation and progressive tax. It didn't focus on Brexit either or 101 other topics.
I do agree though the Tories will do nothing, or likely next to nothing, I don't even think they need to scare voters into not voting Labour right now, Labour are doing a reasonable job of that themselves.
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.
I don't have a mob; I don't vote. I'm merely pointing out that taxing the rich more will achieve nothing because the amount of money raised will be inconsequential. The only way the problems with the poor could possible be solved is if our average punter paid (much) more 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.
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.
I don't have a mob; I don't vote. I'm merely pointing out that taxing the rich more will achieve nothing because the amount of money raised will be inconsequential. The only way the problems with the poor could possible be solved is if our average punter paid (much) more tax.
Tend to agree. And if stuff costs more, such as healthcare, then we all need to cough up for it. The real scandal isn't the position of the tax bands, but such things as corporate tax avoidance - the Googles and Amazons of this world - and inequality. couple of newspaper reports showing the growing gap between CEO pay and worker pay. I've said it before, if you want to increase tax receipts, better to increase the average pay than tax more of the same dwindling worker's package. Those at the top are greedy, plain and simple.
We shouldn't tax high earners more because they won't pay it so there is no point.
We shouldn't chase businesses (Amazon, Starbucks, Vodafone etc) because the won't pay it as they have legal ways to not pay it.
We shouldn't increase the corporation rate to the levels of similar countries, in fact lets lower it. As lowering it will increase revenue!
No, don’t think anyone has said any of that, not that I can see.
@cafcfan has said taxing more the wealthier won’t raise enough and it would require everyone to pay more. I’d broadly agree with that hence my suggestion of 1/2p on all bands (I’d also raise further the personal allowance).
No one has said we shouldn’t chase the large tax avoiding Corps that I’ve seen.
Haven’t seen anyone talk about Corp Tax Rates as to whether remain as is, lower or increase.
We shouldn't tax high earners more because they won't pay it so there is no point.
We shouldn't chase businesses (Amazon, Starbucks, Vodafone etc) because the won't pay it as they have legal ways to not pay it.
We shouldn't increase the corporation rate to the levels of similar countries, in fact lets lower it. As lowering it will increase revenue!
No, don’t think anyone has said any of that, not that I can see.
@cafcfan has said taxing more the wealthier won’t raise enough and it would require everyone to pay more. I’d broadly agree with that hence my suggestion of 1/2p on all bands (I’d also raise further the personal allowance).
No one has said we shouldn’t chase the large tax avoiding Corps that I’ve seen.
Haven’t seen anyone talk about Corp Tax Rates as to whether remain as is, lower or increase.
OK glad we have got that straight.
Although isn't the govt reducing corporation tax from 20% to 17%?
And it is of course true that poorer people pay a higher % of their disposable income in taxes and this is particularly the case with regressive taxes like VAT and 'hidden' (for want of a better word) taxes like travel costs, dental costs and school stuff.
Yes Corp tax is being reduced, but you didn’t ask what the government were doing, but what people (on here) were saying.
As I’ve said earlier, if you take the top 10% v the bottom 10% you are correct. However the top 10% starts at something like £40k/45k. It’s actually those at the lower end of the top 10% roughly 40-100k that pay less than the bottom 10%, once you get over £100k that changes as far as I can see.
Companies will not just sit there and take a corporation tax hit. It is not a free lunch for the rest of us. They will merely increase their prices to compensate. That means that, again, Joe Public, will be the ones to pay. This time through (yet) higher prices on the High Street - whether the virtual High Street or otherwise.
Companies will not just sit there and take a corporation tax hit. It is not a free lunch for the rest of us. They will merely increase their prices to compensate. That means that, again, Joe Public, will be the ones to pay. This time through (yet) higher prices on the High Street - whether the virtual High Street or otherwise.
We shouldn't tax high earners more because they won't pay it so there is no point.
We shouldn't chase businesses (Amazon, Starbucks, Vodafone etc) because the won't pay it as they have legal ways to not pay it.
