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

[The Halk]

Inheritance tax must NOT be abolished. I'll explain why.

If I have 500mil in property and equities and leave it to my son, it will be of such an amount that it will naturally gather more wealth. Unless he was a bag of spanners then he'd be hard pushed to spend more than it earned. He'd be a trust funder. No matter how much of a coke headed party boy he was, he couldn't burn it all - in all likelihood I'd set it up so that it provided him an income, so he'd find it almost impossible to burn it all.

Once wealth reaches a certain point it has such a gravitational pull on other wealth that it breaks the system.

We are not at that point now. We used to be. The feudal system was exactly that point. 100% of the wealth in the country was owned by the Lords. The poor people were serfs. The UK got rid of serfdom long before other countries so we don't have the same historic resentment against it, but that is where we will go back to once all the wealth has accumulated to the rich - we are clearly headed in that direction. Capitalism broke the mould there. Professionals, entrepreneurship and industrialists cut into the business of the aristocrats and the scales tipped, and wealth scattered. We now, unlike any other point in the entire history of civilisation live in great times. There is not the few commanding the many, relatively speaking.

Inheritance tax is the great leveller, it is what will ensure nobody can gather wealth to the point where it gains mavity - and if they do it won't last down generations.

There are two kinds of people we get most tax from - the rich and the high earners. The high earners are often rich, but the two terms are not mutually inclusive.

We need to raise revenue one way or another. We should be raising revenue less on income tax - because that discourages people from creating wealth. Wealth creation must be encouraged, and not penalised. However we solve inequality and raise revenues if we have significant inheritance tax - and legislation to close loopholes.

 

[The Funktopus]

Well if everyone gets more money, how will this help the deficit.

No doubt I'll have some pedant jump down my throat for saying this, but theoretically, wouldn't it get people spending more, creating more revenue in VAT, more jobs due to increased demand and so forth?

Yes, I realize I am but a tool of the wage-slaving bourgeois etc.

At first glance, I'd be quite happy with a 30% tax rate with where I'm hoping to go with my career, but I think giving Councils a say in sales taxes etc would be akin to opening Pandora's box, so I'm wary of that aspect.

 

[Jonny L]

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 fail to see how you can consider most (not all) high earners to be benefiting from unfair distribution of wealth. Have you thought about how hard they work to accumulate that wealth? Or how many years they spent training/studying in order to be qualified to do so?

I personally am not a high earner (far from it ) but my Dad is, now when I was a kid I would see my Dad between the hours of 8pm until I went to bed (and obviously weekends). He would get up at 5.30 am, leave for work at 7.00am and return home at 20.00. He worked hard all day and often without a break, and he earned a very good wage. Now does it seem fair to you that there is an inordinate amount of people in this country that deem it unfair that he should make said good wage considering they work far fewer hours, in a much less skilled position and are probably under far less stress?

It doesn't to me...

People who are angered and annoyed by other's (hard earned) "wealth" should stop moaning and get up off their backside and earn their own.

That is why a flat tax rate seems fair to me.

 

[Angilion]

Never trust simple solutions to complex problems.

Exactly so.

As soon as I read this proposal, I knew the thread would be full of the usual declarations by the more extremist capitalists here that making rich people richer benefits everyone (somehow) and that anyone who isn't rich is poor because they're stupid and lazy and they deserve to be poor, etc, etc.

Nothing new about that, but the combination of this simple "solution" and the faith that making rich people richer magically makes everyone better off immediately reminded me of the "get rich quick!" spam you can find all over the net.

This is the "Unemployed mother makes £1479 a week working 2 hours a week on the internet!" of tax proposals.

 

[Merlin5]

Haven't read the whole thread, but the important part of the proposal for most people seems to consist of increasing tax to 30% for those not already in higher tax thresholds, but offsetting that increase by abolishing NI and raising personal allowance. But how will people be looked after since NI is what pays for the NHS and government pensions? Would this be a way of government saying, ok you can save money now, but you'll have to start your own private pension and private medical insurance?

 

[Destination]

lol, but seriously, this kind of tax system just makes the poor poorer and the rich richer.

Define the poor
State who you mean, what do they do, where do they live, do they have jobs? Do they have affordable amount of children?
Please define.

 

[Destination]

Haven't read the whole thread, but the important part of the proposal for most people seems to consist of increasing tax to 30% for those not already in higher tax thresholds, but offsetting that increase by abolishing NI and raising personal allowance. But how will people be looked after since NI is what pays for the NHS and government pensions? Would this be a way of government saying, ok you can save money now, but you'll have to start your own private pension and private medical insurance?

