What level of taxation is "fair"?

[spudbynight]

We often see mention in the press of how everyone should pay their fair share of tax. This is normally in reference to "the rich" not paying enough.

Now, this is normally associated with increasing the marginal rate that high earners pay. It does make me think though about whether that in itself is "fair".

Now, I am not talking about what a country needs to collect to support itself - just the concept of fairness. Is it fair for someone to give a larger proportion of their income than someone earning less?

In my mind the only fair way to tax people is to have a flat level of taxation that taxes everyone on all income at the same marginal rate. I don't think that is the right thing to do but it is the fairest.

Personally I don't think we should tax people fairly. For example I don't believe we should be taxing anyone on the minimum wage at all. That isn't fair - but it is the right thing to do. I think the important thing to consider here is the difference between justice and fairness.

 

[Xordium]

A level of taxation that is fair for me would be a tax that is directly observable and not hidden in a variety of different ways.

Taxation at low incomes is counterproductive as you then have to employ people to redistribute tax earnings back to those people to ensure that the equality gap is not too great.

 

[spudbynight]

I really wanted to look at the fairness side of things isolated from practicalities.

Taxing the poor is either fair or it isn't - any knock on effects are a separate issue.

 

[scorza]

A fair, or progressive tax is one which taxes at a higher proportional rate from those who benefit the most from society and are most able to pay. I don't agree with arbitrary assertions like anything >50% is unfair, or anything that isn't a flat tax is unfair.

It's only half the problem though, you also need to look at how wealth is redistributed back to the most vulnerable in society. The aim should always be to minimise income inequality.

 

[Woden]

I really wanted to look at the fairness side of things isolated from practicalities.

Taxing the poor is either fair or it isn't - any knock on effects are a separate issue.

But the practicalities are part of what does, or doesn't make the tax fair. What you get for your money is part of what makes a tax fair/unfair.

If you tax me 20% of my wage, but I get half of that back, it would be fairer to *everyone* to just tax me 10% and save money on the admin of my benefits.

 

[Nitefly]

We can argue about taxation rates until the cows come home, but I might as well be first and say that a flat tax rate would be grossly unfair.

As it goes, I don't think it's too unfair now in relation to income tax.

 

[TommyV]

Taxing me nothing would be fair as I'm a top bloke.

 

[VeNT]

100%
it's the only way.

 

[wildman]

The aim should always be to minimise income inequality.

Why should thisbe the aim, if the inequality is in some cases due to the ineptness / laziness of some dregs who would rather 'sponge' from the state ? This is actually unfair as it means certain sections of society end up working to keep some people in lifestyles that are in some cases considerably more comfortable than those who are actually working and earning ?

I am happy with your statement providing there is a caveat that prevents the kind of state benefit gouging we saw under Labours term of office. There needs to be a division between those who are 'unequal' in true terms, and those who are just professional malingerers and work shy.

 

[elmarko]

Looking at trying to make it fair via taxation is backwards.

The problem is income inequality, sort that out & you can have one tax code.

It's akin to the mind numbingly stupid argument "the rich pay all the tax" - when in reality all that shows is that income is distributed grossly unevenly.

I'm in favour of the poor paying more tax (as a side product of having a greater share in the wealth - or the reward of the labour in you want to view it that way).

A fair, or progressive tax is one which taxes at a higher proportional rate from those who benefit the most from society and are most able to pay. I don't agree with arbitrary assertions like anything >50% is unfair, or anything that isn't a flat tax is unfair.

It's only half the problem though, you also need to look at how wealth is redistributed back to the most vulnerable in society. The aim should always be to minimise income inequality.

Indeed - I agree entirely.

On a side note I actually think I should be paying more tax than I do currently (when I compare how much money I have left after expenses compared to somebody on around the minimum wage - that really isn't fair).

A flat tax rate is a stupid idea, as not everybody equally benefits from living in our society.

 

[RomanNose]

Get away with the square wave tax bands and get a nice exponential curve .

 

[spudbynight]

A fair, or progressive tax is one which taxes at a higher proportional rate from those who benefit the most from society and are most able to pay. I don't agree with arbitrary assertions like anything >50% is unfair, or anything that isn't a flat tax is unfair.

Progressive tax is not a synonym for fair tax. You might be of the opinion that progressive taxation is fair.

There is an argument to be made that a progressive tax does not offer equality before the law. I am not arguing against progressive taxation just putting forward the view that it isn't fair.

 

[TommyV]

Communism is the only answer.

 

[spudbynight]

We can argue about taxation rates until the cows come home, but I might as well be first and say that a flat tax rate would be grossly unfair.

As it goes, I don't think it's too unfair now in relation to income tax.

Why do you think a flat tax rate would be unfair?

 

[Jokester]

Surely the people that benefit most from society are those that get more in benefits?

There's no such thing as fair tax. One way or another everyone gets shafted, apart from those that don't work.

 

[spudbynight]

I think it's also important to keep things relatively simple (the more complicated things are, the more loopholes appear).

I would agree - I personally think there is a strong case to be made for a flat rate of tax on all income with no loopholes. Everyone pays a flat X% on every penny they earn whether it comes from employment, interest, capital gains or anything else.

 

[elmarko]

Progressive tax is not a synonym for fair tax. You might be of the opinion that progressive taxation is fair.

There is an argument to be made that a progressive tax does not offer equality before the law. I am not arguing against progressive taxation just putting forward the view that it isn't fair.

If you want to be picky then nothing is fair, as fair is a subjective valuation.

But I could argue that a progressive tax system provides a greater fairness in the reward for the labour done by those at the bottom.

While everybody paying the same percent may be a "fair numerical value" for taxation, it's not a "fair reward for labour spent".

I fail to see the value in the point you made, his statement was valid (pending on view).

I would agree - I personally think there is a strong case to be made for a flat rate of tax on all income with no loopholes. Everyone pays a flat X% on every penny they earn whether it comes from employment, interest, capital gains or anything else.

But, I do agree this would be a step in the right direction.

 

[OpenToSuggestions]

Taxing the poor is either fair or it isn't - any knock on effects are a separate issue.

I would argue that the UK doesn't have poor.

My definition of poor is:
- No police cover
- No fire cover
- No legal cover
- No health cover
- No running water and/or toilets
- Nowhere to live
- No food
- No jobs
- No education

The UK has a whole different view of 'poor'. In the UK what the media classes as poor is not even close to poor. In the UK poor is:
- Double glazing
- Central heating
- Sky HD
- Cigarrettes
- University grants
- Child benefit
- Social housing
- A 3 peice suite
- Holidays abroad
- Legal/fire/health cover
- Free education

When the 'poor' moan about taxation in the UK (I am focussing on those who cba to work) they have no idea how well off they are. People at the bottom should have the same rights, health cover etc. as everyone else but they shouldn't me smoking and drinking, with a yearly fortnight in Malta and a full Sky HD package. This is where my complaints are.

 

[PermaBanned]

Anything can be fair, even 100%. What could make it unfair is what's done with those taxes.

 

[Nitefly]

Why do you think a flat tax rate would be unfair?

Because generally speaking and to obvious extents, those who earn vastly more can afford to pay an additional proportionate amount more on the extra money earned. If this wasn't the case, those who earn less would have a much lower quality of life, which is something I wouldn't want.

...what could make it unfair is what's done with those taxes.

Good point