We shouldn't increase the corporation rate to the levels of similar countries, in fact lets lower it. As lowering it will increase revenue!
No, don’t think anyone has said any of that, not that I can see.
@cafcfan has said taxing more the wealthier won’t raise enough and it would require everyone to pay more. I’d broadly agree with that hence my suggestion of 1/2p on all bands (I’d also raise further the personal allowance).
No one has said we shouldn’t chase the large tax avoiding Corps that I’ve seen.
Haven’t seen anyone talk about Corp Tax Rates as to whether remain as is, lower or increase.
OK glad I've got that straight.
And it is of course true that poorer people pay a higher % of their disposable income in taxes and this is particularly the case with regressive taxes like VAT and 'hidden' (for want of a better word) taxes like travel costs, dental costs and school stuff.
Is there anywhere in the world where this isn't the case?
We shouldn't tax high earners more because they won't pay it so there is no point.
We shouldn't chase businesses (Amazon, Starbucks, Vodafone etc) because the won't pay it as they have legal ways to not pay it.
We shouldn't increase the corporation rate to the levels of similar countries, in fact lets lower it. As lowering it will increase revenue!
No, don’t think anyone has said any of that, not that I can see.
@cafcfan has said taxing more the wealthier won’t raise enough and it would require everyone to pay more. I’d broadly agree with that hence my suggestion of 1/2p on all bands (I’d also raise further the personal allowance).
No one has said we shouldn’t chase the large tax avoiding Corps that I’ve seen.
Haven’t seen anyone talk about Corp Tax Rates as to whether remain as is, lower or increase.
OK glad I've got that straight.
And it is of course true that poorer people pay a higher % of their disposable income in taxes and this is particularly the case with regressive taxes like VAT and 'hidden' (for want of a better word) taxes like travel costs, dental costs and school stuff.
Is there anywhere in the world where this isn't the case?
It is not so much as if this is true but the level at which it occurs. One of the main functions of taxation is wealth redistribution, if wealth concentrates like it has in the last ten years, then it is failing in this.
Companies will not just sit there and take a corporation tax hit. It is not a free lunch for the rest of us. They will merely increase their prices to compensate. That means that, again, Joe Public, will be the ones to pay. This time through (yet) higher prices on the High Street - whether the virtual High Street or otherwise.
This would only be true if the product they were offering was inelastic in nature.
I hear so much about reclaiming our sovereignty but at the same time how we can't choose the laws that companies and individuals should adhere to. We are one of the largest economies in the world and the idea that companies in other countries don't want to make money out of us is laughable.
The US introduced legislation that we have to provide information, including statements, of private bank accounts in an attempt to combat tax evasion. HMRC hands them over if the individual does not comply. So we are prepared to carry out US law but are not prepared to do anything ourselves is as depressing as it is unsurprising. But what do you when the some of the main beneficiaries of this behaviour are the same people voted in to run the country?
It’s fucking hilarious. Be interested to hear the thoughts of charlton life’s resident gammon @Greenie
Ive no idea what you are on about, gammon? I do however think you are infatuated by me and fancy me, and probably want to bum me off. I can see Im going to have to let you down gently, Im not gay, but thanks for the compliment, it means a lot.
It’s fucking hilarious. Be interested to hear the thoughts of charlton life’s resident gammon @Greenie
Ive no idea what you are on about, gammon? I do however think you are infatuated by me and fancy me, and probably want to bum me off. I can see Im going to have to let you down gently, Im not gay, but thanks for the compliment, it means a lot.
It’s fucking hilarious. Be interested to hear the thoughts of charlton life’s resident gammon @Greenie
Ive no idea what you are on about, gammon? I do however think you are infatuated by me and fancy me, and probably want to bum me off. I can see Im going to have to let you down gently, Im not gay, but thanks for the compliment, it means a lot.
“A term used to describe a particular type of Brexit-voting, middle-aged white male, whose meat-faced complexion suggests they are perilously close to a stroke.”
