Axe personal allowance and pay everyone £48 a week, says thinktank

[muon]

what I would like to see sorted is the situation that screws me and the wife over

we both work full time but I earn 3x what she does

why is it right that we pay lots more tax than another couple on the same total but a 50/50 split of income?

Because you aren't taxed as a couple.

A balancing like you are suggesting means there is a massive tax break from simply being married. I would be very strongly against that.

Take the extreme (although not uncommon) example of a single earner, and a single earner who is married where the partner earns nothing or very little.

 

[Stumble Bum]

what I would like to see sorted is the situation that screws me and the wife over

we both work full time but I earn 3x what she does

why is it right that we pay lots more tax than another couple on the same total but a 50/50 split of income?

That can't be a serious question surely....

 

[Ayahuasca]

That can't be a serious question surely....

Just goes to show you don’t need to be intelligent to earn lots of dough

 

[chroniclard]

Well, we are going to have to raise taxes somehow to pay for Brexit and crumbling infrastructure. I am all for it if it actrually raises taxes and helps people out in a better way.

 

[Bigpops]

Only 13% of adults earn over £37.5k?

You sound surprised? I'm amazed it's even 13% and not under 10%.

I know precisely two people who earn over £37.5K (they're also the same two people who earn more than the national average), and one of them lives in the USA, so I don't think that counts.

 

[Deleted member 66701]

Just goes to show you don’t need to be intelligent to earn lots of dough

He just said he earns 3x what his wife does, not that he earns a lot - prob just 3x min wage

You sound surprised? I'm amazed it's even 13% and not under 10%.

I know precisely two people who earn over £37.5K (they're also the same two people who earn more than the national average), and one of them lives in the USA, so I don't think that counts.

You really need to expand your circle of friends - I know very few people that earn LESS than 37.5k

 

[TallPaul_S]

It makes no sense - you tax people on the first £12,500 which is currently tax free - that's £2500 extra in tax for everyone. You then give them back that £2500 in the form of the 'weekly national allowance'

Am I missing something?

You earn £12500 per year, you currently pay zero tax. Net income £12,500. Under the new scheme you'd pay £2500 tax and then get an extra £2500 from the government. Net income £12,500 (ignoring NI in all these).
You earn £20k, pay £1500 pay tax. Net income £18,500. New scheme, £4000 tax plus the £2500 back. Net Income £18,500.

I don't see how this helps a lot of low earners, the only people who would benefit are those earning less than £12500, the minimum wage is almost that. Granted it would help a fair few, but I'd hope in this and age there's few people (apart from part timers) who are on less than £12500 a year!

 

[Rotty]

He just said he earns 3x what his wife does, not that he earns a lot - prob just 3x min wage

my wife is a care assistant so you aren't far off

 

[Resident]

It makes no sense - you tax people on the first £12,500 which is currently tax free - that's £2500 extra in tax for everyone. You then give them back that £2500 in the form of the 'weekly national allowance'

Am I missing something?

You earn £12500 per year, you currently pay zero tax. Net income £12,500. Under the new scheme you'd pay £2500 tax and then get an extra £2500 from the government. Net income £12,500 (ignoring NI in all these).
You earn £20k, pay £1500 pay tax. Net income £18,500. New scheme, £4000 tax plus the £2500 back. Net Income £18,500.

I don't see how this helps a lot of low earners, the only people who would benefit are those earning less than £12500, the minimum wage is almost that. Granted it would help a fair few, but I'd hope in this and age there's few people (apart from part timers) who are on less than £12500 a year!

The main benefactors would be the unemployed "dole dossers". An extra £50 quid a week for nothing & not affecting their benefits.

If you believe the current stats (I do not, I believe they're lies and unemployment is far higher) and excluding the extra cash the employed would be better off, the government would need to find an extra 6.6 billion per year for this.

We've just had 10 years of austerity to reduce national deficit which is just back to pre-financial crisis levels & this thinktank (seems the lights are on but no-one is home) wants to add 6.6billion at least each year too it, making the last 10 years for nothing.

 

[chroniclard]

The main benefactors would be the unemployed "dole dossers". An extra £50 quid a week for nothing & not affecting their benefits.

If you believe the current stats (I do not, I believe they're lies and unemployment is far higher) and excluding the extra cash the employed would be better off, the government would need to find an extra 6.6 billion per year for this.

We've just had 10 years of austerity to reduce national deficit which is just back to pre-financial crisis levels & this thinktank (seems the lights are on but no-one is home) wants to add 6.6billion at least each year too it, making the last 10 years for nothing.