Ni doesn't cover govt pensions and health, it hasn't since labour starting soending money they didnt have in the middle of a boom,

 

[Destination]

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?

Amazon is a bit of a bad example seeing as they pay no tax in the UK due to being based in Luxemborg, so the more consumers spend with amazon the more money leaves our economy and the complete waste of time it was dropping tax to get people to spend.
Whoopsy doopsy, you've sent all out tax money abroad.

 

[Alex_6n2]

I am all for this.

Excellent idea.

 

[Dolph]

Haven't read the whole thread, but the important part of the proposal for most people seems to consist of increasing tax to 30% for those not already in higher tax thresholds, but offsetting that increase by abolishing NI and raising personal allowance. But how will people be looked after since NI is what pays for the NHS and government pensions? Would this be a way of government saying, ok you can save money now, but you'll have to start your own private pension and private medical insurance?

Ni doesn't cover govt pensions and health, it hasn't since labour starting soending money they didnt have in the middle of a boom,

NI hasn't been used in that way since the Welfare state was introduced in 1948, when the link between service provision and NI funding was broken as part of the introduction of the welfare state. The NI fund is technically ringfenced, however as NI doesn't even bring in enough to fund the NHS, let alone the rest of it. The idea that NI is anything other than a simple tax is essentially a lie these days.

 

[estebanrey]

I fail to see how you can consider most (not all) high earners to be benefiting from unfair distribution of wealth. Have you thought about how hard they work to accumulate that wealth? Or how many years they spent training/studying in order to be qualified to do so?

I think you've mis-understood. I'm not advocating communism here, I'm questioning the disparity between the current rates of pay between the top and the bottom. That doesn't mean I want a system where everyone gets the same regardless of input/effort and invention.

Look at most corporate pay structures and see how quickly the percentage rise over the level below someone rockets the further up the hierarchy you go. At the bottom the supervisor may earn 30% more than his subordinates but at the other end a director can be earning 4 or 5 times the amount of a manager below them.

I personally am not a high earner (far from it ) but my Dad is, now when I was a kid I would see my Dad between the hours of 8pm until I went to bed (and obviously weekends). He would get up at 5.30 am, leave for work at 7.00am and return home at 20.00. He worked hard all day and often without a break, and he earned a very good wage.

So did my dad, when I was a kid I hardly saw him because in the day in worked in a factory and drove taxis at night. He's wasn't a 'high earner' but he was still putting the hours in. But the amount ytou are paid unfortunately isn't directly linked to the hours you're prepared to put in.

Now does it seem fair to you that there is an inordinate amount of people in this country that deem it unfair that he should make said good wage considering they work far fewer hours, in a much less skilled position and are probably under far less stress?

As I keep saying, I have no problem with meritocracy....but my point is we don't have one. If we had a system whereby person A worked twice as hard as person B and earned twice as much as a result I would no problem with that at all, but that's not really how it works. If it did work that way, phrases like "It's not what you know, it's who you know" wouldn't exist.

 

[chriscubed]

Inheritance tax must NOT be abolished. I'll explain why.
snip

Completely agree.

I fail to see how you can consider most (not all) high earners to be benefiting from unfair distribution of wealth. Have you thought about how hard they work to accumulate that wealth? Or how many years they spent training/studying in order to be qualified to do so?

It depends on what you mean by "high earners". People who are scraping their way through the higher rate tax bracket are not high earners. The banker bashing trend refers to amongst others, CEO types earning hundreds more than the workers it employs in this country.

Certainly hard work, training/studying and the stress put upon people to do the jobs that they do should be a factor in determining pay, but I think your real "failure to see" is that they don't work hundreds of times harder than people on a low wage. Would you not find it stressful to be a young parent with no real chance of improving your wage?

A real factor determining pay should be an incentive to train and work harder, but things have got so stretched out and disproportionate, that it's not surprising that people on low wages are upset.

 

[Glaucus]

Exactly so.

As soon as I read this proposal, I knew the thread would be full of the usual declarations by the more extremist capitalists here that making rich people richer benefits everyone (somehow) and that anyone who isn't rich is poor because they're stupid and lazy and they deserve to be poor, etc, etc.

Nothing new about that, but the combination of this simple "solution" and the faith that making rich people richer magically makes everyone better off immediately reminded me of the "get rich quick!" spam you can find all over the net.

