British public wrongly believe rich pay most in tax

The Dread Pirate · 16 Jun 2014 at 14:32

So far as I Know there are less rich than poor and the amount they pay while higher is not a larger proportion of their income than it is for those who aren't hence proportionally they pay less and as a percentage of the population pay less.

However the more we do tax them the less inclined they'd be to stay here and with the money they have they could easily move elsewhere and thus avoid our tax laws altogether it's not a simple matter of they get paid more so they should pay a bigger percentage.

We need to keep them here otherwise they'll pay nothing hence the tax laws are the way they are I'm not saying it's fair or right but to quote Cutler Beckett form Pirates of the Caribbean It's just good business!

elmarko · 16 Jun 2014 at 14:39

The Dread Pirate said:
However the more we do tax them the less inclined they'd be to stay here and with the money they have they could easily move elsewhere and thus avoid our tax laws altogether it's not a simple matter of they get paid more so they should pay a bigger percentage.

I'd like to see some evidence this would be the case.

http://en.wikipedia.org/wiki/List_of_countries_by_tax_rates

Plenty of nations have a higher top income tax rate & are doing well economically.

balky12 · 16 Jun 2014 at 14:44

elmarko said:
National insurance, council tax & VAT make a huge difference if you are at the lower end of the income scale & spend 100% of your income on living (not earning enough to save a notable proportion of income).

I'm not sure why this is surprising.

No I understand this. But when I was bouncing around figures earlier...

In the lowest 10% of earners the average wage is £11k. You pay £565 income and NI. Say £2k on council tax. 23% thus far with £8434 to spend on what you like. Say you used all that on items with 20% VAT. That's £1,687 more towards taxation. In total you have been taxed 565+2000+1,687= £4252. 38% total wage has gone on tax.

Someone on £120k pays £47,258 tax and NI. That's already 39% without his spendings on council tax or VAT.

The Dread Pirate · 16 Jun 2014 at 14:45

elmarko said:
I'd like to see some evidence this would be the case.

http://en.wikipedia.org/wiki/List_of_countries_by_tax_rates

Plenty of nations have a higher top income tax rate & are doing well economically.

Their Laws on immigration and tax aren't as lax as ours though and you'll find that those who move away are still having to pay tax in their home countries.

Glaucus · 16 Jun 2014 at 14:46

Damn statistics, rich do pay far more tax. Can we have amount rather than percent please.

Poor will always pay more as they spend 100% of income, where rich will save a fair chunk.
Without the rich saving the economy would suck as well, so you don't want to tax savings highly.

daz · 16 Jun 2014 at 14:46

hurfdurf said:

Who is arguing against taxation funding things like roads, education and the police?

Westyfield2 · 16 Jun 2014 at 14:52

[TW]Fox;26463441 said:
Lets look at this again in terms of actual £ paid in tax. Mind you that wouldn't fit your agenda, would it Scorza?

Boom.

alx said:
This a rather interesting article: http://www.bbc.co.uk/news/business-17397199

Nice little graphic - top is the percentile groups by salary, bottom is how much income tax they contribute.

Headshot.

Akagi · 16 Jun 2014 at 14:54

Well... They do pay the most in tax. It just happens to be a lower percentage of their overall income.

elmarko · 16 Jun 2014 at 14:56

Westyfield2 said:
Boom.

Headshot.

I find it amusing that people think they have found a golden bullet argument against the article when in reality it shows they missed the entire point.

There is a reason the percentage is important (as it's indicative of the regressive nature of a tax system in a society with hugely imbalanced incomes).

Arguing that the rich pay more as a total is a red herring & not addressing the actual point.

Acme said:
Well... They do pay the most in tax. It just happens to be a lower percentage of their overall income.

Which is in the first line of the article, nobody said that as a total - it's how that total is made & where the lines are drawn which usually determine if the tax system is regressive or progressive.

Tunney · 16 Jun 2014 at 14:59

robgmun said:
This whole thread stinks to be honest. It just drives the misconception from the left that somehow if you're successful in life then you must a greedy ******* that got there by being evil. Taxing success and people who save all there life is crap thing to do in this country, thank god that we don't live a socialist regime

And the right have the misconception that an individual's success exists within a vacuum. Not to mention the fallacy that hard work alone is what makes someone successful.

Akagi · 16 Jun 2014 at 15:12

elmarko said:
Which is in the first line of the article, nobody said that as a total - it's how that total is made & where the lines are drawn which usually determine if the tax system is regressive or progressive.

