Why is income tax not even?
Discussion
It seems that a lot of people seem to perceive that those that earn more should pay more tax.
Seems fair enough to me, but why not at the same rate?
If there was say 35% tax to everyone over £15k.
Person A on £15k - £0 tax
Person B on £30k - £5250 tax
Person C on £150k - £47250 tax
So as you see the more you earn the more tax you pay. Why is it assumed that those who earn more money should pay a higher percentage of their earnings?
Seems fair enough to me, but why not at the same rate?
If there was say 35% tax to everyone over £15k.
Person A on £15k - £0 tax
Person B on £30k - £5250 tax
Person C on £150k - £47250 tax
So as you see the more you earn the more tax you pay. Why is it assumed that those who earn more money should pay a higher percentage of their earnings?
elster said:
It seems that a lot of people seem to perceive that those that earn more should pay more tax.
Seems fair enough to me, but why not at the same rate?
If there was say 35% tax to everyone over £15k.
Person A on £15k - £0 tax
Person B on £30k - £5250 tax
Person C on £150k - £47250 tax
So as you see the more you earn the more tax you pay. Why is it assumed that those who earn more money should pay a higher percentage of their earnings?
How do you get a person on 15k paying no tax? Sorry totally misread your post..I thought you were describing the system we have now...Seems fair enough to me, but why not at the same rate?
If there was say 35% tax to everyone over £15k.
Person A on £15k - £0 tax
Person B on £30k - £5250 tax
Person C on £150k - £47250 tax
So as you see the more you earn the more tax you pay. Why is it assumed that those who earn more money should pay a higher percentage of their earnings?
Edited by esselte on Friday 24th April 15:59
elster said:
It seems that a lot of people seem to perceive that those that earn more should pay more tax.
Seems fair enough to me, but why not at the same rate?
If there was say 35% tax to everyone over £15k.
Person A on £15k - £0 tax
Person B on £30k - £5250 tax
Person C on £150k - £47250 tax
So as you see the more you earn the more tax you pay. Why is it assumed that those who earn more money should pay a higher percentage of their earnings?
Because Gordon doesn't want intelligent people in this country they would see him for what he is.Seems fair enough to me, but why not at the same rate?
If there was say 35% tax to everyone over £15k.
Person A on £15k - £0 tax
Person B on £30k - £5250 tax
Person C on £150k - £47250 tax
So as you see the more you earn the more tax you pay. Why is it assumed that those who earn more money should pay a higher percentage of their earnings?
Our tax burden is way too high - lowering tax rates would encourage business and spending at a time it is sorely needed.
elster said:
Are there any countries that have such a system?
It does seem the evil rich people are shown in a bad light by the media (who also earn the same rates)
YepIt does seem the evil rich people are shown in a bad light by the media (who also earn the same rates)
One of the former Warsaw Pact or Soviet Bloc countries has a flat 10% income tax. No adustments, no banding, no rebates - just 10% of everything you earn.
Ukraine I think.
Apparently it's a raving success - tax revenues have soared, everyone knows what's what, and the Tax Service consists of one bloke.
It's so simple that you can't dodge it through complex loopholes, and because everybody is paying the same the amount, the high earners don't feel the need to worm their way out of it.
That's a fair tax system
What we have in the UK is an unfair tax system allied to an unfair benefits system - those who earn the most pay the most but actually reap the least relative reward from the system should they need to dip into their social security.
Edited by Dunk76 on Friday 24th April 16:10
Dunk76 said:
elster said:
Are there any countries that have such a system?
It does seem the evil rich people are shown in a bad light by the media (who also earn the same rates)
YepIt does seem the evil rich people are shown in a bad light by the media (who also earn the same rates)
One of the former Warsaw Pact or Soviet Bloc countries has a flat 10% income tax. No adustments, no banding, no rebates - just 10% of everything you earn.
Ukraine I think.
Apparently it's a raving success - tax revenues have soared, everyone knows what's what, and the Tax Service consists of one bloke.
I think it was removing all allowances and all indirect taxation other than VAT and a flat rate of 12.5% on every penny earned would still make the figures work
Plotloss said:
There was a thinktank that said it could be done here.
I think it was removing all allowances and all indirect taxation other than VAT and a flat rate of 12.5% on every penny earned would still make the figures work
Only we wouldn't be able to employ 100s of 1000s of idiots in HMRC...I think it was removing all allowances and all indirect taxation other than VAT and a flat rate of 12.5% on every penny earned would still make the figures work
Plotloss said:
Dunk76 said:
elster said:
Are there any countries that have such a system?
It does seem the evil rich people are shown in a bad light by the media (who also earn the same rates)
YepIt does seem the evil rich people are shown in a bad light by the media (who also earn the same rates)
One of the former Warsaw Pact or Soviet Bloc countries has a flat 10% income tax. No adustments, no banding, no rebates - just 10% of everything you earn.
Ukraine I think.
Apparently it's a raving success - tax revenues have soared, everyone knows what's what, and the Tax Service consists of one bloke.
I think it was removing all allowances and all indirect taxation other than VAT and a flat rate of 12.5% on every penny earned would still make the figures work
Unfortunately we have neither.
What both parties fail to appreciate is that all money is tax.
Plotloss said:
There was a thinktank that said it could be done here.
I think it was removing all allowances and all indirect taxation other than VAT and a flat rate of 12.5% on every penny earned would still make the figures work
It's an absolute no-brainer - those on benefits are only there because they are unable to earn enough to make their life better.I think it was removing all allowances and all indirect taxation other than VAT and a flat rate of 12.5% on every penny earned would still make the figures work
We have this desire to make tax "fairer" on certain people, usually based on lifestyle choices like children/marriage, when in fact it is amazingly discriminatory.