It’s fucking hilarious. Be interested to hear the thoughts of charlton life’s resident gammon @Greenie
Ive no idea what you are on about, gammon? I do however think you are infatuated by me and fancy me, and probably want to bum me off. I can see Im going to have to let you down gently, Im not gay, but thanks for the compliment, it means a lot.
“A term used to describe a particular type of Brexit-voting, middle-aged white male, whose meat-faced complexion suggests they are perilously close to a stroke.”
Who knew ? He's really trying hard, bless him, I'm not even white!
It’s fucking hilarious. Be interested to hear the thoughts of charlton life’s resident gammon @Greenie
Ive no idea what you are on about, gammon? I do however think you are infatuated by me and fancy me, and probably want to bum me off. I can see Im going to have to let you down gently, Im not gay, but thanks for the compliment, it means a lot.
“A term used to describe a particular type of Brexit-voting, middle-aged white male, whose meat-faced complexion suggests they are perilously close to a stroke.”
Who knew ? He's really trying hard, bless him, I'm not even white!
So someone matching this definition “A term used to describe a particular type of Brexit-voting, middle-aged white male, whose meat-faced complexion suggests they are perilously close to a stroke.” would never vote Labour?
Wow - might be time you ventured into the northern powerhouse.....
We shouldn't tax high earners more because they won't pay it so there is no point.
We shouldn't chase businesses (Amazon, Starbucks, Vodafone etc) because the won't pay it as they have legal ways to not pay it.
We shouldn't increase the corporation rate to the levels of similar countries, in fact lets lower it. As lowering it will increase revenue!
No, don’t think anyone has said any of that, not that I can see.
@cafcfan has said taxing more the wealthier won’t raise enough and it would require everyone to pay more. I’d broadly agree with that hence my suggestion of 1/2p on all bands (I’d also raise further the personal allowance).
No one has said we shouldn’t chase the large tax avoiding Corps that I’ve seen.
Haven’t seen anyone talk about Corp Tax Rates as to whether remain as is, lower or increase.
OK glad I've got that straight.
And it is of course true that poorer people pay a higher % of their disposable income in taxes and this is particularly the case with regressive taxes like VAT and 'hidden' (for want of a better word) taxes like travel costs, dental costs and school stuff.
Is there anywhere in the world where this isn't the case?
It is not so much as if this is true but the level at which it occurs. One of the main functions of taxation is wealth redistribution, if wealth concentrates like it has in the last ten years, then it is failing in this.
Companies will not just sit there and take a corporation tax hit. It is not a free lunch for the rest of us. They will merely increase their prices to compensate. That means that, again, Joe Public, will be the ones to pay. This time through (yet) higher prices on the High Street - whether the virtual High Street or otherwise.
This would only be true if the product they were offering was inelastic in nature.
I don't think our general taxation system does too bad a job at redistribution. Not to say it couldn't do more/go further.
I do think if companies get a heavier tax burden they will look at ways to counter that, whether thats passing some cost onto the consumer (ala increased personal injury costs passed straight onto the consumers motor insurance premiums) or by way of cost cutting/job losses/out sourcing. We need to be competitive or slightly better than a lot of Europe with Brexit around the corner but no more.
We shouldn't tax high earners more because they won't pay it so there is no point.
We shouldn't chase businesses (Amazon, Starbucks, Vodafone etc) because the won't pay it as they have legal ways to not pay it.
We shouldn't increase the corporation rate to the levels of similar countries, in fact lets lower it. As lowering it will increase revenue!
No, don’t think anyone has said any of that, not that I can see.
@cafcfan has said taxing more the wealthier won’t raise enough and it would require everyone to pay more. I’d broadly agree with that hence my suggestion of 1/2p on all bands (I’d also raise further the personal allowance).
No one has said we shouldn’t chase the large tax avoiding Corps that I’ve seen.
Haven’t seen anyone talk about Corp Tax Rates as to whether remain as is, lower or increase.
OK glad I've got that straight.
And it is of course true that poorer people pay a higher % of their disposable income in taxes and this is particularly the case with regressive taxes like VAT and 'hidden' (for want of a better word) taxes like travel costs, dental costs and school stuff.
