!!!!!! - Clown to raise the top rate of tax to 45%

Dithering_Dad

Pennywise wrote: »

I really can't understand the logic behind not allowing this. It is completely at odds with other taxation.

If you take inheritance tax and capital gains tax, it is freely allowable to transfer assets, free of tax, between spouses, to enable both spouses to use their tax free allowances. So husband has some investments and wants to sell - he transfers some to his wife and then they sell, both getting their annual CGT exemptions. With IHT, we now have a fully transferably nil rate band between spouses, effectively doubling the threshold for paying IHT.

Where is the logic in not allowing the same transferability between husbands and wives? Surely it can't be morally right for the tax to be different if only the husband works earning £70k p.a., as opposed to both working and earning £35k each - it is completely illogical and morally wrong.

It gets worse. If you're an I.T. contractor (for instance) and working under a limited company, you are allowed to pay your wife (or husband) an income for being a secretary and s/he is allowed to be a shareholder in your company and receive dividends.

This means that even though there is only one real income, because it is received in a company, the wealth can be shared between a couple, using up the non-workers tax free allowance and the non-worker's 20% allowance (i.e. get tax-free dividends up to the 40% threshold).

The only people who cannot gain from this are those who are within the PAYE system, i.e. most ordinary working people.

It's totally unjust and descriminatory.

chewmylegoff

michaels wrote: »

One idea is to pay everyone (inc children) a flat lump sum say £4k pa, scrap all other benefits and have a constant tax rate on all income - say 20%

I think this may be too extreme but rather as the non-dom lump sum I think there might be mileage in having a lower top tax rate for the superrich - say 10% on everything earned over 2m on the grounds that this might be paid rather than evaded and thus bring in more tax than a 45% rate. No it doesn't sound fair but if it means that these people pay more tax then it is fairer.

Also in my tax manifesto:
1) scrap the artificial split between tax and NI and employers and employees NI - might not be popular but it makes sense
2) Increase the 0% band (tax plus both bits of NI) to something sensible - 15K?
3) Allow couples where one partner is not working as they are dong a caring role (kids or parents or whatever) to share tax allowances
4) Sort out stamp duty, priorty get rid of the silly everything at the highest rate bands, more radical scrap stamp duty and remove the CGT allowance (beyond index linking)

Any other 'sensible' suggestions for the MSE manifesto - may be we could have a poll thread once we have a few ideas?

so, cut the tax rate to 20% across the board, and then no-one on less than 15k a year pays any tax.

sounds wonderful. how are you going to pay for it?

national insurance up to 30%?

chewmylegoff

Dithering_Dad wrote: »

It gets worse. If you're an I.T. contractor (for instance) and working under a limited company, you are allowed to pay your wife (or husband) an income for being a secretary and s/he is allowed to be a shareholder in your company and receive dividends.

This means that even though there is only one real income, because it is received in a company, the wealth can be shared between a couple, using up the non-workers tax free allowance and the non-worker's 20% allowance (i.e. get tax-free dividends up to the 40% threshold).

The only people who cannot gain from this are those who are within the PAYE system, i.e. most ordinary working people.

It's totally unjust and descriminatory.

if you're set up as a limited company invoicing for your services you also get no sick pay, no maternity leave, no holiday pay, no protection from employment law etc.

it's totally unjust and descriminatory. wait a minute.

mitchaa

chewmylegoff wrote: »

so, cut the tax rate to 20% across the board, and then no-one on less than 15k a year pays any tax.

sounds wonderful. how are you going to pay for it?

national insurance up to 30%?

Overhauling the benefits system, if PA was as high as 15k, then there would be no requirement for child benefit or child tax credits for those that work. Likewise no need for working tax credits.

You would be able to save on admin costs there too.

The benefits system is the biggest drain in the system, the sooner they sort it out, the better.

They wont though as there would be uproar.

michaels

chewmylegoff wrote: »

so, cut the tax rate to 20% across the board, and then no-one on less than 15k a year pays any tax.

sounds wonderful. how are you going to pay for it?

national insurance up to 30%?

I'm not advocating a flat tax rate I'm just saying it has been theorised. It would be paid for by scrapping all benefits as stated and just giving everyone (whatever they earn) a 4k 'living allowance' - savings in admin, fraud etc are huge- everyone gets their 4k (no admin expense) and then everyone pays 20% on earnings, again minimal admin expense and less incentive to hide income as the rate is not high and does not increase

Dithering_Dad

chewmylegoff wrote: »

if you're set up as a limited company invoicing for your services you also get no sick pay, no maternity leave, no holiday pay, no protection from employment law etc.

it's totally unjust and descriminatory. wait a minute.

You do get sick pay, you continue to pay yourself the £12k a year (or whatever PAYE stipend you choose) regardless of whether you're working, sick or out of contract. This obviously also covers maternity, during holidays, etc.

As far as employment laws, you are employed by yourself so unless you decide to sack yourself and/or sexually harass yourself you are pretty safe.

With long-term sickness you should have insurance cover for this. I do - it pays out 28k per year until I retire, far better than I would get from an employer.

chewmylegoff

Dithering_Dad wrote: »

You do get sick pay, you continue to pay yourself the £12k a year (or whatever PAYE stipend you choose) regardless of whether you're working, sick or out of contract. This obviously also covers maternity, during holidays, etc.

As far as employment laws, you are employed by yourself so unless you decide to sack yourself and/or sexually harass yourself you are pretty safe.

With long-term sickness you should have insurance cover for this. I do - it pays out 28k per year until I retire, far better than I would get from an employer.

the company doesn't carry on earning money when you aren't working :rolleyes:

ad9898_3

Flat Tax is a good idea DD, I would also abolish Council Tax, I can empty my own bins.:D

lostinrates

ad9898 wrote: »

Flat Tax is a good idea DD, I would also abolish Council Tax, I can empty my own bins.:D

But loads of people can't.....then there is all the other stuff the council does....flat taxation on income to me would suggest that the logical fair council tax alongside that was a poll tax

amcluesent

Brilliant character assassination of Clown by Boris today, describing the corrupt fool as "a like a sherry-addled dowager who, having lost the family silver on the roulette wheel, decides to double-up and bet the house."

So true. Except it's the money of 'hard working families' the pension-thief is gambling with.