Fairness

[Chippy_boy]

Your thread is about "fairness" and you are quoting comparisons of tax paid by using an irrelevant formula and saying it is weighted unfairly towards lower paid workers. The formula is irrelevant because if I was to compare a very low paid worker who pays no tax against anyone who does pay tax, the increase is infinite. In other words you can pick your values to suit your argument.

Hence why I say the comparison is easily misunderstood.

You're talking nonsense. There's nothing to misunderstand. The figures are what they are. Pick any salary levels and they show those on higher earnings paying disproportionately more in tax. That's it.

Why not tell us the tax system you think is fair, because unless you want a straight flat tax rate for all earnings (which hasn't been tried in any modern democratic country as far as I know), your formula will produce these types of comparisons whatever you do.

I have my own views, but that's really not the point. The point is, MORE TAX does not automatically mean MORE FAIR.

I'm talking nonsense am I? Maybe I should give up my day job then and join the benefits queue. Then again, I seem to be earning quite well so must be doing something right.

Maybe you just aren't a good communicator ;-) Either that or you were talking nonsense. If someone pays 7x more tax, what is there to misunderstand about that?

By the way, why have you highlighted the bit above?

 

[TangerineSteve17]

From The Gaudrian

Although the highest rate of income tax only affects a tiny percentage of the UK's 29.3 million taxpayers, it represents a considerable chunk of HMRC's revenue from personal income.

Approximately 6,000 people in the UK pay tax on income over £2,000,000. At the lower extreme, 487,000 people pay tax on earnings over £9,440.

The first £9,440 of earnings is free of income tax. Earnings between £9,441 and £32,010 are taxed at the "basic rate" of 20%, between £41,452 and £150,000 are taxed at 40% and anything over £150,000 is taxed at 45%.

In total, 236,000 people pay the top rate of taxes on earnings over £150,000. Nationwide, the average rate of income tax is 17.7%.

So that's 29 million workers, less than 1 percent earn £150,000+

81% pay the basic tax up to £32,000

15% pay 40p/£1 tax over £40,000 - That's 3.5 million hard working people getting shafted for being successful, or simply paying their dues to society (whichever way you want to look at it)

 

[Citizen of Legoland]

You're talking nonsense. There's nothing to misunderstand. The figures are what they are. Pick any salary levels and they show those on higher earnings paying disproportionately more in tax. That's it.



I have my own views, but that's really not the point. The point is, MORE TAX does not automatically mean MORE FAIR.

I'm talking nonsense am I? Maybe I should give up my day job then and join the benefits queue. Then again, I seem to be earning quite well so must be doing something right.

Maybe you just aren't a good communicator ;-) Either that or you were talking nonsense. If someone pays 7x more tax, what is there to misunderstand about that?

By the way, why have you highlighted the bit above?

I was going to be facetious about "the figures are what they are" but thought better of it and forgot to unbold the text!!

I have a feeling you are not going to understand the exponential nature of tax paid by salary earned which is relevant to your original example of unfairness, i.e. "19 times as much tax on less than 7 times the income", so will get on with something else. You wouldn't be the first to see unfairness in the comparison when it's only part of the story. In fact many politicians fall into the same trap OR know their prospective voters will buy it. And that's politicians from all sides.

Incidentally, I'm not advocating more or less tax for higher earners. I think it's about right for the current financial climate. I'd prefer to see a bigger initial tax-break of around £15k to take more people out of benefits. Something which actually increases the comparison rate you quote as unfair.

 

[blueinsa]

Course you would. But just because you would "fucking love it" doesn't mean its automatically "fair". I'd love it if someone gave me all their savings.

I don't condone benefit fraud or tax evasion, so what's your point?

Tax evasion doesn't justify taxing honest rich people more. Nor does benefit fraud justify cutting honest peoples' benefits. Basically, tax evasion and benefit fraud have got nothing to do with the thread.

If everyone paid what they were supposed too, maybe just maybe the tax system could become fairer for all yeah?

 

[Rascal]

As it stands TODAY, somone on £30k/year pays £4k tax and perhaps gets back some in benefits. Someone on £200k/year pays £76,000. 19 times as much tax on less than 7 times the income. And we are told this is not fair on the poorer person?!?!? Bonkers, just bonkers.

I read your post yesterday on a flat taxation rate for all with interest. I have seen it mooted by the Taxpayers alliance and by UKIP as well. Im in agreement it would simplify things enormously.

As for it being fair as it stands now i suppose depends on what ideology you follow and how you believe society should function.

The problem with a flat tax rate is at the level that a person starts paying tax, any tax paid just above that level its disproportional and will act as a disincentive. Thats why to me tax bands are fairer. Yes the more you earn the more you pay, but at each level you pay the same rate as everyone else. Also i dont believe with PAYE that different bands cause much if any complication.

