is there a war on the poor?

Sporky

PolarityMan said:

theres a pretty clear step change there that suggests if the poor want more money from the rich then less punitive taxes are the answer.

If the tax rate is lower it becomes more economical to pay the tax than to pay an accountant and/or lawyer to work out how to avoid paying the tax. I think it's likely there's a crossover point, and I think it's likely that a top rate of tax lower than 40% is probably the crossover point.

I have an inkling - and it's far from a revolutionary thought - that the way to maximise income tax revenue is probably a flat level for everyone - 25%? -  and a very generous tax free allowance. That way those on low incomes don't pay anything (after all, what they pay just goes in a circle and comes back as income support, housing benefit and so on), those in the middle don't feel so squeezed, and those at the top don't join weird schemes to channel their money via three shell companies each in a different tax haven, finally returning as dividends paid on companies that those companies create and sell to each other.

marantz1300

If I'm paying 53% of £10,000,0000,I still have a lot more to live on then if I'm paying 12% of £20,000.

Evilmags

Sporky said:

PolarityMan said:

theres a pretty clear step change there that suggests if the poor want more money from the rich then less punitive taxes are the answer.

If the tax rate is lower it becomes more economical to pay the tax than to pay an accountant and/or lawyer to work out how to avoid paying the tax. I think it's likely there's a crossover point, and I think it's likely that a top rate of tax lower than 40% is probably the crossover point.

I have an inkling - and it's far from a revolutionary thought - that the way to maximise income tax revenue is probably a flat level for everyone - 25%? -  and a very generous tax free allowance. That way those on low incomes don't pay anything (after all, what they pay just goes in a circle and comes back as income support, housing benefit and so on), those in the middle don't feel so squeezed, and those at the top don't join weird schemes to channel their money via three shell companies each in a different tax haven, finally returning as dividends paid on companies that those companies create and sell to each other.

The Chicago economist Laffer did a careers worth of work on this. 

Sporky

Evilmags said:

The Chicago economist Laffer did a careers worth of work on this. 

And I aced it in a paragraph. Tells you a lot about economists.

More seriously, is there a TL:DR version of his findings?

PolarityMan

Sporky said:

PolarityMan said:

theres a pretty clear step change there that suggests if the poor want more money from the rich then less punitive taxes are the answer.

I have an inkling - and it's far from a revolutionary thought - that the way to maximise income tax revenue is probably a flat level for everyone - 25%? -  and a very generous tax free allowance. That way those on low incomes don't pay anything (after all, what they pay just goes in a circle and comes back as income support, housing benefit and so on), those in the middle don't feel so squeezed, and those at the top don't join weird schemes to channel their money via three shell companies each in a different tax haven, finally returning as dividends paid on companies that those companies create and sell to each other.

Thats pretty much exactly my feeling. 

PolarityMan

marantz1300 said:

If I'm paying 53% of £10,000,0000,I still have a lot more to live on then if I'm paying 12% of £20,000.

Why is that in and of itself a problem though? Or more specifically are you trying to define "fairness" as everyone having exactly the same or everyone contributing the same?

capo4th

The "rich" pay 40-50% plus in taxes on everything they earn. 

Is a man on £50k salary rich? 
Is a builder on £250 a day rich? 
Is a woman on £75k a year rich? 
Is a man on £100k a year rich? 

Evilmags

Sporky said:

Evilmags said:

The Chicago economist Laffer did a careers worth of work on this. 

And I aced it in a paragraph. Tells you a lot about economists.

More seriously, is there a TL:DR version of his findings?

probably done from US data, it will vary dependent upon numerous factors. 

stickyfiddle

Sporky said:

PolarityMan said:

theres a pretty clear step change there that suggests if the poor want more money from the rich then less punitive taxes are the answer.

If the tax rate is lower it becomes more economical to pay the tax than to pay an accountant and/or lawyer to work out how to avoid paying the tax. I think it's likely there's a crossover point, and I think it's likely that a top rate of tax lower than 40% is probably the crossover point.

I have an inkling - and it's far from a revolutionary thought - that the way to maximise income tax revenue is probably a flat level for everyone - 25%? -  and a very generous tax free allowance. That way those on low incomes don't pay anything (after all, what they pay just goes in a circle and comes back as income support, housing benefit and so on), those in the middle don't feel so squeezed, and those at the top don't join weird schemes to channel their money via three shell companies each in a different tax haven, finally returning as dividends paid on companies that those companies create and sell to each other.

This! 

I've never understood why the government sets a minimum wage they claim is reflective of the average cost of living based on working 40-45 hours a week, but then make you pay tax on it. Surely it would be much cleaner to optimise it so the first tax threshold is equivalent to a 40-hr week at minimum wage. Then anyone working part time or at the minimum wage is lifted out of income taxation, and anyone working a full time job above minimum pays the same share of that extra income to the government. 

I'm a perfect example of someone who's gone as far as leaving the country (partly) to avoid paying taxes so I can save more money and buy a house, but if taxes were lower I'm sure we'd have thought twice.

marantz1300

PolarityMan said:

marantz1300 said:

If I'm paying 53% of £10,000,0000,I still have a lot more to live on then if I'm paying 12% of £20,000.

Why is that in and of itself a problem though? Or more specifically are you trying to define "fairness" as everyone having exactly the same or everyone contributing the same?

