Taxation. Would it make sense to...

danothy

N1AK wrote: »

But this is just further proof of the inability to properly define should. Many people have no issue with 'cash in hand' work etc. Many people are against speed enforcement. So saying you 'should' pay tax or 'should' follow the speed limit is no more correct than saying those who can 'should' pay more tax. They are all based on individual decisions.

There is no formal standard for the consensus required to use 'should' and none of the use it has been put to in this thread is inherently wrong.

Well, the law only exists to be obeyed, it has no other purpose. If there's a question about a law the 'should' aspect is whether or not it should exist rather than whether or not it should be obeyed, but again, that meta debate is subjective. That's the kind of debate taxation provokes, pertaining to the high level concept.

Sharply defined or not, 'should' indicates causation. There's only subjective arguments for particular forms of taxation, I don't see how it can be used correctly in any subjective context as it implicitly (and unjustifiably) elevates an opinion to a fact.

Eellogofusciouhipoppokunu

JimmyTheWig wrote: »

I think they should because they are able to.
I think that's how a society should work.
If I am on a train and a pregnant woman gets on then I think I should (and I do) give up my seat for her. I am more able to stand for the journey than she is, so I should stand.
If I go shopping with my children then I should (and, again, I do) carry most of the weight of the shopping. Because I am more able to do so.

It's hard these days to know when a woman is pregnant or merely fat. I'd much rather see a pregnant woman stood up on a train then a fat woman sat down, crying.

However, I'm not sure how your public spiritedness justifies people paying tax on expenses when they have already paid VAT at 20%. Would you also insist that everyone else pays extra on their expenses? Our weekly food shop is expensive enough without adding an extra 2% on top. Sorry, but I just don't see any logic behind your idea.

JimmyTheWig

danothy wrote: »

I would prefer it to be worded something like "Based on reasons of compassion/ethics/morality/justice, I believe that [it is appropriate for the rich to] pay more tax."

Unless I've missed the point, using "appropriate for" is not really any different to using the word "should". In both cases it is a statement of belief - but you've established that by saying "I believe".

Eellogofusciouhipoppokunu

The rich do pay more taxes than the poor. Even if we had a flat 20% tax rate, the rich would still pay more tax than the poor. It's basic mathematics. 20% of £20k is £4k in tax, 20% of £100k is £20k in tax.

With the 40% tax threshold the rich have a multiple twice as large as the poor but they are at least keeping 60% of their pay and working for themselves.

With a threshold above 50%, the rich are working more for the state than they are for themselves and who would happily accept that?

JimmyTheWig

Eellogofusciouhipoppokunu wrote: »

The rich do pay more taxes than the poor. Even if we had a flat 20% tax rate, the rich would still pay more tax than the poor. It's basic mathematics. 20% of £20k is £4k in tax, 20% of £100k is £20k in tax.

With the 40% tax threshold the rich have a multiple twice as large as the poor but they are at least keeping 60% of their pay and working for themselves.

With a threshold above 50%, the rich are working more for the state than they are for themselves and who would happily accept that?

I'm not (in this thread, at least!) saying that we should increase the higher rate of tax.

But what you say about the rich paying more than the poor is only true if in both cases their real income was declared to HMRC. Generally for workers on PAYE (low-paid and higher-paid ones) this will be the case. But it is widely documented that many on higher incomes use workarounds to declare a lower income than they really get.

The_White_Horse

i have a lot of friends who run their own businesses. they all magically get paid a salary in the basic rate. Yet get very large dividends which is not taxed as highly as the higer rate of income tax.

i think this is what needs to be looked at severely. also, hiring wives and family members to reduce your salary. why pay yourself £60k when you can pay yourself £30k and your wife £30k and both pay basic rate tax.

Its a massive fiddle.

Pennywise

The_White_Horse wrote: »

i have a lot of friends who run their own businesses. they all magically get paid a salary in the basic rate. Yet get very large dividends which is not taxed as highly as the higer rate of income tax.

i think this is what needs to be looked at severely. also, hiring wives and family members to reduce your salary. why pay yourself £60k when you can pay yourself £30k and your wife £30k and both pay basic rate tax.

Its a massive fiddle.

Both classic cases of where the existing law doesn't allow it and it's simply HMRC not doing their job properly.

In the former, there's IR35 which in theory at least would make the limited company pay tax/NIC "as if" the person was employed rather than pretending to be self employed - see the recent BBC and senior civil servants fiasco where clearly HMRC have taken their eye off the ball.

Anyway, even for "legitimate" self employment, the tax is actually remarkably similar - the "savings" are because there's currently no NIC on dividends as NIC is only on payroll at the moment. I'd personally welcome adding NIC to all taxable income but no doubt that would get all those living on unearned income hot under the collar, i.e. buy to letters, pensioners, etc who currently enjoy a lower "tax" rate (i.e. tax and NIC) than workers which seems completely crazy to me - i.e. penalise the workers!

In the latter, the spouse or family member actually has to work an appropriate number of hours in order to justify the amount paid to them. There are loads of cases where HMRC have tackled and won blatant tax evasion, but again, they're not properly investigating these days.

HMRC have all the legislation they need to tackle the blatant abuse and evasion - for some reason, they seem incompetent to actually do it.

Eellogofusciouhipoppokunu

JimmyTheWig wrote: »

I'm not (in this thread, at least!) saying that we should increase the higher rate of tax.

But what you say about the rich paying more than the poor is only true if in both cases their real income was declared to HMRC. Generally for workers on PAYE (low-paid and higher-paid ones) this will be the case. But it is widely documented that many on higher incomes use workarounds to declare a lower income than they really get.

Which takes us back to the point that people need to feel that they are working for themselves and their families instead of the state and a load of loafers.

Higher paid people who are not on PAYE are running companies and using perfectly legal means to manage their money. No different from you having an ISA, contributing to a pension, having national savings certificates or using your capital gains allowance correctly.

I assume that you use none of these tax efficient schemes?

danothy

JimmyTheWig wrote: »

Unless I've missed the point, using "appropriate for" is not really any different to using the word "should". In both cases it is a statement of belief - but you've established that by saying "I believe".

It's the difference between expressing an opinion as an opinion and expressing an opinion and not labelling it as such.

Saying you think something is appropriate or the best way to do something (and why) is different to blanket statements that imply that there is a deterministic right and wrong state of affairs. Saying you think something is best or appropriate is an opinion, saying something 'should' be a certain way implies a fundamental truth that does not exist.

JimmyTheWig

Eellogofusciouhipoppokunu wrote: »

Higher paid people who are not on PAYE are running companies and using perfectly legal means to manage their money. No different from you having an ISA, contributing to a pension, having national savings certificates or using your capital gains allowance correctly.

I assume that you use none of these tax efficient schemes?

My point is that if the rules mean that higher paid people are paying less tax than lower paid people then (I believe that) the rules should be changed.