Proposed change to the tax system, 30% rate for all....

[No1newts]

No more so than the false sense of entitlement that the cry baby socialists harp on about.

The problem in this country is down to succesive governments pandering to specific cuts of the demographic. Labour did an awful lot of pandering to the so called 'poor' and left us with a legacy of 'benefit earners', who have basically been programmed to believe the wealthy are required to keep the poor.

Tory governments have pandered to the capitalists / wealthy, making them beleive that they are entitled to pay less tax as they are the 'creators' of wealth.

What needs to happens is a government somewhere needs to grow a pair and do whats right for the good of the entire country without playing the favour cards to the chosen voting demographic.

Too much worrying about returning to office and not enough worrying about good policy making is why most of the governments we have had over the past 20 to 30 years have literally failed to deliver on all counts.

Cameron is doing a fine example of this now, I think he is making policy simply for ratings and not for good politics sense. Milliband and Balls are jsut points scoring, because even if they got into the hot seat they'd be equally screwed.

Maybe the politicians should be 'all in this together' before they start lifting fivers out of my wallet. All parties should sit together and actually work out a way of getting UK Plc back on track, rather than playing their usual palyground antics at PMQ's.

This. This +11111111111111.

Politicians need to put aside personal squabbles in the quest for personal success and put the country first. I would love to see the parties put aside party politics and present a combined front to our problems.

Never happen though they ate too self obsessed and wanting to suit themselves and furthe r their own careers rather than doing their jobs.

 

[estebanrey]

There is paying your way and then there is punitively punishing for punishings sake.

look at it from another angle. The wealthy could say they actually pay more than their way as they use less public money than the poor. e.g someone on over 200K a year will not get any of the benefits that a low income earner would. SO the argument could so easily be reversed into saying 'why should we pay more when we use less? '

Now I am not saying I agree with that statement, but your argument is null. its not about paying your way, its about raising revenue for the government to deliver public services. You can tax the wealthy to a certain point where they likely wouldn't care, but if you simply start jacking the rates up to get more cash from one slice of the tax paying community do you think they will stick around ?

High taxation is only viable when those paying it are 1. Here to pay it, and 2. Although they dislike it are not that incensed that they would rather move their business elsewhere.

After a certain level high levels of tax become disingenuous. The trick is to extract high taxes from the wealthy without making it in their face. This is why all the left wing tripe about tax these rich *******s and bankers back to the stoneage will never work. Its not that difficult to move your entire operation to another 'tax friendly location'.

Many large business organisations have these kinds of plans in a dusty drawer for when they know they are going to get a savage sting. So unless taxation is applied evenly across the world by all countries these people will naturally gravitate towards the ones where there is less tax burden, taking with them a lot of potential jobs.

example

http://www.telegraph.co.uk/finance/...veals-plans-to-quit-London-for-Hong-Kong.html

now if that went ahead how many job losses would there be of people who would mostly be in the 40% Tax bracket with a few in the 45% all who are paying 40% on their bonus cheques.

That equates to a far larger loss than could be possibly gained by hiking their tax levels ups

The way I see it a progressive tax system is a sticking plaster to unfair distribution that's why higher earners (IMO) have higher tax rates right now. If the pay was more fairly distributed then you could have a flat tax.

This is the issue that people who support this idea keep missing, as if the market forces that apply to define what people get paid are based on nothing but merit and there is no disparity in fairness between the guy at the top and those at the bottom.

It's simple, if those at the top want to pay less tax then instead of moaning at the government to stop asking them for so much, why don't they pay their staff better who would then go out and buy more stuff which in turn would make them richer?

This 'trickle' down economic theory has been discredited, time to try more of a trickle up based system.

 

[Tute]

Okay, let's try another angle.

elmarko and estebanrey, what would you guys consider a fair taxation system?

 

[wildman]

No offence, but this is a load of tosh.

People are not asking for high earners to be taxed more so they can go "Yeah! screw those rich folk!" - they are asking so the wages can be more evenly distributed throughout the population via government redistribution.

Personally, I'd much prefer a society in which the government didn't have to do it - one in which business owners are paid more (but not 100's of times more) than the average worker, making the idea of a flat tax rate far more appealing for all involved (which I'd also support if we had a fixed max earnings ratio).

But alas, personal greed has forced the hand of the government to ensure the population have enough to continue the cyclic consumption to keep the capitalist model going.

Are you one of those people who think capitalism could survive without a state?.

But the problem is currently everyone is banging on about taxing the rich purely through emotion and not common sense. All you have to do is pick up the popular press and read page after page of how we should leather the bankers hard, and then leather those bonus payments a bit also. Incidentally I think bonus payments are nonsense at this juncture because I fail to see how anyone can get paid a bonus when the company they work for made a loss !!!