This is the "Unemployed mother makes £1479 a week working 2 hours a week on the internet!" of tax proposals.

How would such a system make the rich richer? 30% of 10million is massively more than 40% of 1million.

It just isn't a complex problem. Tax on all income in the simplist most efficient way you can.

 

[SpeedFreak]

That's about where I stand on it. I think it's a great idea.

Now if we can just get VED rolled into the price of fuel then that'll be another step towards better taxation as well.

This is by far the easiest way to save this country a fortune in admin.

 

[scorza]

How would such a system make the rich richer? 30% of 10million is massively more than 40% of 1million.

It just isn't a complex problem. Tax on all income in the simplist most efficient way you can.

How would it not? 30% is less than 45%. You're making a big assertion that reducing the tax rate by that much would result in a 10x increase in declared earnings which there simply isn't the evidence for.

 

[Glaucus]

How would it not? 30% is less than 45%. You're making a big assertion that reducing the tax rate by that much would result in a 10x increase in declared earnings which there simply isn't the evidence for.

It would have to be disclosed as such the proposal includes other revenue streams. You would be taxed on any "profit you made" rather than a couple of revenue streams you have to include and loads you can legally avoid.

 

[elmarko]

Inheritance tax must NOT be abolished. I'll explain why.

If I have 500mil in property and equities and leave it to my son, it will be of such an amount that it will naturally gather more wealth. Unless he was a bag of spanners then he'd be hard pushed to spend more than it earned. He'd be a trust funder. No matter how much of a coke headed party boy he was, he couldn't burn it all - in all likelihood I'd set it up so that it provided him an income, so he'd find it almost impossible to burn it all.

Once wealth reaches a certain point it has such a gravitational pull on other wealth that it breaks the system.

We are not at that point now. We used to be. The feudal system was exactly that point. 100% of the wealth in the country was owned by the Lords. The poor people were serfs. The UK got rid of serfdom long before other countries so we don't have the same historic resentment against it, but that is where we will go back to once all the wealth has accumulated to the rich - we are clearly headed in that direction. Capitalism broke the mould there. Professionals, entrepreneurship and industrialists cut into the business of the aristocrats and the scales tipped, and wealth scattered. We now, unlike any other point in the entire history of civilisation live in great times. There is not the few commanding the many, relatively speaking.

Inheritance tax is the great leveller, it is what will ensure nobody can gather wealth to the point where it gains mavity - and if they do it won't last down generations.

There are two kinds of people we get most tax from - the rich and the high earners. The high earners are often rich, but the two terms are not mutually inclusive.

We need to raise revenue one way or another. We should be raising revenue less on income tax - because that discourages people from creating wealth. Wealth creation must be encouraged, and not penalised. However we solve inequality and raise revenues if we have significant inheritance tax - and legislation to close loopholes.

A post of yours I actually agree with

 

[Castiel]

I haven't read the thread as yet, but I bet Dolph is creaming his pants at the thought of a single tax rate.....

 

[Kemik]

1. Abolishment of NI, increase personal allowance and increase to a flat rate of 30% tax.

Well, at the moment anyone earning about £8,000 or more will be paying 20% income tax plus 12% NI class 1. That's 32%. +1 to the idea.

However, in order for this to work you'd need to also implement the dividend, rent and savings tax at 30% in order to allow for the removal of NI Class 4 (minimum number of years required for the full state pension). This removes the incentive to invest. Dividends at the moment incur a much lower, usually nil tax.

I'm actually in favour of this though. There would still need to be a contribution element from employers for NI but a flat rate removes the incentive to avoid tax. Increasing the PA to £10k moves a huge proportion out of the tax net (great for low earners) and incentives people to move to the UK bringing their corporations and jobs with them.

2. Removal of corporation tax.

Wouldn't work. So many reasons but this is just silly politically. There must be a tax on corporations or people will move their corporates to the UK and then extract funds elsewhere and bring that back into the UK another way. Nil of tax.

3. Abolish Inheritance tax and stamp duties.

Unfortunately capital taxes in this form is required. The 0.5% on shares, land stamp duty and IHT bring in too much to scrap. I can see peoples' arguments against the taxes but they're here to stay.

Local authorities to set a local sales tax.

Awful idea. I'm set against 3 independent rates across Britain (England, Scotland, Wales), never mind local counties! No one would know how much the sales tax is. They like seeing prices with tax included. Admin would be hell. Just no.

 

[MarkST]

I don't like that idea. That would mean I take home £148 a month less, which pays for shopping and petrol.