doesn't always work that way though - simply increasing tax rates doesn't necessarily increase what the government gets in taxes both through avoidance/evasion and simply people deciding that it isn't worth it
when you're looking at people earning 70k then you're targeting some of the most productive people in our economy - we've already got plenty of people screwed by the 60% rate once they hit 100k. This is the area where you're targeting things like overtime and bonuses - the doctor who decides to work a Saturday clinic for extra pay etc..
the poor don't have much in the way of tax burden - I'm not really sure what that is even in relation to. Sure the NHS could do with more funding but frankly the cuts to benefits are a good thing and perhaps ought to go further still.
Can anyone shed light on why there are tax bands and why the tax system doesn't work on a sliding scale? It seems daft that you pay 10% on a portion, 20% on the next, etc and not the percentages in between. Like in the housing market, it means prices bunch up before going over the threshold. Surely a formulaic approach is more sensible?
Can anyone shed light on why there are tax bands and why the tax system doesn't work on a sliding scale? It seems daft that you pay 10% on a portion, 20% on the next, etc and not the percentages in between. Like in the housing market, it means prices bunch up before going over the threshold. Surely a formulaic approach is more sensible?
Nonsense
Of course the poor end of the pay scale have a burden of tax as it takes a good chunk of their salary just like the higher rate of tax earners I do wonder which planet you accually live on.
The poor typically pay more tax once you take consumption taxes - VAT, principally - into account.what do you even mean by this? We operate a progressive system - plenty of poor people don't even pay income tax
I've read this a few times, particularly the part in bold, and can only conclude you don't understand how income tax currently works - it's nothing like stamp duty land tax. Or I just don't understand you... probably that...Can anyone shed light on why there are tax bands and why the tax system doesn't work on a sliding scale? It seems daft that you pay 10% on a portion, 20% on the next, etc and not the percentages in between. Like in the housing market, it means prices bunch up before going over the threshold. Surely a formulaic approach is more sensible?
The poor typically pay more tax once you take consumption taxes - VAT, principally - into account.
The Liberal Democrats have, once again, claimed that the poor pay more of their income in tax than the rich, and that this gap has got larger under Labour. But, by ignoring the fact that the poor get most of this income from the state in benefit and tax credit payments, and by overstating the extent to which indirect taxes are paid by the poor, this comparison is meaningless at best and misleading at worst.
The underlying figures come from the Office for National Statistics, and are not in dispute. As the Liberal Democrats say, in 2007-08, the poorest fifth of households had a gross annual income of £11,105 on average, and paid £4,302 a year in tax, a ratio of 38.7%. Meanwhile, at the other end of the scale, the richest fifth of households had an average gross annual income of £74,247, and paid £25,926 in tax, on average, a ratio of 34.9%. (See Table 1 of this article).
The first key point to note is that benefits and tax credits account for £6,453 of the £11,105 average gross income of the poorest fifth of households. Their original income - in other words, private income from sources such as earnings, private pensions and investments, but not that from benefits and tax credits - was an average of £4,651. So the poorest fifth of households were clearly net beneficiaries from the tax and benefit system, to the tune of £2,151 a year, on average. At the other end of the scale, the richest fifth of households received £1,666 a year in income from the state, and so they are net contributors to the Government's coffers, to the tune of £24,259 a year, on average.
If we define "net taxes" as "taxes paid less benefits received", then the net tax rate of the poorest fifth is -46% of their original income (or -32% of their after-tax income), with the negative number reflecting that they are net beneficiaries. At the other end, the richest fifth have a net tax rate of +33% of their original income (or +50% of their after-tax income). These figures show what one would expect: the tax and benefit system as a whole takes money from the rich, and gives it to the poor.
Facebook and Twitter feeds are filling up with nonsense on how to "Reverse Brexit" and kick the tories out by voting labour in "these" constituencies.
6 weeks till morons D-day
I've read this a few times, particularly the part in bold, and can only conclude you don't understand how income tax currently works - it's nothing like stamp duty land tax. Or I just don't understand you... probably that...
SDLT is a complete joke. Paying SDLT on VAT.... it's tax on a tax!
I'm not sure why you'd capping it at 150k - people earning over 150k would be affected by this too
these people make up a significant (double digit %) of revenue yet only make up a very small % of the population - tax changes would very likely lead to changes of behaviour to the point where even a 5% change can become meaningless at that level
Can anyone shed light on why there are tax bands and why the tax system doesn't work on a sliding scale? It seems daft that you pay 10% on a portion, 20% on the next, etc and not the percentages in between. Like in the housing market, it means prices bunch up before going over the threshold. Surely a formulaic approach is more sensible?
It largely depends on what McDonnel meant. I assumed he was suggesting bringing the Additional Rate income tax threshold down to £70k.
But that still affects people earning over 150k though!
I hope you're not making the same mistake as the person talking about stamp duty on property purchases earlier - income tax is progressive
If you earn 155k and that threshold moves to 70k then that is you've now got an additional 80k of income exposed to that rate rather than the previous 5k
this effects anyone earning over 70k not just people earning 70-150, the effect might be negligible for people earning say seven figures but they're a tiny number - most people earning over 70k aren't going to be any higher than a low six figure package and for those people it very much will have an impact
You're right. I did have a total "duh" moment. I'm still not sure the difference is all that significant though. It's an extra £4k/year in income tax for those earning over £150k. Is that really going to have a significant upward effect on tax avoidance?
The significant behavioural response (at least an 83 per cent reduction in the pre- behavioural yield) suggested by the analysis would mean that the additional rate is a distortive and economically inefficient way of raising revenue.
This report has also described how the impacts of increasing the highest rates of tax may extend well beyond the direct Exchequer impacts. In particular, other things equal, high tax rates in the UK make its tax system less competitive and make it a less attractive place to start, finance and grow a business. The longer the additional rate remains in place the more people are likely to consider it a permanent feature of the UK tax system and the more damaging it would be for competitiveness. This suggests the negative impact on GDP may increase over time, and therefore the direct yield (and revenues from other tax bases) might fall over time toward or beyond zero.