Tax.... what is everyone’s problem with it?

They are huge cuts.

The bit I don't understand is that the economy has recovered since the last recession when the cuts were required (assuming we take the government at face value). In fact, tax receipts have increased significantly

2007-08 £456,121m
2008-09 £445,531m
2009-10 £414,920m
2010-11 £453,957m
[...]
2016-17 £467,716m
2017-18 £591,648m
2018-19 £619,367m

That's a bloody big increase. So where the hell is all that money going!?

Are we to believe that the last labour government left the finances in such a poor state, we're still paying for what they did? If so, I'd hate to think what Corbyn's spending plans would do! Or are the Conservatives spending revenues in all the wrong places or infrastructure projects? Or are the cuts lower than we're led to believe and it's the organisations themselves that are spending in the wrong ways?
 
One of my issues at least with a tax rate of 40% is that any kind of small bonus/raise tends to be effectively meaningless by the time you actually consider the monthly improvement. If I got a raise of £1,000 for instance, that sounds great until you factor in that you'd only get £600 of that, and on a monthly basis, that's £50 extra, which is less than you'd expect for such a raise. This isn't counting any extra deductions on top of that (some voluntary such as pension, some not such as NI). I know it's marginal etc., but if I work 'x' harder, only to get a tiny effective increase, then makes me question the point of working that 'x' harder. This applies less to me personally because that raise isn't why I'm working harder and I'm more after a promotion, but I can easily see that argument for a lot of people. Goes to Dowie's point earlier about incentives.
 
A major issue that many have with tax at "perceived" high income is that it then stacks on top of other taxes that also ratchet up quickly, and of course there is no mechanism in income tax to adjust for cost of living variances across the country which makes it far from equitable.

Someone earning 80k in Burnley, where you can buy a three bed house in cash (with no SDLT if FTB) with your year's take home, pays the same amount of income tax as someone who lives in zone 1 or 2 London on the same salary, who needs 20x that plus a huge SDLT bill. 80k in Burnley is objectively a high income, 80k in Zone 1 or 2 is definitely not.

Considering SDLT more, as one of these stacking taxes, with a more real-world breakdown. First time buyer in say Plymouth could can comfortably get a 4 bedroom detached with a double garage for 375k and pay £3,750 in SDLT. In Zone 2, a "normal" 2 bedroom apartment that sells for £750,000 would attract £27,500 in SDLT for a first time buyer. Nearly 7.5x as much tax for something only twice the price. So even if that person earns double (let's say 50k and 100k), under the Corbyn proposed tax regime, in the year that the property is purchased the person on 100k would have paid 28.5k in income tax and 27.5k in SDLT, and the person on 50k would've paid 7.5k in income tax and 3.5k in sdlt. 56k vs 11k. More than 5x the amount of tax for earning double, and getting a much smaller property. Is that REALLY equitable?

People will just say "well don't live in London then". In which case they earn less for the same thing. Which means they then pay WAY less tax, which doesn't work for the socialist agenda....
 
rG-tom said:
Someone earning 80k in Burnley, where you can buy a three bed house in cash (with no SDLT if FTB) with your year's take home, pays the same amount of income tax as someone who lives in zone 1 or 2 London on the same salary, who needs 20x that plus a huge SDLT bill. 80k in Burnley is objectively a high income, 80k in Zone 1 or 2 is definitely not.
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Pedantic mode

Technically an £80k house would have no SDLT for anyone, not just FTB's as it's under the threshold (except the 3% on second property)

/Pedantic mode
 
Marvt74 said:
Pedantic mode

Technically an £80k house would have no SDLT for anyone, not just FTB's as it's under the threshold (except the 3% or second property)

/Pedantic mode
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I couldn't remember what the rules at the very bottom end were, but this supports my point even more :D
 
Oh and look i don't live *that* far from Burnley so everything is cheap. So you could say i'm winning (apart from being near Burnley...)
 
Given your pedantism, I should have called you out for your use of an apostrophe when you were attempting to pluralise "FTB's" ;)
 
rG-tom said:
Given your pedantism, I should have called you out for your use of an apostrophe when you were attempting to pluralise "FTB's" ;)
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Actually, it's grammatically acceptable to use an apostrophe when pluralising an acronym to differential the pluralisation from the acronym itself. :p
 
dowie said:
You'd be earning less if you're paying more tax as a result of a tax hike, which is what was being referred to.

