Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#1
A lot has been spoken about how the 50p rate damages the amount of tax collected by HMRC. So far the discussion has been about reducing it to a maximum 40p rate.
Remember - the real rate of income tax being paid is higher than this when you take account of National Insurance.
Basic rate taxpayers pay 32p
Higher rate taxpayers pay 42p
Additional rate taxpayers 52p (reducing to 47p) over £150,000
Did you know though that if you earn between £100,000 and c. £115,000 you pay an effective rate of 62p?
That if you are a basic rate taxpayer and over 65 you pay 30p on a band between £24,000 and about £29,000?
Such are the complexities of our tax system.
But what is the highest rate of tax you should be expected to pay? In other words if a higher rate taxpayer what is the highest rate of tax you should pay that would maximise the amount collected by HMRC?
After all the tax system should only be about collecting the tax needed to pay for public services and should not be about anything else.
People have made 40p (42p actual) as the 'totem' to get the highest rate down to but will that collect the most money for HMRC?
Well the Centre for Economic and Business Studies have looked into this. CEBS have the best track record of any for their economic predictions so are worth listening to.
This assumes we keep a 'multi-tier' tax system rather than a straight flat tax - there are good arguments that a flat tax will collect more.
The maximum rate they say is best for the economy is 36p - in the present system that would mean reducing the 40p rate to 34p... Do that and the higher paid will pay more tax, not less....
Guest 683- Registered: 11 Feb 2009
- Posts: 1,052
#2
Barry
I suspect you will never get a tax system that suits everybody after all economists/politicians/passnegers on the Clapham omnibus all want something different from, and for, each other.
For me the issue is about clarity as it is no longer possible to believe or trust in what we are told. This leads to mudslinging and entrenchment and grinds the issue down.
I feel, and suspect I am not alone in this, that we pay so much in taxes (direct and indirect) and are seeing diminishing returns. Any system that gives me the clarity to see where my money is going will get my vote as we can then have a sensible debate about it. Until such time we will continue with the gesture politics that we have at the moment with each side feeling badly done to by the other.
I am not holding my breath though for this government - nor any other - to introduce auch a system, however.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#3
Mark - we can reach a lot of agreement here then.
We need a simpler tax system, it is far too complex and because of that it creates too many loopholes.
Flat, low and simple taxes are hard to avoid, are fairer and more transparent.
Guest 683- Registered: 11 Feb 2009
- Posts: 1,052
#4
I can't tell you how much that hurt me!!
Guest 710- Registered: 28 Feb 2011
- Posts: 6,950
#5
Let us first extract the Barry-isms;-
-"After all the tax system should only be about collecting the tax needed to pay for public services and should not be about anything else."
-"Well the Centre for Economic and Business Studies have looked into this. CEBS have the best track record of any for their economic predictions so are worth listening to."
Are we to assume that each 'high-rate' tax-payer lands upon virgin (if not entirely barren) soil?
They then magic-up a scheme that nets them vast wealth and shortly all that there is for them to do is pose atop some vantage point, the lord of all they survey?
What of the flora and the fauna? Is the latter seen to gambol about enjoying the 'labours' of The One? The former fertilised and watered in accordance with the will of The One?
Has The One none to thank but themselves? Is the world of The One populated by Elvish folk and smiling gift-bestrewn children?
Is all sweetness and light?
When did Tax become a dirty word? When did the manufactured truth that, "Success is selfish." gain currency in the daily lives of us all?
"The American Dream." Is this just the destination on the front of a bus, that you are either on or you are left at the roadside?
I, for one, am a great believer in, "We are, each and all, in this together." Not together on the bus, but together in a whole society of interconnectedness. No man is an island, said the poet. And no man is his sole benefactor.
For, behind (not beneath) every successful business person is the market place and the work force and a whole host of others who if not directly concerned with any particular enterprise are a vital part in the lives of those who are and are a responsibility of us all.
The post-war years (WWII) saw a great transformation in the fortunes of the many. Where did it all go wrong?
To give a clue to that last question I post the link below.
To answer the question of this thread's title: Once all bills are paid, then what you have left is yours to do with as you please. 95% was necessary when there was little, but also much to be done. As it is today?
http://visualizingeconomics.com/2007/11/03/nytimes-historical-tax-rates-by-income-group/Ignorance is bliss, bliss is happiness, I am happy...to draw your attention to the possible connectivity in the foregoing.
Guest 698- Registered: 28 May 2010
- Posts: 8,664
#6
Tom I really enjoy your interventions. You must have known William Shakespeare in a previous life; and he must have used you as the model for many of his characters such as Thersites, the Porter in Macbeth, and the Fool in King Lear.
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson
Guest 710- Registered: 28 Feb 2011
- Posts: 6,950
#7
"Dost thou think I have no sense, thou strikest me thus?" [Troilus and Cressida?]
Ignorance is bliss, bliss is happiness, I am happy...to draw your attention to the possible connectivity in the foregoing.
Guest 698- Registered: 28 May 2010
- Posts: 8,664
#8
A piece of advice which many might learn from:
"Have more than thou showest.
Speak less than thou knowest.
Lend less than thou owest."
King Lear.
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson
Guest 745- Registered: 27 Mar 2012
- Posts: 3,370
#9
It was 60% under Thatcher and we had oil revenue coming in
Ross Miller
- Location: London Road, Dover
- Registered: 17 Sep 2008
- Posts: 3,709
#10
You know my views Barry
Flat rate of 20% on everything - earned income, unearned income (dividends, interest etc), VAT, corporation tax, CGT etc etc
Personal allowance at £14,000
No other allowances
"Dream as if you'll live forever. Live as if you'll die today." - James Dean
"Being deeply loved by someone gives you strength,
While loving someone deeply gives you courage" - Laozi
Guest 696- Registered: 31 Mar 2010
- Posts: 8,115
#11
"After all the tax system should only be about collecting the tax needed to pay for public services and should not be about anything else."
