Reduction in top, 50%, rate of tax?

Randvegeta

zagfles wrote: »

Or they might go and do the same job in another country where tax rates are lower, pay tax to a foreign govt, not to mention VAT, and spend their money supporting their economy instead of ours. I could do my job anywhere in the world.

Besides which the marginal withdrawal rates to an unemployed person getting a job is far higher than 50%, so the same applies to the unemployed person being incentivised to do the work.

I think both points are valid depending on the circumstances.

The thing is, I would imagine anyone in the higher tax bracket, who is disincentivised to work because they would not be the primary benefactor could not easily give up their work for someone else to do. In which case, I hardly doubt any potential replacements would be on the dole any way.

One situation comes to mind. While spending time in Portugal, I learned that jobs were scarce and those with jobs, normally had multiple jobs. They probably didn't NEED multiple jobs but they just wanted a better standard of living. Could those 2nd and 3rd jobs have been given to someone with NO job and taken said person off benefits? Probably, but it seems unlikely to be the case with any highly paid, high profile jobs.

Oh yes, I too can work anywhere, so I have a great incentive to take my work to a low tax jurisdiction. Not to mention, if working abroad, not only could I cut my charges (because of lower income/corporate tax), the whole VAT issue means even if I charged my clients at the same rate, they would still make a 20% saving! Not sure how this is relevant exactly but it's interesting none the less. Unless you are Le Loup. Some how I think he would consider this tax evasion... :P

zygurat789

Randvegeta wrote: »

I think both points are valid depending on the circumstances.

The thing is, I would imagine anyone in the higher tax bracket, who is disincentivised to work because they would not be the primary benefactor could not easily give up their work for someone else to do. In which case, I hardly doubt any potential replacements would be on the dole any way.

One situation comes to mind. While spending time in Portugal, I learned that jobs were scarce and those with jobs, normally had multiple jobs. They probably didn't NEED multiple jobs but they just wanted a better standard of living. Could those 2nd and 3rd jobs have been given to someone with NO job and taken said person off benefits? Probably, but it seems unlikely to be the case with any highly paid, high profile jobs.

Oh yes, I too can work anywhere, so I have a great incentive to take my work to a low tax jurisdiction. Not to mention, if working abroad, not only could I cut my charges (because of lower income/corporate tax), the whole VAT issue means even if I charged my clients at the same rate, they would still make a 20% saving! Not sure how this is relevant exactly but it's interesting none the less. Unless you are Le Loup. Some how I think he would consider this tax evasion... :P

Only if your clients are not VAT registered, if they are then it would make only a small cash-flow difference

Randvegeta

zygurat789 wrote: »

Only if your clients are not VAT registered, if they are then it would make only a small cash-flow difference

That is true, but there are a number of small/startup businesses that are not VAT registered.

I can think of 1 interesting example in the hosting industry.

A company called WHMCS (based in the UK) sells it's software with the 20% VAT added to all EU customers. To NON EU customers, not tax is added. Since the vast majority of the software users are extremely small, 1 man type businesses, it is unlikely they will be vat registered and therefore will have to pay the 20% extra.

Given the added cost, the small customers may choose to go elsewhere to find cheaper solutions. Of course they can get around this little problem by buying the license from a non-eu distributor.

zygurat789

Randvegeta wrote: »

That is true, but there are a number of small/startup businesses that are not VAT registered.

I can think of 1 interesting example in the hosting industry.

A company called WHMCS (based in the UK) sells it's software with the 20% VAT added to all EU customers. To NON EU customers, not tax is added. Since the vast majority of the software users are extremely small, 1 man type businesses, it is unlikely they will be vat registered and therefore will have to pay the 20% extra.

Given the added cost, the small customers may choose to go elsewhere to find cheaper solutions. Of course they can get around this little problem by buying the license from a non-eu distributor.

