What should the maximum Income Tax rate be?

Zyyb

aldredd wrote: »

your link fell victim to the swear filter?!

Try a URL shortner - that might work

It was tiny url .com (how is that a swear?!) to begin with (for twitter purposes!) I put the direct link in and that seems to work??

aldredd

works now, cheers!

gertie2011

HappyMJ wrote: »

I'd combine national insurance into the tax rate and charge everyone 40% on anything earnt above minimum wages. Minimum wages being tax free. I would then scrap national insurance, contributions based benefits and working tax credits. Someone could then earn minimum wage and get exactly the same amount of money as they do now but instead of paying tax and NI and claiming working tax credits they could just keep it all without all this money being passed back and forward.

I would also set all marginal deduction rates on benefits to 50% to encourage people to at least do some work.

If NI were to be combined with income tax as you suggest, thereby creating a higher rate of tax, then those over 65 would be hit with higher deductions than at present because they no longer pay NI. This, combined with the freezing of age-related personal allowances, would make them much worse off. In addition, those in receipt of state pensions now will not receive the flat-rate pension of £140 that has been proposed. A double whammy with frozen allowances - and then combined NI and income tax? No thanks.

Eco_Miser

Back when The Beatles wrote Taxman the top rate of tax was 19 shillings in the pound (95%). It makes all the complaints about 50% seem petty by comparison.

How about a top rate of 75%, followed by a marginal rate of just 5% for amounts over £1 million? That way the billionaires flock here and spend lots of money (and pay VAT).

ChemicalJasper

:shocked: :doh: :wall: Seriously! 50 people think that people should pay 100% tax!?!? Serioulsy! What would be the point in working hard to better yourself and earn more money? :shocked: :doh: :wall:

‎10 men go out for beers and the bill comes to £100, they decide to pay like we pay our taxes;

The first 4 men (the poorest) pay nothing.
The 5th paid £1.
The 6th paid £3.
The 7th paid £7.
The 8th paid £12.
The 9th paid £18.
And the 10th man (the richest) would pay £59.

The 10 men drank in the bar every evening and were quite happy with the arrangement, until one day, the owner said, "Since you are all such good customers, I'm going to reduce the cost of your daily beer by £20".

They still wanted to pay their bill the way we pay taxes so;

The first 4 men were unaffected, still drinking for free - But what about the other six men? The paying customers? How could they divide the £20 windfall so that everyone would get his fair share?
If they divided it by six and subtracted it, then the 5th & 6th man get paid to drink beer, so the bar owner suggested that it would be fair to reduce each man's bill by a higher percentage the poorer he was, to follow the principle of the tax system.
Now the 5th man now paid nothing.
The 6th paid £2 (33% saving).
The 7th paid £5 (28% saving).
The 8th paid £9 (25% saving).
The 9th paid £14 (22% saving).
And the 10th man now paid £49 (16% saving).

Each was better off than before, but once outside the bar, the men began to compare their savings.

"I only got a £1 out of the £20 saving," said the 6th man, “The 10th man got £10!"
"Yeah" exclaimed the 5th man. "I only saved a pound too. It's unfair - he got 10 times more benefit than me!"
"That's true!" shouted the 7th man. "Why should he get £10 back, when I got only £2? The wealthy always win!"
"Wait a minute," yelled the first 4 men, "we didn't get anything at all, this new tax system exploits the poor!"
The 9 men beat up the 10th man.

The next night the 10th man didn't show for drinks, he had gone overseas to drink where the bars are friendlier, so the first 9 sat and had their beers. When it came to pay the bill, they discovered they did not have enough money for even HALF of the bill!

stmartinsdiver

Not a very meaningful poll - I'd bet that there is generally a direct correlation between how much people are saying the maximum rate should be and their own personal income, and that the figure they choose is not something that they would expect to pay themselves.
If you make the top earners pay excessive rates they just find somewhere else to to bank their money to minimise the amount of tax they pay.
Thre's a very valid case for reducing the amount of incomev tax everyone pays, so we all have more to spend which in turn creates additional wealth, which means more tax is paid at the lower rates as people have more money to spend and companies are making more money by selling more goods.
The economy only becomes self sustaining through taxes being reduced - not increased.

stevemcol

Derran wrote: »

But who is anyone to say what greed is?

Is having more than you need greedy? In which case, everyone on this forum is greedy - we don't NEED Internet access. We don't NEED a computer. We're greedy for having one. One person's (un-needed) laptop is another person's (un-needed) Bentley.

I'm pretty sure that having a Starbucks every day is considered 'greedy' by the homeless guy begging outside on the pavement.

Equally, I'm sure that 150k/year earners see Premier League footballers wages and think 'greedy'.

Yet most people look at the Alan Sugar/Richard Branson/Theo Paphitis types and congratulate them despite their wealth. Are they 'greedy' too, or just excellent at what they do and deserving of their wealth?

It boils down to 'I wish I had that'. Anyone who calls a higher earner greedy, but who fails to donate any of their own excess cash to charity (hey, you don't need it, it excess!) is a hypocrite.

From my point of view greed in this context is not a desire to earn lots of money. It's a reluctance to pay a sensible level of afforable tax on those earnings.
I do consider my self well off, compared to the homeless guy in the street and I'm more than happy that a proportion of my tax goes into support systems to try and improve his situation. When I look at the bottom line on my paypacket, I realise that a slightly bigger tax bill wouldn't be unbearable.
Charity is a different issue and completely voluntary and personal.

I don't blame footballers etc for taking the money that is thrown at them. I certainly would. I would have a problem if they were avioding, evading or even begrudging tax.

makintracks

ChemicalJasper wrote: »

:shocked: :doh: :wall: Seriously! 50 people think that people should pay 100% tax!?!? Serioulsy! What would be the point in working hard to better yourself and earn more money? :shocked: :doh: :wall:

‎

What a good point you have. It is a long time since I last posted because someone invariably makes a nasty comment even if you are posting something useful, but I too could not believe that there are folks who actually voted for 100%, 95% etc. as a tax rate.

What a great story too. I hope that the people who voted for tax rates up to 100% may read it and think about it.

Fulham_Mark

1979.
Top tax rate = 98% (inc NI)
Top 1% of earners paid 11% of all tax

2007.
Top tax rate = 51% (inc NI)
Top 1% of earners paid 35% of all tax

So cutting the tax rate generated three times more tax.

why?
When tax shoots up people retire, leave the UK or do something more satisfying instead of their high paid jobs.

NSG666

Derren - someone else out there who thinks like me.
Chemical Jasper - saw the length of your post and thought that you were mad but I'm glad I stuck with it as you make a good point.