What should the maximum Income Tax rate be?

happyinflorida

Why have so many people answered the vote that people should pay 100% of what they earn in tax?!! That's silly - you'd have no money left to live, so what's the point?! I can see one or two people being silly but as many as 145 so far seems downright ludicrous. Wish people would answer these votes properly and not just muck around.

shropshirelady

If income tax was lowered it would perhaps stop people wanting to avoid or evade it thereby bringing in much more tax than high rates do. Everyone would then have more money in their pockets to spend and bring in more VAT/business taxes etc. More jobs created so even more tax.

I'm not rich by any means and my pension won't even reach my personal allowance this year but, as someone else pointed out, higher paid people are already paying more than lower paid and they need to be encouraged to keep their money in this country rather than off shore.

MothballsWallet

I still think there should be a super-high rate for celebrities and sports stars (eg footballers) who have endorsement deals - after all, what extra work do they do for that money? Just wear and talk up the product(s) in question. That's about it (from the outside).

So why shouldn't they pay a higher rate on that money because they've done very little extra to earn it?

The tax system should allow people to be rewarded for actual work that benefits them and others, not for promoting brand X over brand Y for whatever reason(s) (including the endorsement deal).

Pantera_Fan

koshain wrote: »

The tax should percentage should be standard for all regardless of what they earn

Completely agree. This is the only true fair way.

Rajeev

Very good analogy!!! If it were up to me, I will publish in the newspaper.

One other thing I want to bring to people's notice that the rich peopledo not pay income tax!!!!! Only the normaly middle class people doing jobs pay income tax.

All rich people setup companies to receive their incomes, then pay themselvers, their partner, their grown up childrens basic salary at low tax rate. They then transform rest of their income as capital gains (10k TAX free and rest at 18% TAX . . I don't think many middle class people use this allowance) and Dividends at lower tax rates.

http://www.hmrc.gov.uk/rates/cgt.htm
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnSavingsAndInvestments/DG_4016453

So focusing on pure income tax will only influence salaried employees and not rich people who typically receiver their income via their own limited company.

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:

‎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!

MartinWickham

Derran wrote: »

But who is anyone to say what greed is?

You could start with those who have had the fortunate opportunity to be able to generate exponential income values, but bleat they should only pay tax at the same percentage proportion as lower earners.

There is no reason why high earners should not get the advantage of the personal tax allowance and the same lower tiers of tax that everyone else pays on their lower income. The higher tax tiers only become effective for income above the very generous limits of the lower tiered earnings.

Whatever ‘entrepreneurs’ think of themselves, it is primarily aberrations resulting from the extensive infrastructure of our country and economy that always allows some select group of individuals to monopolise the financial opportunities available. We might hear fewer accusations of greed and jealousy, and less justified resentment of their greed, if these individuals were more forthright in repaying exponentially for the tremendous advantage that has been afforded them. They would still be able to enjoy very exceptional wealth.

Rajeev

Entrepreneurs do not pay income tax like normal salaried people. The director's salaries are not even 10% of their real earnings/profits! They make money by selling shares of their successfull companies and paying 18% tax on the profit! The 18% is the MAX a rich person will pay, they would rather pay the accountant some more money that increasing their tax burden!

MartinWickham wrote: »

You could start with those who have had the fortunate opportunity to be able to generate exponential income values, but bleat they should only pay tax at the same percentage proportion as lower earners.

There is no reason why high earners should not get the advantage of the personal tax allowance and the same lower tiers of tax that everyone else pays on their lower income. The higher tax tiers only become effective for income above the very generous limits of the lower tiered earnings.

Whatever ‘entrepreneurs’ think of themselves, it is primarily aberrations resulting from the extensive infrastructure of our country and economy that always allows some select group of individuals to monopolise the financial opportunities available. We might hear fewer accusations of greed and jealousy, and less justified resentment of their greed, if these individuals were more forthright in repaying exponentially for the tremendous advantage that has been afforded them. They would still be able to enjoy very exceptional wealth.

MartinWickham

ChemicalJasper wrote: »

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

I might be going out on a limb here, though I appreciate the commendable detail of the analogy, but the richest in the UK are paying nowhere near 59% income tax. More pertinently, I presume the bar is, like the UK, £1,000,000,000 in debt, so the bill would be £20 higher, not lower.

Perhaps I'll understand if I sober up with another pint.

samhale

My economics lecturer says the optimum tax for the highest band is 53.5%. Any more and people move away to havens, and any less, less money is collected.

This move from 50% to 40% is entirely for personal reasons - nothing for the benefit of this country at all.

HappyMJ

MartinWickham wrote: »

I might be going out on a limb here, though I appreciate the commendable detail of the analogy, but the richest in the UK are paying nowhere near 59% income tax. More pertinently, I presume the bar is, like the UK, £1,000,000,000 in debt, so the bill would be £20 higher, not lower.

Perhaps I'll understand if I sober up with another pint.

They might not pay 59% income tax but they [STRIKE]do[/STRIKE](should) pay 50% income tax 2% national insurance 20% VAT on most purchases, council tax, road tax, tv licence, fuel duty, stamp duty, insurance premium tax etc etc...It would probably add up to 59%.