Is there anywhere in the world where this isn't the case?
It is not so much as if this is true but the level at which it occurs. One of the main functions of taxation is wealth redistribution, if wealth concentrates like it has in the last ten years, then it is failing in this.
Companies will not just sit there and take a corporation tax hit. It is not a free lunch for the rest of us. They will merely increase their prices to compensate. That means that, again, Joe Public, will be the ones to pay. This time through (yet) higher prices on the High Street - whether the virtual High Street or otherwise.
This would only be true if the product they were offering was inelastic in nature.
We shouldn't tax high earners more because they won't pay it so there is no point.
We shouldn't chase businesses (Amazon, Starbucks, Vodafone etc) because the won't pay it as they have legal ways to not pay it.
We shouldn't increase the corporation rate to the levels of similar countries, in fact lets lower it. As lowering it will increase revenue!
No, don’t think anyone has said any of that, not that I can see.
@cafcfan has said taxing more the wealthier won’t raise enough and it would require everyone to pay more. I’d broadly agree with that hence my suggestion of 1/2p on all bands (I’d also raise further the personal allowance).
No one has said we shouldn’t chase the large tax avoiding Corps that I’ve seen.
Haven’t seen anyone talk about Corp Tax Rates as to whether remain as is, lower or increase.
OK glad I've got that straight.
And it is of course true that poorer people pay a higher % of their disposable income in taxes and this is particularly the case with regressive taxes like VAT and 'hidden' (for want of a better word) taxes like travel costs, dental costs and school stuff.
Is there anywhere in the world where this isn't the case?
It is not so much as if this is true but the level at which it occurs. One of the main functions of taxation is wealth redistribution, if wealth concentrates like it has in the last ten years, then it is failing in this.
Companies will not just sit there and take a corporation tax hit. It is not a free lunch for the rest of us. They will merely increase their prices to compensate. That means that, again, Joe Public, will be the ones to pay. This time through (yet) higher prices on the High Street - whether the virtual High Street or otherwise.
This would only be true if the product they were offering was inelastic in nature.
I don't think our general taxation system does too bad a job at redistribution. Not to say it couldn't do more/go further.
I do think if companies get a heavier tax burden they will look at ways to counter that, whether thats passing some cost onto the consumer (ala increased personal injury costs passed straight onto the consumers motor insurance premiums) or by way of cost cutting/job losses/out sourcing. We need to be competitive or slightly better than a lot of Europe with Brexit around the corner but no more.
You've trotted this one out before but CT impacts on dividends and most senior execs are more reliant on fat pay/bonuses than dividends despite shareholders trying to curb the former without any help from the Tories. Ironically it will be pension funds mostly affected but that seems a small price for decent services. The biggest challenge is getting multinationals to actually pay tax.
Add that to the Hunt's job-lot flat purchase and Rees-Mogg involvement of an emerging markets investment firm, this government really does have a whiff of the sleazy 90's about it.
We shouldn't tax high earners more because they won't pay it so there is no point.
We shouldn't chase businesses (Amazon, Starbucks, Vodafone etc) because the won't pay it as they have legal ways to not pay it.
We shouldn't increase the corporation rate to the levels of similar countries, in fact lets lower it. As lowering it will increase revenue!
No, don’t think anyone has said any of that, not that I can see.
@cafcfan has said taxing more the wealthier won’t raise enough and it would require everyone to pay more. I’d broadly agree with that hence my suggestion of 1/2p on all bands (I’d also raise further the personal allowance).
No one has said we shouldn’t chase the large tax avoiding Corps that I’ve seen.
Haven’t seen anyone talk about Corp Tax Rates as to whether remain as is, lower or increase.
OK glad I've got that straight.
And it is of course true that poorer people pay a higher % of their disposable income in taxes and this is particularly the case with regressive taxes like VAT and 'hidden' (for want of a better word) taxes like travel costs, dental costs and school stuff.
Is there anywhere in the world where this isn't the case?