Capitalism or at least the so called version of it we have is dead already, what we need is system that is fair for all, that doesn't rely on people wanting to see those better off than them nailed all the time.

I know what you are saying, and any other year it would be right, but the current feeling now is simply about taxing the rich simply for emotional contentedness. Its not actually going to help us find the cash we need to fill the deficit hole anyway, but it makes the majority of us in the mid / low level bracket feel a sense of justice has been served.

 

[krooton]

The way I see it a progressive tax system is a sticking plaster to unfair distribution that's why higher earners (IMO) have higher tax rates right now. If the pay was more fairly distributed then you could have a flat tax.

This is the issue that people who support this idea keep missing, as if the market forces that apply to define what people get paid are based on nothing but merit and there is no disparity in fairness between the guy at the top and those at the bottom.

It's simple, if those at the top want to pay less tax then instead of moaning at the government to stop asking them for so much, why don't they pay their staff better who would then go out and buy more stuff which in turn would make them richer?

This 'trickle' down economic theory has been discredited, time to try more of a trickle up based system.

I employ 100 staff. If I pay them each £1k more, my operating costs increase by £100k. How much of that £100k is likely to be spent by my employees on goods/services that my own company gains its revenue from?

 

[wildman]

I employ 100 staff. If I pay them each £1k more, my operating costs increase by £100k. How much of that £100k is likely to be spent by my employees on goods/services that my own company gains its revenue from?

Next to none unless you run a business the produces goods that are commonly consumed by everyday people. If its something specialised le.g electrical cable trunking for data centres then 0. If you are a brewery then maybe it will be a lot higher

 

[Hagar]

As I have said earlier, well off people can reduce their tax bill by being paid in dividends or using the capital gains system to lower marginal tax rates. Under this proposal that is ineffective as all income however derived is taked at 30%. This is where the government will gain income through making it harder to avoid paying tax.

 

[realBabelfish]

No, why should they care if they are getting a wage that ensures they are living at a reasonable standard i.e have food on the table, can put clothes on the children's backs and have a house to live in.

Again people should worry about their own positions and not about how they can have punishment loaded on to someone who is in a better position than theirs.

"Yeah its not fair that Lewis Hamilton drives a DB9. god damn I want to drive one, so because I can't lets tax that git hard because it makes me feel better."

That is the basic argument of most of the left I read not only hear but in the press.

not great example as lewis doesnt live here any more. as soon as he started earning big cash he buggered off to Switzerland.

i think people are saying that they arent now getting that livable wage. prices are going up for everyone - but the poor and lower paid (even middle earners) are losing out more than the rich as they dont have those thousands a year above and beyond simply living.

sure, benefits scroungers shouldnt expect a nice living on benefits but many hard working people are struggling at the moment.

i dont mind people earning big money but when the majority of us are struggling to provide for our families it doesnt help that they see money being wasted by government or tax cuts for the super rich. surely in times of austerity the people who have benefited the most should help out a little bit more?

lots of low to middle earners dont use a lot of services either. should they expect to see their taxes cut accordingly?

a lot of people here seem to be categorising low earning hard working people in the same boat as those with no concept of hard work who live on benefits and will purposefully do that. a lot of unemployed people have been made redundant as businesses are going up in smoke all around us. there arent enough jobs for everyone at the moment.

 

[estebanrey]

I employ 100 staff. If I pay them each £1k more, my operating costs increase by £100k. How much of that £100k is likely to be spent by my employees on goods/services that my own company gains its revenue from?

I don't know because I don't know what your company does but any company that makes it's money from mass consumerism (either directly or indirectly) will.

 

[estebanrey]

Okay, let's try another angle.

elmarko and estebanrey, what would you guys consider a fair taxation system?

I think you'd find myself and elmarko have quite different views on them. I'm about equality of opportunity, he seems more about opportunity of outcome.

I briefly mentioned in another thread the kind of system I'd like to see (where your tax rate is based directly on the rumuneration policy of the company that employs you) and have been meaning to geting around posting a thread on it.

 

[krooton]

I don't know because I don't know what your company does but any company that makes it's money from mass consumerism (either directly or indirectly) will.

No way will a company gain revenue back from the wages it pays its own employees. I'd be surprised if even 5% of that came back in, and that's not factoring in things like employee discounts should they have them.

 

[elmarko]

Okay, let's try another angle.

elmarko and estebanrey, what would you guys consider a fair taxation system?

Taxation is never going to be remotely fair until the disparity in incomes has been dealt with.

I want poor people to pay more tax, but I want it done as a result of them having a greater share of the income.

The system is a mess because the state is subsidising business by giving benefits to people to top up wages which are insufficient - which then the government has to take from tax from somebody else to plug the gap.

In our current system?.