That is a false conclusion and, in my experience a wrong one.
Whether or not to register for VAT depends largely on customers, not on how many people operate the business

Gas_Powered_Toothbrush

Randvegeta wrote: »

Selfish? Why should the hard working lose 50% + so the lazy can benefit?

Aww, that's sweet, you still think the amount someone gets paid is based mostly on how hard they work.

Now if you'll excuse us, grown-ups are talking here. So how about you come back when you have an adult opinion?

John_Pierpoint

Yes but for some people the amount they don't get paid may be based on how hard they don't work and don't save and don't try to invest in their future.

Just look round the world and ask yourself, what differentiates societies with relatively wealthy economies from the basket cases.

Randvegeta

Gas_Powered_Toothbrush wrote: »

Aww, that's sweet, you still think the amount someone gets paid is based mostly on how hard they work.

Now if you'll excuse us, grown-ups are talking here. So how about you come back when you have an adult opinion?

Actually I think it is unfair for everyone.

Working for minimum wage grants a person a similar standard of living as someone who lives off the dole.

If working hard achieves no substantial benefit, why bother working at all?

And I am pretty sure there is a correlation between how hard someone works, and how much they get paid. And this goes throughout life. You work hard early, get a decent education etc. It opens new doors for you. If you disagree, why does anyone bother working hard to get a decent education?

If I had to guess, you probably consider yourself a hard worker with low pay, OR, a lucky SOB who gets HIGH pay with little work.

Perhaps this has nothing to do with the 50p tax rate, but let me put it another way.

Why should the wealthy part with 50% of their hard earned income? Because they can afford it? It is possible to live on minimum wage is it not? So anyone who earns double + minimum wage can afford to pay 50%, why don't they do that? A fixed percentage would mean the wealthy pay far more in taxes than the poor/unemployed. And it likely makes them ineligible for many benefits.

I cannot be the only one, but I have no incentive to bring my business, or start a new business to this country. Currently, my business pays tax only for income arising or derived from the country of which it is registered. All overseas income, for work done / services rendered overseas, is tax free. Money gets pumped into the country and who's going to say that's not a good thing?

Why should I bring my existing or new businesses to the UK? What is my incentive? And lets go full circle and back to the 50p rate. I work to succeed. If I do succeed, through my own hard work, why should I then be punished with a hard slap in the face?

If you think you don't earn enough, work harder!!!

Gas_Powered_Toothbrush

Randvegeta wrote: »

A fixed percentage would mean the wealthy pay far more in taxes than the poor/unemployed.

Jesus Christ, you actually went down the route of flat tax.

I refer you to my earlier point about adult opinions.

Randvegeta

Gas_Powered_Toothbrush wrote: »

Jesus Christ, you actually went down the route of flat tax.

I refer you to my earlier point about adult opinions.

Do you have a real argument? Or are you simply trolling? If you want to debate like an adult, then I am all for a real discussion. But why make comments like this? Seems to serve no purpose other than to 'inflame'. Much like Le Loup :P

What is wrong with flat tax? It works in other places.

I believe I read somewhere that the top 5% of the country make up for 50% of the tax revenue. Yet they still only account for 5% of the vote, and have little to no benefit provided by the state.

Other countries opperate with lower tax, and in some cases, NO tax. And they do so providing all the services the UK provide, without any debt. So perhaps it is YOU who should get an adult opinion, before slagging off others on the forum simply to inflame.:rotfl:

zagfles

A flat rate of tax, combined with a "Citizen's income" (a non means tested payment everyone gets) would be the fairest thing. Then the marginal withdrawal rate for everyone will be exactly the same, as would incentives.

The tax rate would have to be quite high (maybe 40%), and the CI would be set at a level which gives everyone just enough to live on, but not an amount people would really want to live on. A lower rate of CI for kids, and premiums for disabilities and maybe adjustments for local housing costs. But income has no effect whatsoever on CI.

Anyone unemployed getting a low paid job would be significantly better off, and incentives for mid-income people doing more would reduce, or second earners in a household, so there'd be a fairer spread of jobs.