The Budget™ 2009

[elroberto]

Yes, otherwise you might not be able to get a nicer car

Think of the poor people who build and sell the products that people with more money buy. Do you want them to lose their jobs. Raising the taxes on the rich just means that the very rich (Who pay 98% of all tax receipts) will leave, just as they did in the 70's because they can afford to move and they'll get a better deal elsewhere. Our economy has become too weak to scare off these revenue generators as if our country is ever going to recover we need them to be spending here boosting our commerce. It's an irrelevant argument at the moment though because we will all be paying more for the next few years anyway, but after that changes need to be made to restore this country to what it once was.

 

[muon]

Exactly. If I strive to better myself and earn more, why should I be punished by paying a higher percentage of my incomings to the tax man? I'm already paying more by virtue of the percentage - why skew the figures even more?

Because you are earning more because you were lucky you weren't born in a council estate. So provides some form of equity in that regards.

It is this crucial opinion which determines how much redistribution takes place as papers have shown. The US which has a firm belief in the American Dream has the lowest redistribution because of that. Data has shown that social mobility is massively overestimated there though.

The UK has one of the worst social mobility rates in the industrial world which should strengthen the belief that earnings in life have a massive luck component.

Again social mobility is another massive debate. In theory, if we can promote social mobility vertical equity becomes more important.

 

[Basher]

Because you are earning more because you were lucky you weren't born in a council estate.

I was, actually.

 

[Sankari]

Sliding tax systems are not fair, they punish people for earning more.

Or, to put it more accurately, they ensure that people do not pay more tax than they can reasonably afford.

30% flat tax for a guy on £100,000 is no problem. 30% flat tax for a guy on £15,000 is potentially life-shattering. A flat tax makes no allowance for personal circumstances. It's a system designed to keep the rich at the top and the poor at the bottom.

A flat tax system is fair.

A flat tax system is so mind-blowingly stupid that only a handful of countries have actually bothered to introduce it. The current list includes economic success stories like Georgia, Latvia, Russia, Iraq and Kazakstan.

Increasing the income tax burden on any group of taxpayers (rather than all taxpayers) should be considered politically and morally unacceptable.

Why?

 

[muon]

I was, actually.

An exception doesn't prove anything. I didn't say social mobility doesn't exist. Similarly downward movements exist, and it is people's interest to have some kind of mechanism to prevent poverty.

edit: I suppose I should have said, you most likely weren't born in a council estate and so a mistake on my part.

 

[starfighter]

Flat tax system is stupid, yes it is already a % but once you earn a certin amount you are already living a very good life so you sould help (ok the government is rubbish and currupt but i live in hope).

social mobility is imo the big problem. How many people that started ff on a council estate end up on one and how many people that were born with a silver spoon in their mouth ended up on one?

If you are born rich you essentially cannot fail. If nything we need a 70% bracket for over 100k.

 

[Dolph]

Keyword in my post: unfair. No one is being targeted unfairly. It is not unfair to treat people differently, therefore it is not unfair to tax higher earners at a higher rate. However it would be unfair to tax low income earners at a higher rate than higher earners despite the fact that basher could get a nicer car that way.

You have said this before, but never really been able to provide justification.

Fairness would be treating everyone's earned income the same, that's why I support NIT, it's a fair system.

The current system does not treat everyone the same, it penalises those who earn more by taking more of their earnings as a percentage.

 

[scorza]

Think of the poor people who build and sell the products that people with more money buy. Do you want them to lose their jobs. Raising the taxes on the rich just means that the very rich (Who pay 98% of all tax receipts) will leave, just as they did in the 70's because they can afford to move and they'll get a better deal elsewhere. Our economy has become too weak to scare off these revenue generators as if our country is ever going to recover we need them to be spending here boosting our commerce. It's an irrelevant argument at the moment though because we will all be paying more for the next few years anyway, but after that changes need to be made to restore this country to what it once was.

And low income earners don't buy things? From what I remember from my economics lectures 10 or so years back, lowering the tax burden on the less wealthy is a better way to stimulate the economy - marginal consumption or something. Therefore high earners should be extremely grateful that they live in a society with a non-linear income tax policy or they might not be earning as much as they are at the moment.

 

[Dolph]

Or, to put it more accurately, they ensure that people do not pay more tax than they can reasonably afford.

30% flat tax for a guy on £100,000 is no problem. 30% flat tax for a guy on £15,000 is potentially life-shattering. A flat tax makes no allowance for personal circumstances. It's a system designed to keep the rich at the top and the poor at the bottom.

Which is why you implement the flat tax by a negative income tax model.

Why?

Because a fair system doesn't take a greater proportion of one individuals earned income than anothers?

 

[Sankari]

If nything we need a 70% bracket for over 100k.

I would not go that far; it's blatantly excessive. 40% is fine; no need for anything higher.

Remember though, that people at this end of the income scale have greater opportunities for tax reduction than people at the other end of the scale. A bloke pulling in £100k will have investments and assets which can be off-set against his tax liability.

I do this myself by running my Australian investment property at a loss for the purpose of reducing my (Australian) taxable income. My British income is not affected because the property is offshore and the money I make from it never enters the UK. It's a nice little trick, and perfectly legal.

 

[platypus]

I would not go that far; it's blatantly excessive. 40% is fine; no need for anything higher.

Remember though, that people at this end of the income scale have greater opportunities for tax reduction than people at the other end of the scale. A bloke pulling in £100k will have investments and assets which can be off-set against his tax liability.

I do this myself by running my Australian investment property at a loss for the purpose of reducing my (Australian) taxable income. My British income is not affected because the property is offshore and the money I make from it never enters the UK. It's a nice little trick, and perfectly legal.

