Poll: Poll: Prime Minister Theresa May calls General Election on June 8th

[Efour]

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

 

[Spook187]

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.

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.

 

[dowie]

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 isn't quite the same as - the housing market is pretty backwards whereby stamp duty applies to the total

 

[Hagar]

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 you imagine the complexity? It is still worth being in the higher band as you always keep most of the money and you only pay the higher % over the threshold

 

[dowie]

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.

what do you even mean by this? We operate a progressive system - plenty of poor people don't even pay income tax

 

[Vonhelmet]

what do you even mean by this? We operate a progressive system - plenty of poor people don't even pay income tax

The poor typically pay more tax once you take consumption taxes - VAT, principally - into account.

 

[Nitefly]

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?

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!

 

[dowie]

The poor typically pay more tax once you take consumption taxes - VAT, principally - into account.

but we're talking about income tax - then again that isn't necessarily the case anyway*, not to mention that VAT rates vary and a portion of that burden is through lifestyle choices

*
https://www.ifs.org.uk/publications/4813

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.

 

[Vonhelmet]

I stand corrected, and kudos for using a decent source for proving me wrong. It does put a different spin on things if you take benefits into account.

 

[V F]

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

Even though that is nothing to judge but god help us if Labour was to get back in. Imagine that Diane Abbot running the Home Office.

 

[bloodiedathame]

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!

Yeah in retrospect it's not an accurate statement, incomes bunching up doesn't happen in the same way. Must engage brain before posting.

 

[Scania]

I listened to Corbyn and Mays respective speeches tonight on the radio, one was a shouty wannabe and the other sounded very much what she already is, Prime ministerial.

Corbyn doesn't have a prayer which is unfortunate for us all as we desperately need a strong and cohesive leader of the opposition, Corbyn is neither and he's damaging his cause more than he realises.

Shame for democracy that this idiot is so entrenched.

 

[McPhee]

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

It largely depends on what McDonnel meant. I assumed he was suggesting bringing the Additional Rate income tax threshold down to £70k.

 

[Amp34]

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?

Because people have different definitions on what "fair" is.

I'm all for a flat income tax rate, with a large tax free allowance. Basically tax free on the minimum to live (say around £15k) and then a flat rate on everything above that (say 30%). That way you are equally taxed on your earnings that would be considered "extra" to live, but no one is taxed on the essential amount to live on.

Others don't thin that's "fair" and that the better off should pay more in real terms and proportionally as they gain more income, hence the brackets.

 

[dowie]

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

 

[McPhee]

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?

FWIW I'm not strongly in favour of tax rises. I just accept that as a society with high income disparity, they're necessary if we want to maintain a level of equality; everyone entitled to a minimum standard of living, healthcare, education. The American model of high income disparity, low taxes and a small state isn't one I'd like to see us follow.

 

[chroniclard]

As a family we already pay a shed load of tax. Most likely wont vote for anyone that taxes higher earners more.

 

[dowie]

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?

not just tax avoidance but I think it certainly can (ideologically I think it is pretty unfair anyway to further increase taxes on the people who already disproportionately fund/subsidise the rest of the country) - anyway we've had experience of this group responding to tax changes in the past and the 'behavioural response' was much larger than expected last time around - HMRC concluded that it was inefficient

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.

also it isn't just loss of income tax revenue that you need to consider here:

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.

http://webarchive.nationalarchives.....gov.uk/budget2012/excheq-income-tax-2042.pdf

 

[chroniclard]

This is just going to be another alt-facts/post truth election isn't it.

 

[Secret_Window]

So the labour mps that are stepping down, are they typical labour safe seats?