How bad will tax get?

Cannon_Fodder

Somewhere in the middle will be reality I guess...?

Not good for the "best placed" economy.

ukcarper

michaels wrote: »

Entirely agree - with the caveat that it should just be quoted as income tax as it is already a total sham that it in some way relates to the unemployment and pension benefits that you might receive.

As posters above have noted however Govts do need to be careful with marginal tax rates as the higher they are the greater are the returns on investment in 'avoidance' and thus we move further down the road of the middle earners paying most of the tax as the top earners avoid paying altogether...

I agree do away with NI and incorporate it in income tax after all that’s what it is and as it stands the less you earn the bigger proportion of your salary is taken in NI. But then a basic rate of tax at 20% sounds better than 27% or whatever it would be.

beaujolais-nouveau

*MF* wrote: »

Just how bad will tax get to pay back this lot?

I think that State benefits will be cut as well.

kabayiri

Here you go :-
- to pay for the deficit, announce now that in one year's time the VAT rate will go up to 30%.

Then sit back and watch the mad panic as people buy all manner of goods to beat the deadline, miraculously finding money they had hoarded away under the bed.

Voila! One instant recovery.

michaels

Seemed to work for cars in Germany

kabayiri wrote: »

Here you go :-
- to pay for the deficit, announce now that in one year's time the VAT rate will go up to 30%.

Then sit back and watch the mad panic as people buy all manner of goods to beat the deadline, miraculously finding money they had hoarded away under the bed.

Voila! One instant recovery.

*MF*

This is the HMRC pie chart of the tax take for 2007 - 2008.

From here:

http://www.hmrc.gov.uk/about/dept-report-2008.pdf

Thrugelmir

kabayiri wrote: »

Here you go :-
- to pay for the deficit, announce now that in one year's time the VAT rate will go up to 30%.

Then sit back and watch the mad panic as people buy all manner of goods to beat the deadline, miraculously finding money they had hoarded away under the bed.

Voila! One instant recovery.

I think you'll find that that won't raise the money that's required.

One analysis suggested that it would require an increase of 18p in the basic rate of income for 5 years to balance the books. This was on the basis that no other action was taken and that social security costs increased due to a prolonged down turn.

kabayiri

Hmm, spose you're right.

Maybe we should accept more income tax then, but it would be nice to think that the super rich were at least paying a fair share. Arguably, some of the city people making 1m bonuses in the good years benefitted the most.

But avoiding paying fair share is seen as the 'clever' thing to do nowadays, it seems.

amcluesent

>One analysis suggested that it would require an increase of 18p in the basic rate of income for 5 years to balance the books<

Which I doubt factors in externalities like 5-15million 'seekers' turning up due to climate change making large parts of the world uninhabitable.

Plus we are post peak-oil and will have to pay the 'going rate' on the marketplace against wealthy China and USA.

Plus the magnitude of unfunded health care costs for millions of senile baby-boomers needs to be factored in.

Plus we will have a fifth-column of 250,000 radicalised, well trained and funded Muslims agitating for civil war.

I pity the children.

Rochdale_Pioneers

Don't forget that the debt can be repaid over many many years, or we can simply choose to ignore it and maintain debt levels sustained by such bankrupt countries as America and Japan. It doesn't all have to be generated in year one of recovery.