Care to post the graph showing the proportion of income and wealth controlled by those groups? The top 1% benefit completely disproportionality to their contribution.
Government Benifit Cap
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Care to post the graph showing the proportion of income and wealth controlled by those groups? The top 1% benefit completely disproportionality to their contribution.
But still dropping it to a point where it is 5% higher than before.
It is misleading to suggest that everyone paying higher rate tax is in a position to shift income around to the extent you suggest. Especially when the alternative income methods, normally dividends, result in a lower overall tax rate than 40% anyway.
Soldato
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I don't agree with this at all, I think it went the other way and was a further driving force in disparity of wages. People in positions to pay the top rate of tax also have a lot of clout over their wages. I suspect many of them demanded rises to compensate for the extra tax so salary budgets were slanted even more toward to the top earners to cushion their tax change whilst freezing wages at the bottom to pay for it.
Your theory doesn't really work mathematically. You only pay the rate on the amount OVER the threshold, not on the whole amount so taking a wage drop would always result in less money.
I think the tags come from clicking out of the edit window on my phablet, I'll try and avoid it
Apologies for the error, I was working from memory and used OECD figures which included central and local government spending rather than just central government, which gives 49% for 2012, and has peaked at over 50% prior ((Source 1,Source 2). Yes, I know it's the Torygraph, but the guardian has already been referenced if we want to get into an impartiality discussion.
Fundamentally though, the issue of our broken benefits system isn't just about sustainability. We've fallen very deeply into the trap that Beveridge warned about when setting up the system, and that is something that needs to be addressed. That does mean correcting the problems with the system whereby some sections of society can not only not contribute, but also don't have to accept any responsibility for the consequences of their choices. I don't get a rise if I have kids, I have to budget for it, likewise I don't get a bigger house just because my family gets bigger, nor do I get to live where I want regardless of cost. All these things have to be dealt with, and yes, that will suck for the people who have got used to it, and it will also suck for the employers who have taken advantage of it to provide low wages in high value areas with the taxpayer picking up the rest of the bill, but that doesn't change the need for fundamental reform.
Yup, Nu Labour failed to deal with overly low high tax rates during their time in power, no doubt.
I never said everyone could; I said that the difference in take is largely explained by it.
Soldato
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But it isn't because your theory doesn't hold water mathematically. Deliberately lowering your wages will always lower your income because you only pay the higher rates on the amount over the threshold and not the whole amount.
There's no justification at all for stepped tax rates, they are fundamentally unfair and a continuation of the idea that group a can get group b to pay for things rather than both groups contributing.
I think the tags come from clicking out of the edit window on my phablet, I'll try and avoid it
God love technology. I was wondering how it happened.
Accepted.
While I don't accept "broken" I do accept that there are real problems with the system. However, if we look at the evidence from around the world, what we find is that punitive methods have a very poor track record of success. If you want to get more people into work, you're better off funding schemes that support the employment of the long term unemployed than giving them to companies for free; and you're better off spending money on that than you are pushing children into poverty and picking up the costs of delinquency later.
The cost of welfare has gone up, but mostly only in housing benefit, and that has risen primarily because there isn't enough affordable housing. Worrying about the benefit bill is worrying about a symptom not a cause.
No, that's wrong. When I was self-employed I could choose either to take income or leave money in the company. In the company it just sits there attracting no tax. Move it forward into year X, and I pay year X's tax rate; move it back to year Y and I pay year Y's tax rate. My fundamental income remains the same; it's just a matter of whether it's sitting in my account or my company's account.
Punitive systems include increasing the rate of tax according to the level of income.
Stepped tax rates are a recognition of the fact that the rich benefit more from society than the poor.
I would certainly support the abolishment of right to buy and a new social housing build program, however it would have to come with reform to social housing entitlement where it no longer is for life, and probably on a standard size/design allocated to all tenants (so no more changing entitlement based on choices made).
Part of the issue with the current setup is that we heavily subsidise low wages, while also trapping people on those same low wages, especially in areas with high cost of living. A great many people in london can't afford to improve themselves because they would lose the support that enables them to live in London in the first place, the same with many working people who have to manage their income to ensure the tax credits and housing benefit continue and therefore again can't improve their position because they can't get over the 'hump' that exists currently, and I'm not convinced universal credit goes far enough to address that.
Soldato
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Fine for self employed people but what about the other 99% of people on £150 that aren't like bankers, multi-national company board members etc, and isn't the money subject to corporation tax given if you don't take it as wages it becomes taxable profit.
That's nonsense for most though, who have income needs outside of their work. It isn't just straightforward to have no income for a year and wait for the next tax year. And, it isn't that easy to simply move earnings from one year to another.
Sorry, I thought it was obvious from context but I was referring to methods of getting the unemployed into work in that quote.
Also, higher tax rates on those benefiting more are not "punitive".
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But the poor are entitled to more benifit.
No, stepped tax rates are the result of a system that allows a majority to vote to take more of someone else's property than they are willing to have taken themselves, nothing more. For some reason, even though the right to property is included in the declaration of human rights, it comes with a caveat that exempts the government from worrying about it, which renders the whole thing meaningless.
No, it is punitive as you said, and proven to be ineffective.
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Good idea, but £350 a week is too high if that's "£350 take home", as some suggest?
Surely it would be better to have single earners on £250 and couples on £500? Or am I missing the point? Do the gov want everyone to stay single?
Your bills aren't half for a single person though are they?
Soldato
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I disagree, I do see progressive tax as a counter-balance to lopsided salary calculations between the top and the bottom.
Does anyone, by any measure really think that Bob Diamond for example is worth 1,000 times the wage of one of his cashiers? Don't get me wrong, I agree with the principle of capitalism, those that work the hardest/have the best ideas/skills get more money than those that don't.
Having said, I don't think it always works because those at the top have a lot more power to influence pay rises in their favour and I believe they use that to demand wages that both cover their increased tax give and provide them with the disposable income they are used to. The 50% rate for example, I believe the rich just paid themselves more/demanded more to cover the increase.
Hence why I would introduce personal tax codes, every person's would be unique to them and your income tax would be based on your employers generosity or greed. So if you work for a company that pays minimum wage whilst lavishing it's bosses with multi-million pound packages and you are at the bottom you'd pay no tax, your bosses would pay 70% However if your company pays say the boss no more than 50 times the average salary of his lowest level workers they would all get a flat rate.