We spend £31billion a year on HMRC. £500 a year for every man, woman and child in this country.
Plotloss said:
Dunk76 said:
elster said:
Are there any countries that have such a system?
It does seem the evil rich people are shown in a bad light by the media (who also earn the same rates)
YepIt does seem the evil rich people are shown in a bad light by the media (who also earn the same rates)
One of the former Warsaw Pact or Soviet Bloc countries has a flat 10% income tax. No adustments, no banding, no rebates - just 10% of everything you earn.
Ukraine I think.
Apparently it's a raving success - tax revenues have soared, everyone knows what's what, and the Tax Service consists of one bloke.
I think it was removing all allowances and all indirect taxation other than VAT and a flat rate of 12.5% on every penny earned would still make the figures work
Deva Link said:
elster said:
Are there any countries that have such a system?
http://en.wikipedia.org/wiki/Flat_tax#Countries_that_have_flat_tax_systemsI'm sure that Australia was going to intoduce it too, but the idea was abandoned.
I wonder who said this:
"A flat tax. An idea that they say is sweeping the world, well sweeping Estonia, well a wing of the neo-conservatives in Estonia. .. The millionaire to pay exactly the same tax rate as the young nurse, the home help, the worker on the minimum wage. "
Gordon Brown, 2005
http://www.guardian.co.uk/politics/2005/sep/26/spe...
"A flat tax. An idea that they say is sweeping the world, well sweeping Estonia, well a wing of the neo-conservatives in Estonia. .. The millionaire to pay exactly the same tax rate as the young nurse, the home help, the worker on the minimum wage. "
Gordon Brown, 2005
http://www.guardian.co.uk/politics/2005/sep/26/spe...
We do not have the rates that the OP states.
NI is just another income tax so here's the true income tax rates including that:
0 to 4940 pay 0%
4940 to 6475 pay 11%
6475 to 43875 pay 31%
43875 to 43888 pay 51%
43888 to six figures pay 41%
Why do they bother with NI and income tax?
Why is there a tax band that is only 13 quid wide?
Why are they taking 11% from the poorest workers?
Given that the lowest tax band is only 1535 quid wide and only takes 11% of that why not just scrap it and have a bigger personal allowance?
Why not combine NI and income tax?
Why not just have one personal allowance (replacing the current 7) and one rate of tax (replace two rates of NI and three rates, including the 150k one, of income tax)?
Is the real reason to create a system so complex that hardly anyone realises what they really pay?
NI is just another income tax so here's the true income tax rates including that:
0 to 4940 pay 0%
4940 to 6475 pay 11%
6475 to 43875 pay 31%
43875 to 43888 pay 51%
43888 to six figures pay 41%
Why do they bother with NI and income tax?
Why is there a tax band that is only 13 quid wide?
Why are they taking 11% from the poorest workers?
Given that the lowest tax band is only 1535 quid wide and only takes 11% of that why not just scrap it and have a bigger personal allowance?
Why not combine NI and income tax?
Why not just have one personal allowance (replacing the current 7) and one rate of tax (replace two rates of NI and three rates, including the 150k one, of income tax)?
Is the real reason to create a system so complex that hardly anyone realises what they really pay?
Probably a repost but food for thought
Suppose that every day, ten men go out for beer and the bill for all ten comes to £100.
If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay £1.
The sixth would pay £3.
The seventh would pay £7.
The eighth would pay £12.
The ninth would pay £18.
The tenth man (the richest) would pay £59.
So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve.
'Since you are all such good customers,' he said, 'I'm going to reduce the cost of your daily beers by £20.
Drinks for the ten now cost just £80.'The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers?
How could they divide the £20 windfall so that everyone would get his 'fair share?'
They realized that £20 divided by six is £3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid £2 instead of £3 (33%savings).
The seventh now pay £5 instead of £7 (28%savings).
The eighth now paid £9 instead of £12 (25% savings).
The ninth now paid £14 instead of £18 (22% savings).
The tenth now paid £49 instead of £59 (16% savings).
Each of the six was better off than before and the first four continued to drink for free, but once outside the restaurant, the men began to compare their savings.
"I only got a pound out of the £20," declared the sixth man. He pointed to the tenth man, "but he got £10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a pound, too. It's unfair that he got TEN times more than I!"
"That's true!!" shouted the seventh man. "Why should he get £10 back when I got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"
The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something very important....
they didn't have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and college professors, is how our tax system works.
The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore.
In fact, they might start drinking overseas
Suppose that every day, ten men go out for beer and the bill for all ten comes to £100.
If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay £1.
The sixth would pay £3.
The seventh would pay £7.
The eighth would pay £12.
The ninth would pay £18.
The tenth man (the richest) would pay £59.
So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve.
'Since you are all such good customers,' he said, 'I'm going to reduce the cost of your daily beers by £20.
Drinks for the ten now cost just £80.'The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers?
How could they divide the £20 windfall so that everyone would get his 'fair share?'
They realized that £20 divided by six is £3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid £2 instead of £3 (33%savings).
The seventh now pay £5 instead of £7 (28%savings).
The eighth now paid £9 instead of £12 (25% savings).
The ninth now paid £14 instead of £18 (22% savings).
The tenth now paid £49 instead of £59 (16% savings).
Each of the six was better off than before and the first four continued to drink for free, but once outside the restaurant, the men began to compare their savings.
"I only got a pound out of the £20," declared the sixth man. He pointed to the tenth man, "but he got £10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a pound, too. It's unfair that he got TEN times more than I!"
"That's true!!" shouted the seventh man. "Why should he get £10 back when I got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"
The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something very important....
they didn't have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and college professors, is how our tax system works.
The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore.
In fact, they might start drinking overseas
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