There isn't necessarily a direct benefit and there are some drawbacks or disincentives that come into play too. Not to mention perhaps those tax payers lower down the scale should share the burden of any increase to income tax.

I'm not opposed, in principle, to paying a bit more. I am opposed to the idea that it is just fine to whack it all on the top end when you want to increase income tax. I'm also, just out of personal opinion, opposed to going beyond a 50% marginal rate at any level... once it gets to the point where they're taking the majority of what you earned after a certain level (or in this case between certain levels) then that just doesn't strike me as fair at all.

If you earned an extra 20k annual bonus but only get to keep 8k of it then that seems excessive to me... doesn't affect say the investment banker earning a 500k bonus much...they can keep the majority of their bonus as the marginal rate drops right back down after 125k but it's right at the sweet spot where it targets some very productive workers and makes their performance or overtime incentives much less effective.
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all I would have to say to such people is. they need to step outside of the bubble they live in. I mean a £20K bonus? You do know a lot of people earn less than £20K a year?

How much do you think a full time sales assistant in say H&M earns for instance?

So what if it's being taxed so much they only ever see £8K. It's still £8K more than not getting the bonus.
 
I don't think a 20k bonus is particularly unexpected. Especially in Sales or down in London

But as Dowie says, if you need to really work your ass off to earn your bonus and it turns out you only get 40% of it then it's easy to see people getting disincentivised.
 
Marvt74 said:
I don't think a 20k bonus is particularly unexpected. Especially in Sales or down in London

But as Dowie says, if you need to really work your ass off to earn your bonus and it turns out you only get 40% of it then it's easy to see people getting disincentivised.
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For the majority of the population, a 20k bonus is a pipe dream.
 
VincentHanna said:
For the majority of the population, a 20k bonus is a pipe dream.
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We're not talking about the majority of the population though, it was specifically addressing the people on around 100k who may get a 20k bonus and be taxed at 60% on that bonus.

If you use that argument, there's no point discussing minimum wage either as the majority of the population don't earn that.
 
Jez said:
Without wading through this in massive detail, my big issue with income tax is that my marginal rate is so much higher than somebody with a lower income to me. Also, by nature i rely on fewer public services than average and therefore my perception is that i get terrible "value".

A flat rate system would result in me paying much more tax than a lot of people, but at least it would seem fair.
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So you think someone earning £15K a year should pay 40% on everything too?

How would they be able to buy anything?

You have to realise the reason why you are able to earn so much is on the backs of those under you. I mean take R Kelly as an example. Let's say he earns £20 million off an album. Do you think he is smarter and works harder than you do? He's a kiddy fiddler also to boot.

How about we just pay everyone the same hourly wage then also if we are going to tax everyone the same? Regardless of the job. Work is work after all.
 
Psycho Sonny said:
So you think someone earning £15K a year should pay 40% on everything too?
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Presumably by having everyone on the same tax bracket you could set it lower than 40% but have the Personal Allowance around the £20k mark. That's easily enough for people to live on and then tax everyone at 30% beyond that.
 
Seearbe said:
I don't think anyone in this thread has said anything about not wanting to pay tax. Just that it isn't right to increase tax rates from where they currently stand. Nobody has suggested they should be reduced.

Interesting that you point out the thing about taxes being used to pay for things that won't work commercially. That's correct, but I'm really confused why labour would want to ban private schools. I mean you're literally shifting the burden of cost away from the wealthy and to the taxpayer.
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Is it not due to teacher shortages?

I mean private schools have far more teachers per number of pupils because they pay them more. By removing them you will have more teachers to go around.

Also the wealthy are already paying for schooling (the burden won't shift to the taxpayer, it's already paid for by them) they will simply hire tutors on top instead the cost of running schools won't go up it will simply mean a more even field. As in those that can't afford to go to private school now have a more fairer chance of a crack at the whip. However I feel this won't happen. What will happen is affluent people tend to live in affluent areas. So the schools in affluent areas will end up through fundraising or some such other scheme allow those that "donated" to get first pick when it comes to their children getting in. They will then get better schooling than others in poorer areas.
 
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