Paradise Papers

This topic contains 110 replies, has 11 voices, and was last updated by steveosnakeeye steveosnakeeye 6 years, 4 months ago.

Viewing 20 posts - 41 through 60 (of 111 total)
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  • #1555816
    MacGuffin
    MacGuffin
    Participant
    • :

    @Paxman – Why not talk about footballers. Jay was talking about the same rate for everybody.

    I think you both seem to be complaining about the rates for people earning a middle class salary. A flat rate for all would maybe see the rate increase if the government loses out on the high tax from the wealthy who will make up the difference. The lower paid can’t, they don’t have the money.

    Yes I agree they are over-taxed but beyond that cannot comment more being an expat and not knowing UK incomes and expenditures.

    On a side issue ………

    My social revoloutionary gripe is that government seems to see taxation as its only form of income. I dont think it has to be that way. Government could and should get revenue streams from other sources ie make money, not simply take it from others who have made it.

    #1555820
    Jay belfast
    Jay belfast
    Participant
    • :

    Mac I agree with the principle that we should help those who do not have the ability but a single rate of tax also addresses this I guess is my point. Someone on 70k paying 25% pays more in tax than someone who earns 30k and 25%. It’s the increasing rate of tax with higher incomes I do not think is logically fair.

    #1555822

    Paxman
    Participant
    • :

    Mac – I think Jay sums it up perfectly, the higher earners pay more for tax towards eveything even on a flat rate, and as said in his early post probably use less, what with Private healthcare etc. They already have a higher tax rate, at the moment it is

    11,500 – 45,000 = 20%
    45,000 – 150,000 = 40%
    150,000+ = 45%

    I wonder what the tax revenues would be like if it was a fairer

    11,500 – 150,000 = 25%
    150,000+ = 45%

    I don’t think the middle bracket should be there as many people within are not in the least bit well off, and there are so many other factors, what about someone on 40K that owns his own house compared to someone on 55K that is saving to buy, or struggling with a mortgage.

    #1555831
    MacGuffin
    MacGuffin
    Participant
    • :

    @Paxman – I see what you’re aiming for … to reduce taxation on the 45-150k group. I’m not sure the 11k earners can afford 25%. I think the tax free threshold needs to be raised. There needs to be incentive to work not get the dole and a cash in hand sideline.

    Not sure if I misunderstood previous posts since you do have a higher rate for the top earners – its hardly a flat rate for all – its just tinkering with the rates and bands.

    A factor that concerns me is motivation. Its heartbreaking to get the pay packet and see so much go in taxes. If companies offered tax free salaries (ie they or consumer pay) then it would be easier to swallow.

    But yes, I agree that 40% is ridiculous. And all the more so when you can’t see where it is going or its going to unworthy causes …….. like the EU ho ho ho

    #1555866

    Paxman
    Participant
    • :

    Mac – to be fair the 11K earners would not be paying 25% 12K earners would pay £125 per year 11.5K tax free and £500 at 25%, that is only £25 a year more than they pay now.

    #1555872
    MacGuffin
    MacGuffin
    Participant
    • :

    @Paxman – OK gotcha but I agree with the poster who suggested a 20k tax free. And maybe the 100-150k band could take 30% although as I said before I prefer the government to start making money itself.

    #1555888

    mufc
    Participant
    • :

    Inland revenue.

    #1555894

    Paxman
    Participant
    • :

    Mac – Yeah I agree, to be honest if the tax free was left at 11.5K and a flat rate moved to 25% even the people currently in the 40% bracket would pay more until they reached 75K at that level the two systems are about equivalent, after that the suggested system would mean paying less.

    #1555995
    MacGuffin
    MacGuffin
    Participant
    • :

    @Pax – I’m sure a few days playing around with spreadsheets would yield answers.

    BUT first we as a society should decide on the underlying principles on which taxation is based. The problem with income tax (in most cases) is we are taxing human work and advancement. If you put in overtime to earn more you can hit another tax bracket and be punished. If you educate yourself to get better job & pay you are punished.

    My ideal would be to tax the product.service not the people. If you don’t mind let me explore my thinking using brewing as example.

    CURRENT SYSTEM
    1] Brewery has to pay higher wages in order for employees to have acceptable post-tax income.
    2] IF they used more machines instead of humans they avoid labour cost. Machines do not pay income tax (perhaps they should).
    3] The costs are passed onto consumers in beer prices but if sales are down they still have to pay the wages (tax).
    4] And for exports the tax is inherently included so export price higher.

    MY SYSTEM
    1] If no income tax but higher tax on beer …. the cost of beer production is down, but cost to consumer with added tax the same (for sake of argument).
    2] Consumption should be the same given same price
    3] Automating would not save costs since labour is tax free like machines
    4] Exports could be taxed at whatever rate government deems suitable. And if no tax (eg EU) then cheap beer means more sales means more employment and global brand awareness of the great british pint !
    5] And workers with more money in their pocket have choice whether to spend the extra income on beer or whatever.
    6] Revenue from beer tax should (mostly) go to departments most affected by beer consumption eg health, police. The tax could even be a composite of police tax, health tax etc. so one department could adjust tax to meet their added costs.
    7] It allows government greater control over consumption to increase tax on the bad and lower it on the good. It can target the rich more by taxing luxuries more than necessities.

    PS – We must look closer at how money is spent, the waste, the necessity, efficiency etc. AND raise more money from means other than taxation.

