MSE News: Budget 2012: Top rate tax to fall to 45%

Randvegeta

Even 40% is way too high. At 40%, the super wealthy have a very large incentive to try and avoid taxes, especially when you take things like NI contributions into consideration.

Plenty of places where the super wealthy can go and pay much less (less than 20%). As a percentage paying less than your AVERAGE middle class Brit!

Heck 20% of 1,000,000 is better than 50% of 0 :-P.

There should be some new policies to provide tax incentives to those who CAN leave with little or no tax incentives for those who cant.

For example!

If you are a software designer, work in international finance, or do anything which you can do ANYWHERE else, the the tax should be LOW!

If you are into retail, or anything where your income depends on domestic earnings, then tax should be HIGH!

Basically, non UK source income should be taxed low, and UK source income can be taxed whatever.

If people want to make money in the UK FROM the UK economy, then sure, high taxes work out just fine. After all, in this case it was the UK that made them so wealthy right? On the other hand, if you're dealing with exports, making large amounts of money from overseas, why tax that? You want MORE of those people to come to Britain and get MORE foreign business.

Randvegeta

CLAPTON wrote: »

I can predict though that in a few years the 'fact' that higher rate of tax was 'proven' to be ineffective will lead George's mates to demand a reduction of the 40% tax rate.

I certainly HOPE so!

CLAPTON

Randvegeta wrote: »

Even 40% is way too high. At 40%, the super wealthy have a very large incentive to try and avoid taxes, especially when you take things like NI contributions into consideration.

Plenty of places where the super wealthy can go and pay much less (less than 20%). As a percentage paying less than your AVERAGE middle class Brit!

Heck 20% of 1,000,000 is better than 50% of 0 :-P.

There should be some new policies to provide tax incentives to those who CAN leave with little or no tax incentives for those who cant.

For example!

If you are a software designer, work in international finance, or do anything which you can do ANYWHERE else, the the tax should be LOW!

If you are into retail, or anything where your income depends on domestic earnings, then tax should be HIGH!

Basically, non UK source income should be taxed low, and UK source income can be taxed whatever.

If people want to make money in the UK FROM the UK economy, then sure, high taxes work out just fine. After all, in this case it was the UK that made them so wealthy right? On the other hand, if you're dealing with exports, making large amounts of money from overseas, why tax that? You want MORE of those people to come to Britain and get MORE foreign business.

somewhat extreme views
so the poor and trapped should be exploited and the rich and mobile pay nothing towards their keep


a little like france in 1789

be careful what you wish for.

Randvegeta

CLAPTON wrote: »

somewhat extreme views
so the poor and trapped should be exploited and the rich and mobile pay nothing towards their keep


a little like france in 1789

be careful what you wish for.

How is this exploitation of the poor and trapped?

The point is, if taxes are not competitive for the rich and mobile, they have huge incentives to leave.

Like me. I'm not rich, but I am extremely mobile. I can live and work just about anywhere so I will choose NOT to live in the UK so to avoid paying high taxes.

If my money was earned in the UK, that would be different. But it's not.

There are a number of benefits of having rich people in the UK besides income tax collection.

They spend money, pumping money into the economy. And that is money that would not otherwise be in the economy since it came from overseas!

VAT paid on goods/services purchased.

Council tax on the properties they live in.

Larger deposits in the bank.

None of which is achieved by driving them away.

And I do not see how it is exploiting the poor even if you were to tax them. Otherwise, do you consider the current system to be exploiting the rich? (Actually I do)

CLAPTON

Randvegeta wrote: »

How is this exploitation of the poor and trapped?

The point is, if taxes are not competitive for the rich and mobile, they have huge incentives to leave.

Like me. I'm not rich, but I am extremely mobile. I can live and work just about anywhere so I will choose NOT to live in the UK so to avoid paying high taxes.

If my money was earned in the UK, that would be different. But it's not.

There are a number of benefits of having rich people in the UK besides income tax collection.

They spend money, pumping money into the economy. And that is money that would not otherwise be in the economy since it came from overseas!

VAT paid on goods/services purchased.

Council tax on the properties they live in.

Larger deposits in the bank.

None of which is achieved by driving them away.

