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PGA Pro Q+A: Ask Our Expert For Advice On Improving Your Golf Game ⛳
Tax rates
- Thread starter CheltenhamHacker
- Start date
bluewolf
Money List Winner
For gods sake, you can't attack the elderly.... They vote in large numbers!!! Far easier to attack the feckless non-voters who make no difference at election time. 
We simply couldn't afford to run the country with a single rate of tax.
The rest of the tax system is already highly regressive - outside of income tax someone earning £20k pays a substantially higher rate of their disposable income to the government then someone earning £100k through flat taxes on everyday items - VAT, fuel, fags and booze etc. Higher earners dont more per litre of fuel or pint of lager do they?
IMHO, it is fair for the wealthier to contribute more through income tax. The challenge for the government is to ensure that the highest rate of tax isn't prohibitive, personally I believe 40-45% is the maximum it should reach. I'm not close enough to the math to work out what the thresholds should be personally.
To add some personal context - I am late 20s 40% tax payer having grown up in a family always paying the top level of tax, so I'm not trying to 'bash the rich!' My limited economics knowledge does however know that you can't run this country on a flat income tax rate, either from an economic or social perspective.
The rest of the tax system is already highly regressive - outside of income tax someone earning £20k pays a substantially higher rate of their disposable income to the government then someone earning £100k through flat taxes on everyday items - VAT, fuel, fags and booze etc. Higher earners dont more per litre of fuel or pint of lager do they?
IMHO, it is fair for the wealthier to contribute more through income tax. The challenge for the government is to ensure that the highest rate of tax isn't prohibitive, personally I believe 40-45% is the maximum it should reach. I'm not close enough to the math to work out what the thresholds should be personally.
To add some personal context - I am late 20s 40% tax payer having grown up in a family always paying the top level of tax, so I'm not trying to 'bash the rich!' My limited economics knowledge does however know that you can't run this country on a flat income tax rate, either from an economic or social perspective.
Fromtherough
Assistant Pro
The tax brackets for 2015/16 are:
£0-£31785 20%
£31786-£150000 40%
£150001+ 45%
I think the 40% bracket is pitched about rightish. You could argue that those in the higher tier could afford to pay more than 45% but it's a balancing act. The 50% rate was only in place for a year before being reduced due to concerns that the seriously wealthy would move abroad rather than pay 50% on their income.
The more positive elements of our tax system recently is the steep increase in the Personal Allowance which has taken many poorly paid people out of the tax system altogether. However I think some policies such as the Higher Income Child Benefit Charge needs revisiting. Mainly as I think it should be based on household income and not on the highest paid individual. You have scenarios where one person in a household is the sole earner and makes £60k a year so no receive no child benefit. However their next door neighbours both work and earn £49k each but receive the full amount of child benefit. This disparity is wrong in my view.
£0-£31785 20%
£31786-£150000 40%
£150001+ 45%
I think the 40% bracket is pitched about rightish. You could argue that those in the higher tier could afford to pay more than 45% but it's a balancing act. The 50% rate was only in place for a year before being reduced due to concerns that the seriously wealthy would move abroad rather than pay 50% on their income.
The more positive elements of our tax system recently is the steep increase in the Personal Allowance which has taken many poorly paid people out of the tax system altogether. However I think some policies such as the Higher Income Child Benefit Charge needs revisiting. Mainly as I think it should be based on household income and not on the highest paid individual. You have scenarios where one person in a household is the sole earner and makes £60k a year so no receive no child benefit. However their next door neighbours both work and earn £49k each but receive the full amount of child benefit. This disparity is wrong in my view.
G
guest100718
Guest
How about let me take my wifes tax free allowance on to mine if she chooses not to work.
Fromtherough
Assistant Pro
G
guest100718
Guest
no good if you dont qualify
Foxholer
Blackballed
Which you have neglected to reflect in your brackets!
So the correct figures (assuming the other 3 were correct) are...
£0-£10600 0%
£10601-£31785 20%
£31786-£150000 40%
£150001+ 45%
These sort of bands seem fine to me - the only issue being the values at which the bands start!