Increase the tax free allowance to 20k - increase the top rate to compensate.

While at first people will go "omg that's taxing the rich" - but the increased spending power of 95% of the population would yield greater sales/use of services (which in turn would cause economic growth & increased business profits).

Once the economy grows, the tax rate can be decreased for the top earners (but wages would need to be kept within a certain ratio to ensure they don't go out of whack again).

If the market was left unfettered the spending power of the citizens would be eroded to such a degree cyclic consumption would collapse.

I think you'd find myself and elmarko have quite different views on them. I'm about equality of opportunity, he seems more about opportunity of outcome.

I'm not about equality of outcome, just don't wish hardship on people who are a victim of poor parenthood/environment.

 

[estebanrey]

No way will a company gain revenue back from the wages it pays its own employees. I'd be surprised if even 5% of that came back in, and that's not factoring in things like employee discounts should they have them.

Where do you think consumers get their money from? Thin air?

I don't see what's so hard to understand here, if money was more evenly distributed through wages, the people at the bottom (who also make up the 'mass market') would have more money to spend, which in turn would create a more efficient economy.

Do you think companies like Ford, Amazon, Tesco do well when 99% of their customer base has less money to spend?

 

[krooton]

Where do you think consumers get their money from? Thin air?

I don't see what's so hard to understand here, if money was more evenly distributed through wages, the people at the bottom (who also make up the 'mass market') would have more money to spend, which in turn would create a more efficient economy.

Do you think companies like Ford, Amazon, Tesco do well when 99% of their customer base has less money to spend?

I think you will find that business with frequent repeat custom, like Tesco or Weatherspoons do better, companies with infrequent customer lifecycles, like say Dell, would not benefit by increasing their staff's salaries.

Businesses that sell a single product infrequently for a substantial sum lose out as their payroll costs happen every month, whereas one of their employees is only likely to buy a laptop every 2 years. The increased salary they give their employees will be spent elsewhere, like at Tesco or Weatherspoons.

 

[estebanrey]

I think you will find that business with frequent repeat custom, like Tesco or Weatherspoons do better, companies with infrequent customer lifecycles, like say Dell, would not benefit by increasing their staff's salaries.

Businesses that sell a single product infrequently for a substantial sum lose out as their payroll costs happen every month, whereas one of their employees is only likely to buy a laptop every 2 years. The increased salary they give their employees will be spent elsewhere, like at Tesco or Weatherspoons.

And because of the increased business, Tescos or Weathersppons may decide the need more Dell PCs to do the admin on.

I'm talking about the economy as a whole here, not looking at invidual cases and no business is 'cut off' from the rest of the economy whereby their actions and the actions of other businesses have no effects on them as your post seems to imply.

And I don't understand the premis of your argument anyway, companies with more frequent return business tend to make less on each transaction so have the same amount of total money coming into the business over the course of a year as if they sold less for more. It's not like a bloke who sells Feraris is making the same profit as someone selling Nissan Micras on each car is it.

 

[Angilion]

You're making the assumption that 'the rich' aren't currently over paying themselves to compensate for the current amounts of tax they are paying and that if they had to pay less they may well demand lower base salaries, leaving a bigger share of the pit for everyone else.

I've always believed that if you had a flat tax rate, those at the top would get paid less as a gross figure but get the same net due to lower tax levels. This difference can then get redistributed to those at the bottom.

Why on earth would you believe that?

There are a few rich philanthropists who would take a pay cut(*) to ensure that low-end workers aren't even worse off than they are now, but it really is only a few. The idea that it would be universal is, frankly, silly. You may as well believe that aliens and faeries dance together in the moonlight somewhere in Shropshire, every third tuesday.


* Yes, I know you're not talking about a cut in actual pay. You are talking about a cut in stated pay though, which means a reduction in the person's score, which means a reduction in status - it will be perceived as a pay cut.

 

[UK-AL05]

The rich, like anyone gets paid as much as they can get away with.

It has nothing do with compensating for tax or anything. If they can get the extra cash, they try to get it.

 

[A2Z]

In our current system?.

Increase the tax free allowance to 20k - increase the top rate to compensate.

While at first people will go "omg that's taxing the rich" - but the increased spending power of 95% of the population would yield greater sales/use of services (which in turn would cause economic growth & increased business profits).

Agreed, if I had an extra £x amount of cash every month, I would definately be spending it.

I'm the 'live for the moment' type, so yes while I may save up for stuff like holidays etc, I would much rather spend my money than have it sittin in a bank.

 

[estebanrey]

The rich, like anyone gets paid as much as they can get away with.

It has nothing do with compensating for tax or anything. If they can get the extra cash, they try to get it.

If true, then why does history show that at certain levels of taxation you get less the higher it is?

 

[Dave M]

Never trust simple solutions to complex problems.