What level of taxation is "fair"?

[spudbynight]

It might be fair, but with the wage gap what it is, would be completely unfeasable.

It would either leave those on lower incomes in a position where they were unable to afford to live, or result in a huge deficit in the amount of tax collected.

I agree it is probably not feasible - or just.

I take exception to the rhetoric from some who talk about the need for people to pay their fair share. What is needed is for some people to actually pay MORE than their fair share.

I think that people on minimum wage do not pay their fair share in tax. I think them paying even less would be just.

 

[scorza]

Fair to me is everyone pays same percentage. So at the moment it's very unfair, especially for the payee high earners who can't avoid tax. Why oh why can't we have a very simple tax system. Not just payee but everything. First ~£16k should be tax free then a flat rate after that. Rate depends on what we want as a society. Do we want little tax and buy everything ourselfs, or do we want very high tax rate but have very good free services(if it was spent properly) or something in-between. Tbh I don't realy mind which way, but at the moment it's just wasted. How much money is waste issuing and enforcing VED, or on are complicated tax rates.

You know that under a flat tax there's normally two rates of tax; a threshold under which the tax rate is 0% and above it the tax rate is x%. If everyone should pay the same percentage why not just have one tax rate and scrap the threshold? BTW, a progressive income tax regime is NOT an example of a complex tax regime, it's not even GCSE level maths.

 

[Haggisman]

It doesn't. Starvation is a great incentive to work.

And for those who work 40 hours a week and still can't afford to live?

 

[Glaucus]

You know that under a flat tax there's normally two rates of tax; a threshold under which the tax rate is 0% and above it the tax rate is x%. If everyone should pay the same percentage why not just have one tax rate and scrap the threshold? BTW, a progressive income tax regime is NOT an example of a complex tax regime, it's not even GCSE level maths.

Did you totally ignore the first £16k tax free. Why do we have and need a threshold, so people can afford to live.
Are tax system is very complex and costly to run. Regardless of what maths is involved, maths isn't the only aspect of how hard it is to administer, collect and enforce.

 

[Tefal]

You know that under a flat tax there's normally two rates of tax; a threshold under which the tax rate is 0% and above it the tax rate is x%. If everyone should pay the same percentage why not just have one tax rate and scrap the threshold? BTW, a progressive income tax regime is NOT an example of a complex tax regime, it's not even GCSE level maths.

The 0% applies to everyone though doesn't it?

ie your first earnings under that threshold arn't taxed anything over is.

 

[PondPikey]

Didnt read thread.

But anyone that owns more than one house should be royally rogered for tax IMO.

 

[Glaucus]

Didnt read thread.

But anyone that owns more than one house should be royally rogered for tax IMO.

Thats not the issue. The issue is high lending and planning permission/lack of houses. Solve the house shortage and stop 6x wages and people wouldn't moan about second home owners. It would also limit profits available on houses.

 

[Spook187]

And for those who work 40 hours a week and still can't afford to live?

Thumbs up,i think it's disgusting hard working people who don't have well paid jobs,do the hours and still struggle,and all we get off the politicians is them saying we understand your hardship we really do,NO YOU DO NOT,you havn't a clue about the people in this country except your own kind

 

[PlacidCasual]

But how is it fair on high earners to pay ever more tax on their earnings? Higher earners pay a disproportionate amount of income tax which is a truism I guess.

If I'm paying several times the income tax of someone on notional average income at what point can we not say "they're doing their fair share". As a higher earner you don't necessarily use more state funded services, often it's the opposite.

I agree in the partial socialisation of costs, I can afford to pay more into the central pot than my neighbours, 10 years ago I earned less than them but had the same safeguards (even if I didn't use them) and now I earn more. I accept that.

But why should I be expected to carry a burden at an increasing rate just for working hard and using my talents. It irks me. Now I have had opportunities to leave this country and take my earning potential with me, I've not reached the point where the tax regime is so punishing that it would figure in my decision but I can understand how it might.

Fair is an entirely subjective concept but the current anger directed by the many who pay less towards the few who pay more is counter productive and symptomatic of our changing society where people expect others to pick up the costs of their lifestyle. The benefits of state spending are now seen as a right rather than a shared gift, this is distorting the concept of fair.