    #1556030
    Jay belfast
    Jay belfast
    Participant
    • :

    how are you replacing all the lost tax from goods that attract no vat? All public service, food, kids clothes etc?

    #1556033

    Paxman
    Participant
    • :

    Mac – Just for a bit more info, using Brewing as you were, in a year a certain Brewery made £7M in profit, in that same year it paid the government £267M in taxes, so the next time people moan about the price of their pint and blame the breweries, think on is there any wonder they sold it off?

    As far as a few day, you underestimate me, the calculations can be done in minutes with the relevant data to hand 🙂

    #1556057
    MacGuffin
    MacGuffin
    Participant
    • :

    @Paxman – You do your proposal in minutes but to do many permeations of other possibilities would take longer.

    I don’t think anybody is unaware of tax on alchohol. If the tax was imposed on the end seller (I assume its not) then you dont pay the 267m … correct?

    @jay – The sales tax (VAT by another name) is increased on some products. The kids clothes pay zero but that tailored mohair gets whacked.

    The low labour cost clothes from China lose their edge when UK clothes don’t have to support higher UK wages due to income tax.

    #1556072

    Paxman
    Participant
    • :

    Mac – If the tax is imposed on the end seller rather than the brewery then the brewery would have to drop it’s prices down to the level it currently sits before the tax is added, otherwise the pubs wouldn’t be able to afford it. To put it into perspective if the brewery had dropped its own prices by the equivalent of 10p per pint they would have lost money, so it doesn’t really matter where the tax is levied, the trade is dying as it is, the government is pricing the pub goer out and pushing us to be a nation of sitting at home drinkers, which is already at a high level. The days of local pubs and going for a couple of pints to socialise is numbered, pub are closing every day at an alarming rate, which is a very sad state of affairs.

    #1556073

    Paxman
    Participant
    • :

    Mac – That is how you do the spreadsheet all the calculation are already set, all you do is change the parameters, eg Taxation level, Salary and the spreadsheet re-calculates automatically, so still done in minutes 🙂

    #1556104
    MacGuffin
    MacGuffin
    Participant
    • :

    Pax – I do know how spreadsheets work but I was thinking of more factors, breakdowns, permutations, collecting + input of raw data, analysing results etc. How long does it take the Congressional Budget Office to come out with the impact of the US tax reform proposals?

    Anyhow … we agree number crunching would give insight.

    #1556106

    Paxman
    Participant
    • :

    Mac – I was talking purely on the tax impact from varying levels of tax free allowances and percentages. 🙂

    #1556153
    Jay belfast
    Jay belfast
    Participant
    • :

    Still dont think it would work mac increasing vat on other goods (well it would work I just dont think it is reasonable).

    According to the link below income tax will account for £243 billion to the government purse. Just looking at public service jobs (i.e. jobs that do not have any goods to collect VAT on), these account for 17% of the workforce so we can assume they account for 17% of the tax income (although probably more as average public service wages are normally more than private sector). 17% of 243 is £41b loss of income tax. Your plan is to recoup this through VAT. VAT is projected to make £318m. So we would need to increase VAT by 13% to make up this shortfall.

    This also doesn’t take into account the additional VAT income (above this 13% increase across the board) that you need to collect from not collecting income tax on zero rated goods and services (children’s clothes, food, books, medical related etc).

    I think when you weigh it all up prices would be going up +25% on average. Given how many people are employed in food related jobs it could be way above this but vat on food sales is complicated so hard to estimate figures for this part.

    https://www.ukpublicrevenue.co.uk/current_revenue

    #1556154
    Jay belfast
    Jay belfast
    Participant
    • :

    oh and I think adding it on to certain products and not others is a minefield. Difficult to construct and makes collecting it much more complicated. Then there’s the whole argument of free market economics vs state directed/influenced markets and inefficiency.

    #1556172
    Alfie07
    Alfie07
    Participant
    • :

    Having a higher rate of VAT on luxury goods is all well and good in theory, but the amount of additional VAT collected would be minor in reality due to the relatively small number of these items sold.

    The additional VAT will also reduce the number of items sold, so the number of workers required in that particular industry would fall resulting in loss of earnings and higher unemployment.

    #1556173
    MacGuffin
    MacGuffin
    Participant
    • :

    @jay – Not sure if we are talking on same wavelength. I was suggesting abolishing (or drastically reducing) income tax and shifting the tax burden onto products (ie the consumer).

    Clearly if we have a low (or zero) tax on one product the shortfall has to be made up by increasing the tax on another product. This pretty much happens now with different VAT rates or increase in income tax.

    There is already the principle that necessities (baby milk) or products considered good for the nation (eg education books) is taxed less than luxuries and other goods. Same principle.

    Yes there would be dramatic increase in VAT and dramatic decrease in income tax. The biggest problem with my theory would be people not on a wage (eg pensioners) who would need massive increases and possibly (unsure) people saving the extra money instead of paying the higher price for products. But increased savings (if not offshore) should increase money for banks to lend and thereby decrease interest and mortgage rates.

    Collection is no more difficult than VAT is now, its the same just a higher rate. Deciding what product has what tax is a minefield but any more than what wage pays what rate. At least there could be some justification of why one product has a higher rate than another.

    Yes it means to an extent state influence over consumption but is that bad, doesn’t it happen now. Is it any worse that state influencing the decision to automate jobs or ship them overseas because of lower labour costs.

    Let me think up a scenario as example… for next post.

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