The last taboo -raising income tax

Loughton_Monkey

Radiantsoul wrote: »

Why is there a taboo on raising the basic rate of income tax?

It seems fairer than raising endless indirect taxes and is similiar to raising NI.

Interesting question.

Take someone on, say, £25K a year.

Basic rate Tax: £3,705
NI: £2,121
Council Tax?: Say £1,000
VAT: Say £2,400 (20% of £12K vatable expenditure?)
Car Tax: £180?
Fuel Tax: £300?
Alcohol/Tobacco tax: £300?

Therefore, tax bill approaching £10K (40% of Gross) but only about a third of it basic 20% tax.

Oldernotwiser

arrontdep wrote: »

It is a lot simpler to do but causes more direct problems becuse it automatically cuts straight into income. It is ok for people that have a fair bit of disposable income but for people that are on the breadline, which at the moment is probably over 1/3 of the country, cuts straight into their expenditure and they can't afford to pay things out.

Fairly simple to raise the level of personal allowances so that the least well paid don't lose out.

Raise them even more and get rid of the farce that is tax credits.

Thrugelmir

Loughton_Monkey wrote: »

VAT: Say £2,400 (20% of £12K vatable expenditure?)

More likely to be their mortgage repayment and shopping bill. Than VATable expenditure.

The high level of funds committed to debt repayment generates little to no economic activity and therefore no tax revenues.

Jowo_2

I read a newspaper article this weekend from a journalist reminiscing about studying for a degree around three decades ago where as a mature student, he received a full grant, there were no fees, got housing benefit and could sign on during the summer but he was fully aware that this was only possible because of how workers were clobbered with much higher taxes then.

PasturesNew

Thrugelmir wrote: »

Freezing of 40% band will have an impact after a couple of years. With increasing numbers of people caught in the net.

Being "caught in the net" of people earning more than those NOT caught in the net ... is a problem many of us would love to have.

PasturesNew

Jowo wrote: »

I read a newspaper article this weekend from a journalist reminiscing about studying for a degree around three decades ago where as a mature student, he received a full grant, there were no fees, got housing benefit and could sign on during the summer but he was fully aware that this was only possible because of how workers were clobbered with much higher taxes then.

He would also have been one of a few people "in the know". Information was not so freely available back then - apart from access to a Uni place (I think it was 10-12% of people, rather than the current 45-50%).

So he'd have known about Uni courses, known how to get onto one - and - known all about the money side of things. It wasn't everybody that had the knowledge of these things back then... and as for housing benefit, maybe he had some peculiar needs as I'm sure that wouldn't have been feasible.

Thrugelmir

PasturesNew wrote: »

Being "caught in the net" of people earning more than those NOT caught in the net ... is a problem many of us would love to have.

At least with the committment to raising personal allowances there's a fairness in the system. Which one hopes ultimately will lead to everyone in full time employment achieving a livable wage.

RJP33

Tax is too high as it is and higher rates only discourage entrepreneurship and wealthy people from settling here both of which create jobs.

You might find by dropping the higher rate to 30% we'd actually end up with more in receipts.

angrypirate

Why not go more like the states - you want to a british citizen, then you have to pay UK taxes. Period. No tax, no citizenship, no passport

RJP33

Following on from that you could also get rid of the non-dom status and have all earnings taxed in the UK regardless if you want to be resident here.