It is not so much as if this is true but the level at which it occurs. One of the main functions of taxation is wealth redistribution, if wealth concentrates like it has in the last ten years, then it is failing in this.
Companies will not just sit there and take a corporation tax hit. It is not a free lunch for the rest of us. They will merely increase their prices to compensate. That means that, again, Joe Public, will be the ones to pay. This time through (yet) higher prices on the High Street - whether the virtual High Street or otherwise.
This would only be true if the product they were offering was inelastic in nature.
I don't think our general taxation system does too bad a job at redistribution. Not to say it couldn't do more/go further.
I do think if companies get a heavier tax burden they will look at ways to counter that, whether thats passing some cost onto the consumer (ala increased personal injury costs passed straight onto the consumers motor insurance premiums) or by way of cost cutting/job losses/out sourcing. We need to be competitive or slightly better than a lot of Europe with Brexit around the corner but no more.
You've trotted this one out before but CT impacts on dividends and most senior execs are more reliant on fat pay/bonuses than dividends despite shareholders trying to curb the former without any help from the Tories. Ironically it will be pension funds mostly affected but that seems a small price for decent services. The biggest challenge is getting multinationals to actually pay tax.
I haven't mentioned what senior execs may or may not be reliant on or how they are remunerated, nothing to do with how a company would react to a CT hike.
As for pension funds, then yes if the stock market tanks and dividends reduce then pension funds invested in those instruments would suffer a decrease in value and growth, but then most with a large enough pot actively manage (or have them actively managed) and therefore as is usual will move out or dilute pre an election anyway.
If you think post any CT hike companies wouldn't take some form of action to try to restore shareholder value then I believe you are mistaken. I'm not suggesting we reduce them or agreeing with the government doing so, but be careful what you wish for, as we all know it's unlikely to be the most senior execs you like so much that are effected.
Comments
Does depend what you mean by tax avoidance, paying into a pension or an ISA is effectively tax avoidance at one end or the other. Buying other certain investments is tax avoidance as they are tax exempt.
Take tax relief on pensions for example, has it on mass been used as a mechanism to help solve the 'pension bubble' or has it had more effect as a political bribe and used as a way of paying less tax by wealthy people? I thought a large part of the problem was the number of people without a private pension and the amount in the total pot. Has this policy encouraged people start a pension as they were worried about the future or has it been shopped around as a way of paying less tax? Has it been used by the people it was intended to? I know help to buy ISA have incredibly strict conditions to make sure they are used as intended.
Why would a higher earner pay into a pension and pay 45% tax and then likely pay at least 40% on the 55% when they draw it. Effectively paying 67% tax, would make no sense to do so, that’s not a morality issue but common sense.
Of course before those restrictions you could argue it was a political bribe, but not anymore.
To encourage people to take a pension I guess they need to see an incentive to do so, the tax efficiency for earners below a level is a way to encourage that and forcing employers to contribute I see as a good thing.
Can’t say I’m that up to speed on help to buy ISA’s but my daughter will take out a LISA in July she tells me, having looked into that it makes sense.
"What's wrong with tucking away x, y and z of tax deductible savings?" Bigger picture - why not focus on the 1% and the distortions and changes over the last 50 years? Not about envy but the drop in corporation tax rates (that doesn't feature in your narrative) together with tax base erosion aka avoidance, transfer pricing and other mechanisms to avoid paying billions to governments in the UK and other western democracies.
This isn't a call for universal maximum provision for all as that doesn't add up, financially and politically. But we must look at universal healthcare as well as credit / benefit options. And the provision of services such as transport, housing and education.
The nonsense spouted about what the country can and cannot afford becomes even more rediculous as GDP growth flatlines towards zero. The irony of accentuating the so called "poverty trap" at £120k is beyond parody! Especially when one considers the millions stuck at £20-30k with rising inflation and stagnant wages.
Bottom line is the Tories will do nothing except attempt to scare enough voters into not voting Labour. That's where we are today.
There is a far bigger debate about where the UK needs to go and it really isn't about ISAs etc.