So rather than a flat rate why not with PAYE introduce more bands. Lets say for arguments sake

upto 12K pay zero
upto 20k pay 10%
upto 30k pay 20%
upto 50k pay 30%
upto 100k pay 40%
over 100k pay 50%
over 500k pay 60%

As your pay increases so does your contribution to society. This is fair because if somebody earns 45k they pay the same rate of tax on that 45K as somebody who earns 55K and so on. Proper progressive taxation and disincentives are smaller due to more bands.

As for raising tax thresholds i find that an odd concept. Much beloved of course by the coalition as it enables them to say they have taken poor people out of tax altogether without mentioning that also in effect they ave given the richest a tax cut as well. If the coalition really wanted to help the poorest they would leave tax thresholds as they stand and reduce the regressive taxation of VAT. The less a person earns the more propensity thay have to spend. Therefore out of all taxes VAT is probably the most unfair

 

[I'm With Stupid]

It's fairly simple. Most people accept that it's fair that people who earn more pay more, and also pay a greater percentage of income beyond a certain level (because once you get to a certain stage, you're talking about excess cash, rather than cash you desperately need to survive). So we have progressive taxation. And therefore the party who does the most to encourage progressive taxation is seen as more fair, and the party that does the opposite is seen as unfair. So when you raise VAT (which disproportionately affects the poor as a percentage of their income) and then cut taxes like capital gains or inheritance tax (which disproportionately benefit the already wealthy), you're inevitably going to be called unfair. And that's before we even mention the amount of tax that the ultra-wealthy pay. It might even be beneficial to have a completely flat tax rate, as long as we could guarantee that the likes of Philip Green and companies like Amazon were paying the same 20% as everyone else. But we all know that wouldn't happen.

Also people always point to income tax as if that's the only measure. What about national insurance? The people who pay the most for national insurance are low income people in a job that doesn't give them a pension (12%). People pay just 2% on income over £3.5k. Now obviously that's technically an insurance scheme, not a tax, but it's still an example of how poorer people get harder hit by anything with a flat rate (or in this case, inverted rate).

 

[denislawsbackheel]

With the election looming, I keep hearing this word fairness.

It's like those with left wing tendenancies seem to want to claim the moral high ground and portray Labour as being about fairness, as opposed to the tories who are evil, and most certainly not "fair".

Well who gets to define what's "fair".

If you are walking down the street with £100 in your wallet and you are robbed, is that fair? What if the person who is robbing you is less well off that you? Is that now OK?

Taking money off people to give it to other people is not automatically "fair". In most cases the people who have more money have worked bloody hard for it. How is it "fair" to say, sorry mate I know you've worked your arse off for this, but we are taking it off you?

I don't like tax, no-one does. But I understand it is a necessary evil and yes, it is an evil. Taking money off people with menaces, is surely an evil whether the robber does it, or the government does it. But I do not accept that taking even more of it is more "fair".

As it stands TODAY, somone on £30k/year pays £4k tax and perhaps gets back some in benefits. Someone on £200k/year pays £76,000. 19 times as much tax on less than 7 times the income. And we are told this is not fair on the poorer person?!?!? Bonkers, just bonkers.

and you can vote!!!!

god help us.

 

[Mustard Dave]

I don't condone benefit fraud or tax evasion, so what's your point?

Tax evasion doesn't justify taxing honest rich people more. Nor does benefit fraud justify cutting honest peoples' benefits. Basically, tax evasion and benefit fraud have got nothing to do with the thread.

If everyone paid what they were supposed too, maybe just maybe the tax system could become fairer for all yeah?

That cuts both ways. If people only claimed what they needed, the benefits system could become fairer for all.

 

[blueinsa]

I don't condone benefit fraud or tax evasion, so what's your point?

Tax evasion doesn't justify taxing honest rich people more. Nor does benefit fraud justify cutting honest peoples' benefits. Basically, tax evasion and benefit fraud have got nothing to do with the thread.

If everyone paid what they were supposed too, maybe just maybe the tax system could become fairer for all yeah?

That cuts both ways. If people only claimed what they needed, the benefits system could become fairer for all.

No issue with that at all, just want to add some balance to the narrative that everything wrong with the country is down to benefit cheats when it plainly isn't.

We lose more due to government mistakes and we save more through unclaimed benefits.

 

[pirate]

Course people pay more tax if they earn a lot it is fair enough those who benefit the most from society pay the most to society

That implies though that 'society' has handed them a decent living, which isn't necessarily the case (in fact, it's rarely the case at all). What if they just knuckled down in school and got better grades? Or what if they just work that little bit harder than us?

I don't earn a lot because I'm not prepared to work long hours, I don't want to commute to London and I don't want too much responsibility; but some people do, so it's only fair that they get paid more. But if taxation is engineered to the point where such people's financial gain is reduced and things are levelled off, then there'll be absolutely no incentive to work harder and earn more.

The government (or whichever party aspires to be it) needs to worry less about squeezing even more money out of hard working high-earning people who already pay tax, and start focusing on getting money from those who have already avoided paying what they were supposed to pay.

thats the fallacy of the right wing in a nutshell.
the rich are rich because they are better and/or work harder and the poor are poor because they are lazy and feckless.

Its bollocks but its the basis of right wing thought