I must have a similar outlook to Tom, having immediately copied this phrase to paste it, and then reading further down to see Tom also found a Barryism.
Barry, you are unique!
What about benefits, military budget, foreign aid...to name some?
These are not public services.
In this time of crisis, the 50p rate should be put up to 75p on anything above £150,000 annual salary.
When the economy gets better, and the minimum wage is at £10 an hour - going by today's prices - then the 75p rate could be gradually reduced back to 50p.
Guest 696- Registered: 31 Mar 2010
- Posts: 8,115
#12
Not to forget that 1% of Britain's population owns 25% of Britain's financial wealth, and 9% of the population owns another 25% of our financial wealth.
No, we aren't all in this together! Go back to bed, Cameron!
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#13
Alexander- you worry all the time about the wrong things.
What is important, the bottom line, is simple. We need to increase the overall prosperity of the country and to do that we need businesses of all sizes to be successful and to go out there and compete and win.
That will create more jobs and better higher wages. More and more people will also be able to save and invest more - something particularly close to my heart, gaining for themselves an ownership stake in businesses and the country.
How to do that is not rocket science though achieving it is a lot more difficult given the 'headwinds' we face.
We need to make sure businesses can compete, to cut their costs, we need to attract investment and to encourage more risk takers to set up and grow businesses. We need to increase their markets too and the number of people who can take advantage of their goods and services.
Not all of that can be done instantly. Some things have to come first.
Cutting taxes being one of the more important. That means public spending must be cut properly to reduce the burden. Red tape must be cut too, all this equality and diversity rubbish for example, yes people must be treated fairly but a whole pile of red tape is not necessary to do this. We must also make it less risky to employ people as well and make it cheaper too.
It is not really rocket science really.
Guest 710- Registered: 28 Feb 2011
- Posts: 6,950
#14
"We must also make it less risky to employ people as well and make it cheaper too."
Too right. There must be a cheaper way...
"Executive pay has spiralled out of control because nearly half of remuneration committee members are either serving or former company bosses, according to a report by the High Pay Centre.
Nine current FTSE 100 chief executives, including Smith Group's Philip Bowman, Kingfisher's Ian Cheshire, Diageo's Paul Welsh and Centrica's Sam Laidlaw sit on the remuneration committees of fellow blue chip companies.
The committees, which set chief executives' pay, succumb to "group-think" because they are dominated by a "closed shop" of highly paid current and former directors who benefit personally from rising pay levels, the campaign group said.
The average pay of a FTSE 100 boss now stands at £4.2m, according the employment research group IDS. On Friday, it emerged that the former Reckitt Benckiser chief executive Bart Becht, who stepped down in September, had been paid £12.1m last year in cash and shares. The company behind Cillit Bang and Vanish paid him cash and shares worth £203m in six years, and he could still be in line for staggered payouts worth £45m in future years..."
The full Guardian article...
http://www.guardian.co.uk/business/2012/apr/02/executive-pay-ftse-firms
And the home page of the 'High Pay Centre'...
http://www.highpaycentre.org/Ignorance is bliss, bliss is happiness, I am happy...to draw your attention to the possible connectivity in the foregoing.
Guest 698- Registered: 28 May 2010
- Posts: 8,664
#15
If an executive gets paid an extra million he will pay £520,000 tax and NICs on it. If that money stays in the company, £300,000 tax will be paid on it. So for every million of 'excessive' executive pay, the exchequer benefits by £220,000. What's wrong with that?
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson
Guest 710- Registered: 28 Feb 2011
- Posts: 6,950
#16
How might the company benefit from this (near) £220,000? The workforce? The local economy?
You right-wingers think taxation is the answer to everything, nary a thought to investing;in the company, the workforce, the local economy, growing their customer base....
Tax me! Tax me! There has to be more to life than that?
Ignorance is bliss, bliss is happiness, I am happy...to draw your attention to the possible connectivity in the foregoing.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#17
Actually no Tom - the right consider tax to be a necessary evil that should be kept low. Taxes now are far too high and are damaging to the economy. It is the left who are fixated on getting people to pay more tax to fund their irresponsible self-indulgent extravagance with our money.
Ross Miller- Location: London Road, Dover
- Registered: 17 Sep 2008
- Posts: 3,709
#18
Actually Barry we are not - the shambles that is the centre right New Labour Party may well want to increase the tax burden to fund an over stuffed benefits system but most on the real left do not.
We want a system where taxation is fair and seen to be, where people feel good about paying tax, where tax is set at a level people do not try to avoid because it is not cost effective to do so, where there is real dignity in working, where those in work are genuinely supported by their employers and the state, where there are educational and training opportunities for young and old funded both by the state and by business, a system that creates real jobs for real people, that delivers free health care at the point of need irrespective of delivery mechanism, a state education system that is not hamstrung by politically motivated curricula or league tables but driven by the desire to educate and develop rounded useful citizens.
"Dream as if you'll live forever. Live as if you'll die today." - James Dean
"Being deeply loved by someone gives you strength,
While loving someone deeply gives you courage" - Laozi
Keith Sansum1
- Location: london
- Registered: 25 Aug 2010
- Posts: 23,948
#19
well well theres some interesting thoughts
and some posters even stating they come from the left
well well wonders will never cease
ALL POSTS ARE MY OWN PERSONAL VIEWS