 

[PondPikey]

Thats not the issue. The issue is high lending and planning permission/lack of houses. Solve the house shortage and stop 6x wages and people wouldn't moan about second home owners. It would also limit profits available on houses.

I agree. Solve the house shortage first. But do this by limiting unscrupulous B2L landlords out for a quick buck who pray on hard working people.

Who actually needs to own a second home? Greedy people that's who.

Social Housing should be available to anyone that needs it at a reasonable price. End of.

 

[Castiel]

Its not really about fairness though, it is about whats necessary.

To be truely fair everyone would pay the same flat percentage of their income.

 

[Tefal]

Its not really about fairness though, it is about whats necessary.

To be truely fair everyone would pay the same flat percentage of their income.

however it would be equally fair if everyone got a set amount tax free before the flat rate kicked in.

 

[Xordium]

To be truely fair everyone would pay the same flat percentage of their income.

And when does treating everyone equally ever really end in any degree of fairness. Start going down that route and you'll have to join Dolph and the rest of the South Park crew.

But I do agree with the concept of it all being a balancing act. It is also very subjective to what you think fair means. And is very much related to what you need to do. But you can't do what you need to do when there is no overall goal of what you are trying to achieve which seems quite relevant to this one as it seems rather stuck between what it realistically can be, what it wants to be and what it thinks it should be from a historical point of view.

 

[Haggisman]

Did you totally ignore the first £16k tax free. Why do we have and need a threshold, so people can afford to live.
Are tax system is very complex and costly to run. Regardless of what maths is involved, maths isn't the only aspect of how hard it is to administer, collect and enforce.

The thing is, £16k is barely enough to live in some parts of the country. You may say that the low earners shouldn't live in those parts of the country, but Central London (as an example) still needs binmen, still needs shelf-stackers in the supermarkets, bus drivers, etc.

With the taxed earnings above £16k, you either tax it at a level which is sufficient to meet the tax budget, but is extremely harsh on those only just over the tax free threshold, or you tax at a level which is reasonable on the low earners, but simply doesn't generate enough revenue to run the country.

While the higher earners may feel it's "unfair" to subsidise the taxes of the lower earners by paying more tax, the alternative is that the low earners are paid more, which will result in increased prices for the services provided by those low earners, be it public transport, shop prices, or council tax. Either way you'll be paying for it.

however it would be equally fair if everyone got a set amount tax free before the flat rate kicked in.

Agreed, but the threshold would have to be higher than £16k, more like £20-25k, and then a higher rate of tax on top of that - say 30-40%

 

[Castiel]

however it would be equally fair if everyone got a set amount tax free before the flat rate kicked in.

Of course....it does depend on how you define fairness...which is how people justify varying tax rates dependant on gross income.

Another way to have a fair system is to make everyone pay for services they use...or everyone pays 100% tax and is then allocated a set income by the state, or any number of equal systems......

However, if you use other criteria, such as an individuals value to the economy or whatever, then the nature of that initial fairness no longer looks so fair.

Perspective is a bitch.

 

[scorza]

Did you totally ignore the first £16k tax free. Why do we have and need a threshold, so people can afford to live.
Are tax system is very complex and costly to run. Regardless of what maths is involved, maths isn't the only aspect of how hard it is to administer, collect and enforce.

No I didn't, that's what a 0% tax rate is - tax free. My question is why, if as flat tax proponents suggest, "everyone should pay the same rate", is it necessary to have a tax free rate? So that people can afford to live is what you suggested, fair enough, but it's the same principle for why people earning their 16,001st pound shouldn't get taxed at the same rate as someone earning their 160,001st pound.

Our tax system is very complex, however the income tax thresholds are not,nor is it particularly costly to administer or collect this scheme.

 

[D.P.]

As has been mentioned already, what is fair is not the same as what is feasible, and what is right, and the current taxation system is non of the above.


Really, the fairest possible tax would be that as far as possible everyone pays individually for every cost that the government incurs due to them. e.g., if you get sick then you should pay for it yourself, if you needed to call the fire brigade to put out you house fire then you should cover those costs. The best way to handle these costs is through a private insurance scheme. If you want to go to university you pay every penny. you want to have children then you have to support them 100%, including paying all education costs.