Bloody immigrants, stealing our taxes!

 

[meghatronic]

Flat tax system is stupid, yes it is already a % but once you earn a certin amount you are already living a very good life so you sould help (ok the government is rubbish and currupt but i live in hope).

social mobility is imo the big problem. How many people that started ff on a council estate end up on one and how many people that were born with a silver spoon in their mouth ended up on one?

If you are born rich you essentially cannot fail. If nything we need a 70% bracket for over 100k.

/facepalm

 

[Sankari]

Which is why you implement the flat tax by a negative income tax model.

Oh, you mean the Friedman solution. The one that has never seen the light of day; the one that even the Yanks didn't bother to try; the one in which taxpayers' money is used to supplement the earnings of lower income earners to an even greater extent than it does under the current system (surely you don't want the government paying out even more welfare, do you?)

Yeah, I'm sure that's a winner. Let me know if you ever find a country willing to implement it.

Because a fair system doesn't take a greater proportion of one individuals earned income than anothers?

Since the individual on the higher tax rate is earning more than the individual on the lower tax rate, how is it unfair? Remember also that the individual on the higher income has a greater potential for tax reduction. Nobody at the top of the income tree actually pays the full rate of tax for their group anyway; it's all watered down by tax reduction strategies.

Warren Buffett is one of the few super-rich elites who are actually willing to admit this:

Speaking at a $4,600-a-seat fundraiser in New York for Senator Hillary Clinton, Mr Buffett, who is worth an estimated $52 billion (£26 billion), said: “The 400 of us [here] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.”

Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent.
​

Source.

On paper, the richest people pay the most tax. But in reality they never pay the full amount, and often pay less than anyone else.

 

[Sankari]

Bloody immigrants, stealing our taxes!

Fear my evil tax reduction schemes!

 

[platypus]

Fear my evil tax reduction schemes!

I'm only jealous.

If you've a house down there, and you're over here, does that mean I could house sit for a few weeks holiday ?

 

[elroberto]

Oh, you mean the Friedman solution. The one that has never seen the light of day; the one that even the Yanks didn't bother to try; the one in which taxpayers' money is used to supplement the earnings of lower income earners to an even greater extent than it does under the current system (surely you don't want the government paying out even more welfare, do you?)

Yeah, I'm sure that's a winner. Let me know if you ever find a country willing to implement it.



Since the individual on the higher tax rate is earning more than the individual on the lower tax rate, how is it unfair? Remember also that the individual on the higher income has a greater potential for tax reduction. Nobody at the top of the income tree actually pays the full rate of tax for their group anyway; it's all watered down by tax reduction strategies.

Warren Buffett is one of the few super-rich elites who are actually willing to admit this:

Speaking at a $4,600-a-seat fundraiser in New York for Senator Hillary Clinton, Mr Buffett, who is worth an estimated $52 billion (£26 billion), said: “The 400 of us [here] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.”

Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent.
​

Source.

On paper, the richest people pay the most tax. But in reality they never pay the full amount, and often pay less than anyone else.

That 46 million figure is probably bogus though. Close down the loopholes and he'd pay a lot more.

 

[RaohNS]

someone is saying about why should they pay more for the hard work they have put in...

While i'll admit that the chances are most "rich" people will work hard for their money, there are bankers or as i call them w....ers who are being paid for being negligent.

Flat tax is definately not fair... simple fact is that it will mean either more disposable income for the rich with the poor(er) being kept the same OR less disposable income for the rich and an even more precarious situation for the poor...

For arguments sake lets take this:
Flat rate 20%
100k earner pays £20k earns £80k (if you can't live on this i'll swap jobs)
20k earner pays £4k earns £16k (this for an average family with a £600 mortgage)

Flat rate of 30%
100k earner pays £30k earns £70k
20k earner pays £6k earns £14k (getting bit even harder)

Thus only the rich will get richer which ironically is what the Conservatives are all about. They only look after the mega rich, interest goes up to benefit those with 50k plus in the banks and its the poorest 60% (a majority) who bear the brunt of this when it comes to housing costs which is the main economic boost besides big business of course)

Either way for all Labours faults Gordon Brown has set the stage at the IMF last month to get the world economy rolling. Ironically David "man in a shed" Cameron says "Democrats share Conservative values"... strange that considering Republicans are Conservatives and Democrats are Labour... man that guy knows sooooo much all image no substance

It doesn't help the press being ran primarily by Conservatives.. read on another forum Labour wreck the Economy and the Tories come in and save it... how odd? Tories in 1997 left with a 44.7% National debt... under Labour in 2009 according to the ONS our National debt (despite the bail outs) is 45% iirc what any sensible person will conclude is that Labour have lowered debt and because of Conservative Party paying owners of banks who have landed the country in this mess and its Labour who are picking up the pieces of their greed.

 

[Sankari]

I'm only jealous.

If you've a house down there, and you're over here, does that mean I could house sit for a few weeks holiday ?

No chance mate, we need the mortagage paid somehow!

 

[Sankari]

That 46 million figure is probably bogus though. Close down the loopholes and he'd pay a lot more.

It's not bogus. But you're right about the loopholes. That's the whole point.

 

[Deleted User 234324]

You mean it's funny because it's often true?

Yeah, often the people that say that are pulling in upwards of 2k a month in benefits, yet because of poor education the best they could get job wise is probably stuck behind a checkout till in a supermarket working for minimum wage. They'd have to pull a 100 hour week to keep that level of income.

Hence my disgust for the whole system, why should someone who does absolutely **** all to contribute to society get more money than someone who is actually trying to make a difference.