Reduction in top, 50%, rate of tax?

Pennywise

zagfles wrote: »

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.

Yes, I've been suggesting that kind of thing for years. Everything would be so much simpler. There'd be a massive reduction in bureaucracy as you can't really get simpler than paying a fixed amount to everyone, regardless of their income/savings, etc., and at the same time, tax ALL income for everyone at the same rate with no allowances nor reliefs. The savings in administration alone would be billions. It would immediately stop all the tax-traps and high marginal tax rates which is the major disincentive.

hermante

Randvegeta, I completely agree with you. Being a "global" person opens your eyes a bit, doesn't it? I'm not jealous of any banker who earns a big bonus. If you didn't see the so-called recession coming, if you believed that house prices going up and up meant that you were actually getting richer, then you only have yourself to blame.

Pennywise wrote: »

Yes, I've been suggesting that kind of thing for years. Everything would be so much simpler. There'd be a massive reduction in bureaucracy as you can't really get simpler than paying a fixed amount to everyone, regardless of their income/savings, etc., and at the same time, tax ALL income for everyone at the same rate with no allowances nor reliefs. The savings in administration alone would be billions. It would immediately stop all the tax-traps and high marginal tax rates which is the major disincentive.

Why tax incomes at all? Do you realise how much money, trees and effort is wasted by everyone needing to record all their income, and to audit people?

I support 2 Lib Dem ideas - the mansion tax and the personal allowance being at the full time worker's minimum wage. The second is useful temporarily, but ultimately should be replaced with a citizen's income. The first is probably unpopular on this board because many people in this country seem to be obsessed with owning their own home whatever the cost. Paying a mortgage appears to be many people's goal in life.

Obviously, all taxes would be abolished before being replaced with this "mansion tax". Things like fuel duty, VAT and tobacco duty might need to be reduced slowly. I would revalue every property and then charge the council's business rates through the council tax system. Unlike income tax, this is impossible to avoid - don't pay and the government takes over your house. This applies to commercial landlords, as rich people use property to avoid taxes, more than homeowners.

If you can't afford to pay, then you have to reveal details of your income to the government and can then be means-tested. If you have problems budgeting, pay by PAYE. If your total tax burden is worse off than it was on the old system, then you pay the old taxes for a few years, and then as everyone WILL be better off, you can afford a bit more tax. Alternatively, you can move to a house which you can actually afford rather than just on paper. Old pensioners with no income can defer the tax to their estate and beneficiaries, as they would no longer need to pay inheritance tax.

To me, this is a bit like flying first class. Would you rather pay £3000 for an F ticket or £500 for a Y ticket and have £2500 to spend when you arrive? Likewise, why pay £300000 (incl interest) for a house that isn't yours for 30 years, when you can get one for £50000 to call your own? If you don't want to stay there, rent it out and rent a bigger house while you are earning. Then you have £100000 extra to spend when you retire.

Randvegeta

hermante wrote: »

Randvegeta, I completely agree with you. Being a "global" person opens your eyes a bit, doesn't it? I'm not jealous of any banker who earns a big bonus. If you didn't see the so-called recession coming, if you believed that house prices going up and up meant that you were actually getting richer, then you only have yourself to blame.



Why tax incomes at all? Do you realise how much money, trees and effort is wasted by everyone needing to record all their income, and to audit people?

I support 2 Lib Dem ideas - the mansion tax and the personal allowance being at the full time worker's minimum wage. The second is useful temporarily, but ultimately should be replaced with a citizen's income. The first is probably unpopular on this board because many people in this country seem to be obsessed with owning their own home whatever the cost. Paying a mortgage appears to be many people's goal in life.

Obviously, all taxes would be abolished before being replaced with this "mansion tax". Things like fuel duty, VAT and tobacco duty might need to be reduced slowly. I would revalue every property and then charge the council's business rates through the council tax system. Unlike income tax, this is impossible to avoid - don't pay and the government takes over your house. This applies to commercial landlords, as rich people use property to avoid taxes, more than homeowners.

If you can't afford to pay, then you have to reveal details of your income to the government and can then be means-tested. If you have problems budgeting, pay by PAYE. If your total tax burden is worse off than it was on the old system, then you pay the old taxes for a few years, and then as everyone WILL be better off, you can afford a bit more tax. Alternatively, you can move to a house which you can actually afford rather than just on paper. Old pensioners with no income can defer the tax to their estate and beneficiaries, as they would no longer need to pay inheritance tax.

To me, this is a bit like flying first class. Would you rather pay £3000 for an F ticket or £500 for a Y ticket and have £2500 to spend when you arrive? Likewise, why pay £300000 (incl interest) for a house that isn't yours for 30 years, when you can get one for £50000 to call your own? If you don't want to stay there, rent it out and rent a bigger house while you are earning. Then you have £100000 extra to spend when you retire.

I like this . Not sure if a country can really earn enough money without income tax, unless you're like an oil nation... but low taxes certainly, and with a generous personal allowance!

And yes, I am all for giving incentive to work, and disincentive to live off the state. And yes, if people cant afford to live somewhere, they shouldn't live there.