And I do not see how it is exploiting the poor even if you were to tax them. Otherwise, do you consider the current system to be exploiting the rich? (Actually I do)

as I understand you...

so two people
same salary
same age
same level of education
same number of children
same general level of health
etc etc

if one has a job that is broadly restricted to the UK he should pay more tax than the person who could work abroad?


at least it would create a hugh number of government jobs who would evaluate 'mobility' and lots of work for lawyers to argue the matter in court

Randvegeta

CLAPTON wrote: »

as I understand you...

so two people
same salary
same age
same level of education
same number of children
same general level of health
etc etc

if one has a job that is broadly restricted to the UK he should pay more tax than the person who could work abroad?


at least it would create a hugh number of government jobs who would evaluate 'mobility' and lots of work for lawyers to argue the matter in court

Basiclly, yes!

Give tax breaks to industries that are not location dependant. Tough luck if you happen to work in an industry that isn't 'mobile'.

As for the paperwork/beuracracy involved, it shouldn't be a problem since it is basicly done already. Certain jobs/industries are singled out to be taxed/regulated. So that argument is a bunch of rubbish.

Tax rates for the lower/middle classes are not THAT high any way. So this would generally apply only to very high earners. 20%, people can live with. It is quite competitive.

40%, people start thinking they are working more for others than they are themselves. And let's face it. In most cases, the more money you earn, the more choice you have.

Randvegeta

Let me put it this way.

Imagine I am a software developer. I am 'self employed' and my customers are based internationally with little or no business coming in from UK clients. I make 100K /yr from my software. I am a British citizen and have the right to live and work in any EU country as well as a number of low tax juristictions around the world.

Imagine a shop owner. He sells retail goods in his local town. He depends on local people buying his goods to make a living. A man who lives off the local community. He too earns 100K /yr and is a British citizen. Unfortunatly, he cannot sell his goods in other countries because it is his local community that demands his goods. He would not be able to do his work living abroad.

So you have 1 person who brings in 100k /yr IN to the country, making the country as a whole wealthier. And you have another who makes money off his local community.

Which is better for the country?

If I have the choice of paying 40% here, or 15% in Lithuania for example, guess which one I will choose?

I feel I have no responsibility to my 'local community' since they gave nothing to me. I have nothing to give back.

On the other hand, Bob has been made succesful because of his local community. He SHOULD give back!

CLAPTON

Randvegeta wrote: »

Let me put it this way.

Imagine I am a software developer. I am 'self employed' and my customers are based internationally with little or no business coming in from UK clients. I make 100K /yr from my software. I am a British citizen and have the right to live and work in any EU country as well as a number of low tax juristictions around the world.

Imagine a shop owner. He sells retail goods in his local town. He depends on local people buying his goods to make a living. A man who lives off the local community. He too earns 100K /yr and is a British citizen. Unfortunatly, he cannot sell his goods in other countries because it is his local community that demands his goods. He would not be able to do his work living abroad.

So you have 1 person who brings in 100k /yr IN to the country, making the country as a whole wealthier. And you have another who makes money off his local community.

Which is better for the country?

If I have the choice of paying 40% here, or 15% in Lithuania for example, guess which one I will choose?

I feel I have no responsibility to my 'local community' since they gave nothing to me. I have nothing to give back.

On the other hand, Bob has been made succesful because of his local community. He SHOULD give back!

we will be well rid of you

Randvegeta

CLAPTON wrote: »

we will be well rid of you

I'm sure you will :-).

It's attitudes like that that harm this country.

I love the UK. I am of the UK. But I'm not going to contribute to this benefit ridden, 'entitlement' society.

I'm sure most reasonable human beings will agree than 20% of somthing, is better than 50% of nothing. If you honestly believe the wealthy should go, good luck paying for all those public services you enjoy so much.

Just a quick maths lesson for you.

A person earning 1M pays 501.5k in income tax and national insurance. 638.5k if you take employers national insurance into consideration.

A person earning 25k (roughly the UK median) would pay just 5.5k in income tax and national insurance. Around 8k if you take employers national insurance into consideration.

For every million pound earner that leaves the UK, you need roughly 80 average earners to cover the lost tax revenue.

So yeah, it'sVERY SMART to drive the rich away. I sincerely hope it makes you feel better when/if it happens.

Randvegeta

Oh and lets not forget the 500k that millionair would have been spending/saving in the UK. That will head off to another country too I guess.

You could earn 600k in Hong Kong and still be 60k better of than you would in the UK, despite being paid 40% less. Doesn't seem very competitive to me.