Not a problem.I'm not saying everyone should pay the same.
Just pointing out the wealthy could pay more tax and still have a great standard of living.
Those on minimum wage are struggling even if they paid no tax.

digitalscream

marantz1300 said:

PolarityMan said:

marantz1300 said:

If I'm paying 53% of £10,000,0000,I still have a lot more to live on then if I'm paying 12% of £20,000.

Why is that in and of itself a problem though? Or more specifically are you trying to define "fairness" as everyone having exactly the same or everyone contributing the same?

Not a problem.I'm not saying everyone should pay the same.
Just pointing out the wealthy could pay more tax and still have a great standard of living.
Those on minimum wage are struggling even if they paid no tax.

They already do pay more, and they always will. Did you completely miss the point (actual evidence) that punitive tax rates reduce the tax receipts and increase the tax burden on the lower paid?

marantz1300

I think your ignoring the point.

Drew_TNBD

marantz1300 said:

I think your ignoring the point.

No. You're just not very smart.

Axe_meister

The 40% threshold should be far higher in my opinion. At around 42k it is far too low. It hasn't really moved much in decades. It's only a 30 k difference between the tax free threshold or about 13k over the national average hardly rich man territory. 

CabbageCat

marantz1300 said:

I think your ignoring the point.

Your point seems to ignore the fact that it's the rich's money. Someone poor dude might want it more than they do but should that be enough to force the rich to give it to them?

Roland

The conclusions I draw from reading all 7 pages of this thread are that:

1. There is greed at all levels, from billionaire down to benefits fraudsters, but it's limited to a fraction of the population.
2. There is a proportion of the contributors who prefer to hang onto their personal prejudices rather than consider the points that others are trying to make.

To misquote: "the greedy are always with us".

I'm much more irritated by the prejudiced than I am by the greedy.

digitalscream

stickyfiddle said:

Sporky said:

PolarityMan said:

theres a pretty clear step change there that suggests if the poor want more money from the rich then less punitive taxes are the answer.

If the tax rate is lower it becomes more economical to pay the tax than to pay an accountant and/or lawyer to work out how to avoid paying the tax. I think it's likely there's a crossover point, and I think it's likely that a top rate of tax lower than 40% is probably the crossover point.

I have an inkling - and it's far from a revolutionary thought - that the way to maximise income tax revenue is probably a flat level for everyone - 25%? -  and a very generous tax free allowance. That way those on low incomes don't pay anything (after all, what they pay just goes in a circle and comes back as income support, housing benefit and so on), those in the middle don't feel so squeezed, and those at the top don't join weird schemes to channel their money via three shell companies each in a different tax haven, finally returning as dividends paid on companies that those companies create and sell to each other.

This! 

I've never understood why the government sets a minimum wage they claim is reflective of the average cost of living based on working 40-45 hours a week, but then make you pay tax on it. Surely it would be much cleaner to optimise it so the first tax threshold is equivalent to a 40-hr week at minimum wage. Then anyone working part time or at the minimum wage is lifted out of income taxation, and anyone working a full time job above minimum pays the same share of that extra income to the government. 

I'm a perfect example of someone who's gone as far as leaving the country (partly) to avoid paying taxes so I can save more money and buy a house, but if taxes were lower I'm sure we'd have thought twice.

That's actually the current government's goal with raising the minimum wage and the lower tax threshold. The plan is (was?) that by the time minimum wage hits the target of £10/hr, the lower threshold will also have risen to be equivalent to a full time job on that wage.

But of course...they're evil Tories, so there must be an ulterior motive.

sweepy

Some of my friends consider me "well off" on just over £40k but with 2 kids at Uni and a terminally ill wife, perspective is very much that, perspective. There is no slack whatsoever in our family budget and I'm pretty convinced that this is the case nationwide. Where the Press seem to take great delight in denigrating the " Working Classes" branding them as scrounges and work shy, the "Us and Them" dynamic rolls on and even seems to gather even more momentum. Never in my 53 years have I seen such a divisive and polarised Country, something has to change but it certainly won't in my lifetime 

chrispy108

Sporky said:

I have an inkling - and it's far from a revolutionary thought - that the way to maximise income tax revenue is probably a flat level for everyone - 25%? -  and a very generous tax free allowance. That way those on low incomes don't pay anything (after all, what they pay just goes in a circle and comes back as income support, housing benefit and so on), those in the middle don't feel so squeezed, and those at the top don't join weird schemes to channel their money via three shell companies each in a different tax haven, finally returning as dividends paid on companies that those companies create and sell to each other.

I'd go even further - give everyone enough benefits to live on, then tax everything at a flat rate. You'd set the limit so the average person would be the same off now as before.

No tax evasion
No loopholes where it isn't worth working because you'll lose more in benefits than you earn
No sanctions
No waiting to get signed on after getting some temporary work
"Fair"

As Lee says, what the Tories are doing to lift the tax threshold should be praised, but their evil Tories so it won't be.

chrispy108

marantz1300 said:

If I'm paying 53% of £10,000,0000,I still have a lot more to live on then if I'm paying 12% of £20,000.

Yes, but you'd need the first person in your "argument" is paying for the lifestyle of an awful lot of households of the second guy. (I'd do the sums, but you can't put commas in numbers properly so I'm not sure how much the first chap is earning).

I find it incredible how many people have a massive chip on their shoulder about "the rich", despite not having paid enough tax to pay for their birth, healthcare and education, let alone all the other stuff they've personally received. (I certainly haven't, but I appreciate "the rich guy", I don't vilify him).