The problem with this is there are lots of costs you cannot individually bill people, costs just to keep the country in order. So you would really need a fixed tax levied on all people. Simply some the running costs of the country and divide by the population. Those with kids will have to pay for the prorata rate for each child. So in the end everyone will have to shell out 10-20,000GBP .

Obviously not everyone could afford the fixed tax amount and you still want to provide some social cover for those through no fault of their own need assistance and cannot afford it.

However, every strep from the above tax model towards reducing the cost on the poor and increasing the tax costs on the wealthy is a move away form fairness. The moment that someone has to pay a penny than someone else in identical situation is a an unfair imbalance. However, for a number of reasons it is required.


So he next best thing is to have a flat-rate income tax with a suitable pre-tax allowance. This already means that person X who earns twice what person Y does will pay much more tax, even although there is no objective difference in each person costs to the government. You are basically penalising those who are successful. Fine, but this is about the limit of any tax system that is a balance of fairness and feasibility.

Any move beyond this to increase taxes further for higher earners is a massive step towards inequality and unfairness, and is really hard to justify. I certainly see no reason to inflict a progressive income tax system and I am firmly in support of a fixed rate tax.

Taxable courses can come form other places, such as increased consumer taxes like VAT, fuel tax, alcohol tax, duty, and other thing like capital gains taxes.

 

[Glaucus]

No I didn't, that's what a 0% tax rate is - tax free. My question is why, if as flat tax proponents suggest, "everyone should pay the same rate", is it necessary to have a tax free rate? So that people can afford to live is what you suggested, fair enough, but it's the same principle for why people earning their 16,001st pound shouldn't get taxed at the same rate as someone earning their 160,001st pound.

.

Everyone gets taxed the same, everyone would get 16k tax free. I don't get where you are coming from. 16k is what is deemed nessecary to live in th uk or at least was. Can't find any recent figures. So no one is being taxed different like you suggest.

With the taxed earnings above £16k, you either tax it at a level which is sufficient to meet the tax budget, but is extremely harsh on those only just over the tax free threshold, or you tax at a level which is reasonable on the low earners, but simply doesn't generate enough revenue to run the country.

It's not harsh on anyone, I picked 16k as that's the figures I have seen for the breadline. You cab easily live in London for that price, it's just people think they are entitled to more. My mate paid 400 a month for a room with all bills off fuller road. So it is doable. But the rate should be set at or just above the breadline what ever that is. Anything above that is a luxury and as such flat tax. If that is now 20-25k then that's fine. But that sounds way to high.

 

[D.P.]

The thing is, £16k is barely enough to live in some parts of the country. You may say that the low earners shouldn't live in those parts of the country, but Central London (as an example) still needs binmen, still needs shelf-stackers in the supermarkets, bus drivers, etc.

With the taxed earnings above £16k, you either tax it at a level which is sufficient to meet the tax budget, but is extremely harsh on those only just over the tax free threshold, or you tax at a level which is reasonable on the low earners, but simply doesn't generate enough revenue to run the country.

While the higher earners may feel it's "unfair" to subsidise the taxes of the lower earners by paying more tax, the alternative is that the low earners are paid more, which will result in increased prices for the services provided by those low earners, be it public transport, shop prices, or council tax. Either way you'll be paying for it.



Agreed, but the threshold would have to be higher than £16k, more like £20-25k, and then a higher rate of tax on top of that - say 30-40%

The tax-free threshold can be adjusted for different regions of the country, and there could be small allowances for children say. But it would be important to keep the system fairly simple. Somewhere around the 16K mark is reasonable, perhaps 18K in London, 14.5K in rural scotland etc. 1.5K allowance per child

 

[Haggisman]

The tax-free threshold can be adjusted for different regions of the country, and there could be small allowances for children say. But it would be important to keep the system fairly simple. Somewhere around the 16K mark is reasonable, perhaps 18K in London, 14.5K in rural scotland etc. 1.5K allowance per child

So how is it fair to tax someone more because they live in rural Scotland? I thought you were advocating a flat tax rate?