And, of course, the further 'tax' is National Insurance at around 12% for Employers and 13.8% for Employers (starting from £155 and dropping to 2% for Employees on income above £815 pw). and there are a couple of other 'tweaks' involved too!
NI has been a 'quiet killer' through which governments have squeezed even more out of both employees and employers. VAT, of course, is the other!
By my calculation (not guaranteed to be accurate, but based in those thresholds and rates) someone on a salary of 30600 is actually generating something around 9800 of payment to the government! 4000 Income Tax, 2700 EE NI and the Employer is paying a further 3100.
Those numbers nearly £13000 of income for the government, seems rather a large amount!!
And those figures don't include tax of profit by the compan, nor the VAT on expenditure o what hasn't been removed!!!
D
Deleted member 15344
Guest
With you 100%
Just because someone has managed to gain more money that others doesn't mean they should pay more tax IMO
teetime75
Medal Winner
If the Labour Party get in ,they have said they will cancel this.
Not sure I agree with you. What about giving everyone a decent living wage, up the basic wage, and a single tax rate?
I can't bothered doing the maths, but if those on 40% were only taxed at, say, 25% along with everyone else imagine how much more VAT would be collected on their extra spending power! Imagine how much extra Stamp Duty would be collected for that extra spend..., and not just from the mega rich, but well down the earnings scale - everyone wins.
evahakool
Challenge Tour Pro
As someone that pays tax in the higher band I think it's only fair that I contibute more.
It also must be realised the more you earn the more you can manipulate the system, something the less we'll off can't do. By this I mean the tax relief you can get if you put a large amount in a pension fund
You already contribute more. Someone on £30k will pay 20% of £20k, i.e. £4k. Someone on £50k will pay 20% of £30k = £6k + 40% of £10k = £4k. The guy on £30k pays £4k, whilst the guy on £50k pays £10k... If the guy on £50k paid at the 20% rate, he'd pay £8k, i.e. £4k more than the guy on £30k - double.
evahakool
Challenge Tour Pro
X
Yes I know the sums, the point I would like to put across is I could put 10-20k in a pension fund and the government would give back a substantial amount in tax relief which imo is very unfair on the less wealthy.
Yes I know the sums, the point I would like to put across is I could put 10-20k in a pension fund and the government would give back a substantial amount in tax relief which imo is very unfair on the less wealthy.
Oxfordcomma
Challenge Tour Pro
Being a bit of a geek, I can!
Someone earning £100K currently pays around £30k in tax (I'm ignoring NI here). Take away the personal allowance, it turns out they're paying about 32% tax on everything over that first £10.5K.
Now switch it to a flat rate of £25% on everything over the personal allowance. The tax cut, the amount extra in their pocket, is about £7000.
Two things there - first, we're not getting much extra stamp duty or VAT back from that £7000. Let's say £2K? So now the taxman is missing £5000, which he needs to get from somewhere. And he's going to get it from people earning £20-30K, who are now paying extra tax.
So although a flat tax rate sounds great in principle, what it means in real life is tax cuts for the well-off, and higher taxes for everyone else. And personally, I'm against that. As someone who pays the 40% band, I can afford that tax a lot more than someone on £20K can.
Sharktooth
Head Pro
What's tax?
USER1999
Grand Slam Winner
Not really unfair.
You don't pay tax on the money you put into your pension, but you do get taxed on the money when you draw it as a pension.
If you pay tax on it at both ends, then you are getting hit for 40% on the way in, and 40% of what you draw out.
Fair?
I don't think so, and that's what the Tories are proposing for high earners after this election, and labour similarly, as it's easy money for them.
jp5
Q-School Graduate
I'm no tax expert, but I'd suspect significantly less VAT, at 20%, would be collected than the current level of income tax, at 40% for those earners.
It would create a worse society for the majority of people.
evahakool
Challenge Tour Pro
I wasn't specificatly referring to the tax you pay when you put money in/out of a pension fund , what I was referring to was the tax relief you can get on let's say 10k for example , you can claim back up to 4k , so effectualy you put in 6k and the government put in 4k, so yes very unfair on people earning less imo.
And everyone that has replied to my post seems to have missed the first sentence. Up the basic wage to a decent living wage... a prime example of how people often only focus on their particular viewpoint when considering someone else's opinion...