Yeah I know, sorry. Was just highlighting that the thread title could be misleading. I did read the article before posting, but I for one saw the title and thought "well... they do pay the most tax?" and that is the reason I clicked on the thread.

D.P. · 16 Jun 2014 at 15:12

PMKeates said:
I haven't read the article in detail, but I wonder if they include state-provided benefits as 'income' for the bottom 10%, and then things like council tax as 'expenditure' (even if effectively free).

They don't, if you actually include benefits as a form of negative income tax then you actually find that overall the bottom 10% have a very negative tax rate. This is natural, they are on average a negative asset, costing more than they contribute. This has bad connotations, it shouldn't , it just means when consider the total running costs of the country and the total income, the poorest people are a net drain. Health insurance, primary, secondary and higher education, police, fire, transportation, security, benefits, etc all have a big cost that isn't covered by the taxes poor people pay in (because they don't have a high income to pay more taxes on!).

D.P. · 16 Jun 2014 at 15:20

elmarko said:
National insurance, council tax & VAT make a huge difference if you are at the lower end of the income scale & spend 100% of your income on living (not earning enough to save a notable proportion of income).

I'm not sure why this is surprising.

If you are in the bottom 10% that that article is going on about you pay extremely little IT or NI, a far smaller percentage than higher income owners.

For someone on 12K a year then NI and IT equates to 7.4% gross salary.
Someone on 120K a year will pay 39.4% of their gross in NI and IT.

Its things like council tax that make swing the % drastically for the lowest income earners. Everyone in this thread has pretty much agreed that the current council tax is highly regressive and needs reforming.

alx · 16 Jun 2014 at 15:20

D.P. said:
They don't, if you actually include benefits as a form of negative income tax then you actually find that overall the bottom 10% have a very negative tax rate. This is natural, they are on average a negative asset, costing more than they contribute. This has bad connotations, it shouldn't , it just means when consider the total running costs of the country and the total income, the poorest people are a net drain. Health insurance, primary, secondary and higher education, police, fire, transportation, security, benefits, etc all have a big cost that isn't covered by the taxes poor people pay in (because they don't have a high income to pay more taxes on!).

Exactly, Seft alluded to this in post #45.

D.P. · 16 Jun 2014 at 15:31

alx said:
Exactly, Seft alluded to this in post #45.

And before anyone gets the wrong idea about my position, the fact that the poor are a net drain financially is more an indication of income inequality and minimum salaries being too low to be taxed at levels that would equalize the balance.

Xordium · 16 Jun 2014 at 15:56

D.P. said:
the poorest people are a net drain.

This is such a retarded argument because it assumes everything occurs in isolation and that the only contribution one could make would be through taxation.

Westyfield2 · 16 Jun 2014 at 16:07

elmarko said:
I find it amusing that people think they have found a golden bullet argument against the article when in reality it shows they missed the entire point.

There is a reason the percentage is important (as it's indicative of the regressive nature of a tax system in a society with hugely imbalanced incomes).

Arguing that the rich pay more as a total is a red herring & not addressing the actual point.

Then what about a flat tax? Personal allowance of, say, £15K, and a flat tax percentage of, say, 30% of everything on top of that for everyone.

Tunney · 16 Jun 2014 at 16:14

Westyfield2 said:
Then what about a flat tax? Personal allowance of, say, £15K, and a flat tax percentage of, say, 30% of everything on top of that for everyone.

A flat tax would help those at the very bottom. However, it would squeeze the middle whilst giving a tax cut to those that need it least - the very rich.

Even UKIP have back-tracked from their earlier promise to introduce flat income tax.

CREATIVE!11 · 16 Jun 2014 at 16:18

TL DR democracy doesn't work because people are morons.

"so you voted UKIP, what is it about their policies that attracted you?"

"DEM MOSKS!"

and i'm not referring to chavs on benefits here... I'm referring to ordinary working people too.

balky12 · 16 Jun 2014 at 16:21

CREATIVE!11 said:
TL DR democracy doesn't work because people are morons.

"so you voted UKIP, what is it about their policies that attracted you?"

"DEM MOSKS!"

and i'm not referring to chavs on benefits here... I'm referring to ordinary working people too.

I'm impressed. Went from talking about tax, to the poor rich divide, to how to perhaps improve it, to UKIP and 'MOSKS' along with democracy. Did I miss something?