Brexit has made the last ten years for nothing already.

 

[Buffman]

People who earn over 37.5k shouldn't pay more tax. It's not a significant amount of pay, particularly unless you're living in cheap areas.

 

[SPG]

Its a good idea, the current system favours Tory voters using a system that is creaking at the seems.

Times need to change it`s quite simple. The rich have been getting richer and the poor slowly sinking even more.

 

[h4rm0ny]

Thank god, this will never happen.

LABOUR - spending money from the money tree.

I've never really gotten over the results of this survey.

Even now it reflects a mindset I have trouble understanding.

As regards this proposal, the article perpetuates the strange mindset that a tax cut equally applied is somehow giving money to the better off rather than - more accurately described - taking less. For example:

The weekly payments would be fully funded by the abolition of the tax-free personal allowance, which has seen inflation-busting increases under the Conservatives over the past 10 years, but which NEF said had benefited richer households most.

This seems drastic to me:

The policy is likely to face opposition from some voters, as it would also mean bringing down the threshold for higher-rate taxpayers from £50,000 to £37,500. This is because the starting point for 40% income tax moves with the personal allowance. NEF said this would affect the top 13% of earners in the country.

That's a Hell of a drop. This proposal seems to be to take more from people who are actually earning to more widely distribute to those not employed, given that it's net equal to people employed but below £37,500. We higher bracket earners already pay for other people's benefits a lot. Exactly how many unrelated people are we ethically supposed to be supporting? And perhaps more to the point, will such a proposal actually increase the wealth of the poorer sections of society or not? The history of capitalism suggests it may actually be counter-productive.

 

[Angilion]

But in reality as people have seen, higher rate tax payers have been able to use schemes that mean they pay less than 40% and in some cases less than 20%. A flat rate system would equal out across the board and discourage aggressive avoidance. [..]

How? Richer people who evade/avoid tax aren't doing so because they have to, they're doing so because they want to. Tax cuts for richer people won't change that. It will just reduce the amout of tax paid, which means either taxing poorer people more, taxing businesses more (which wouldn't work because they either have more options for tax evasion/avoidance or they can't afford more tax) or cutting public services.

Yeh the magic of higher rate tax payers avoiding 40% rates isn't true.

Most higher rate payers are on PAYE and work for large companies. Higher rate currently is £46.5k which is pretty normal for jobs in the middle of the corporate ladder.

It's only self employed workers that manage to set avoidance schemes up.

That too.

 

[dowie]

Sounds like a good incentive for the low paid to engage in more cash in hand work where possible (and of course other illegal activities).

Also this sweet spot of just over 100k that all governments seem to be keen on screwing people over at is just a shambles... that's just about at the point where the partner in the local GP practice decides "Oh well, **** doing the Saturday morning clinic or the late night clinic on Tuesdays for people who work and can't get time off". Especially so if they're getting a big hit thanks to their pension too.

 

[chaparral]

Doesn't it just mean that people who aren't in work get free money and everyone else is roughly the same?

That kind of what I was thinking..

Lots of lazy people that no want to work get £48 extra per week while us middle earners pay extra for them

 

[Thecaferacer]

How? Richer people who evade/avoid tax aren't doing so because they have to, they're doing so because they want to. Tax cuts for richer people won't change that. It will just reduce the amout of tax paid, which means either taxing poorer people more, taxing businesses more (which wouldn't work because they either have more options for tax evasion/avoidance or they can't afford more tax) or cutting public services.

All the proposals for a flat tax I've seen involve a major overhaul of the system writ large to prevent the loopholes and schemes. With a flat rate it's also psychologically different as a high earner doesn't feel like they're being penalised unfairly.

They also mention overhauling things like VAT etc which is a regressive tax.

 

[Rroff]

while us middle earners pay extra for them

This is the problem with a lot of these ideas - some sound good on paper but in many cases end up one way or another with those who've done OK for themselves through hard work and doing things the right way end up bearing the brunt.

 

[Caracus2k]

I've never really gotten over the results of this survey.

Even now it reflects a mindset I have trouble understanding.

Why stop at 50p in the pound? Hollande tried 75% which was a resounding success if you ignore the millions of higher rate tax payers who left France and the resulting drop in tax revenues.

If only socialist would work out that you can't tax or nationalise your way to prosperity...... (to be fair some do but then they necessarily have to stop being socialists!)

 

[robj20]

That kind of what I was thinking..

Lots of lazy people that no want to work get £48 extra per week while us middle earners pay extra for them

Same, i'm against anything that gives to people that don't work for no reason other than laziness.