Why do I need to focus on the 1%? Why is there this fascination on the top 1% earners (I assume thats the 1% you are referring to). Nor does my 'narrative' as you put it focus on Corp tax as that wasn't what we were discussing as it was around individual taxation and progressive tax. It didn't focus on Brexit either or 101 other topics.
I do agree though the Tories will do nothing, or likely next to nothing, I don't even think they need to scare voters into not voting Labour right now, Labour are doing a reasonable job of that themselves.
We shouldn't tax high earners more because they won't pay it so there is no point.
We shouldn't chase businesses (Amazon, Starbucks, Vodafone etc) because the won't pay it as they have legal ways to not pay it.
We shouldn't increase the corporation rate to the levels of similar countries, in fact lets lower it. As lowering it will increase revenue!
https://www.telegraph.co.uk/comment/columnists/robert-colvile/11158607/Yes-CEOs-are-ludicrously-overpaid.-And-yes-its-getting-worse.html
https://www.theguardian.com/business/2017/mar/22/uk-ceos-national-living-wage-equality-trust-pay-gap
@cafcfan has said taxing more the wealthier won’t raise enough and it would require everyone to pay more. I’d broadly agree with that hence my suggestion of 1/2p on all bands (I’d also raise further the personal allowance).
No one has said we shouldn’t chase the large tax avoiding Corps that I’ve seen.
Haven’t seen anyone talk about Corp Tax Rates as to whether remain as is, lower or increase.
Although isn't the govt reducing corporation tax from 20% to 17%?
And it is of course true that poorer people pay a higher % of their disposable income in taxes and this is particularly the case with regressive taxes like VAT and 'hidden' (for want of a better word) taxes like travel costs, dental costs and school stuff.
As I’ve said earlier, if you take the top 10% v the bottom 10% you are correct. However the top 10% starts at something like £40k/45k. It’s actually those at the lower end of the top 10% roughly 40-100k that pay less than the bottom 10%, once you get over £100k that changes as far as I can see.
The US introduced legislation that we have to provide information, including statements, of private bank accounts in an attempt to combat tax evasion. HMRC hands them over if the individual does not comply. So we are prepared to carry out US law but are not prepared to do anything ourselves is as depressing as it is unsurprising. But what do you when the some of the main beneficiaries of this behaviour are the same people voted in to run the country?
I can see Im going to have to let you down gently, Im not gay, but thanks for the compliment, it means a lot.
https://www.urbandictionary.com/define.php?term=Gammon
“A term used to describe a particular type of Brexit-voting, middle-aged white male, whose meat-faced complexion suggests they are perilously close to a stroke.”
He's really trying hard, bless him, I'm not even white!
“A term used to describe a particular type of Brexit-voting, middle-aged white male, whose meat-faced complexion suggests they are perilously close to a stroke.”
would never vote Labour?
Wow - might be time you ventured into the northern powerhouse.....
#massively out of touch with northern Labour
I do think if companies get a heavier tax burden they will look at ways to counter that, whether thats passing some cost onto the consumer (ala increased personal injury costs passed straight onto the consumers motor insurance premiums) or by way of cost cutting/job losses/out sourcing. We need to be competitive or slightly better than a lot of Europe with Brexit around the corner but no more.
That's good.
bbc.co.uk/news/uk-england-lincolnshire-44109060
Add that to the Hunt's job-lot flat purchase and Rees-Mogg involvement of an emerging markets investment firm, this government really does have a whiff of the sleazy 90's about it.
As for pension funds, then yes if the stock market tanks and dividends reduce then pension funds invested in those instruments would suffer a decrease in value and growth, but then most with a large enough pot actively manage (or have them actively managed) and therefore as is usual will move out or dilute pre an election anyway.
If you think post any CT hike companies wouldn't take some form of action to try to restore shareholder value then I believe you are mistaken. I'm not suggesting we reduce them or agreeing with the government doing so, but be careful what you wish for, as we all know it's unlikely to be the most senior execs you like so much that are effected.