Do You Think Income Tax Banding is Fair?

kabayiri

dori2o wrote: »

Because then that puts the burden for funding the country on those less able to contribute.

If you are privileged enough to be able to earn substantial amounts of money, then you should make the largest contribution, as it is more than likely those at the bottom who have put you into that position.

I don't think I explained myself clearly.

A formula would be based on bringing in similar revenue; just that instead of having a threshold the formula would require you paying ever smaller amounts of additional tax as your income increased.

Where is the logic in jumping from a 20% to 40% bracket by getting a £500 pay rise for example? It creates resentment.

ILW

kabayiri wrote: »

Banding isn't fair. Banding is stupid.

It introduces artificial boundaries.

What's wrong with a formula which tapers away to lower amounts the more you earn?

It's not like stamp duty though. You only pay the higher percentage on the amount over and above the threshold.

kabayiri

ILW wrote: »

It's not like stamp duty though. You only pay the higher percentage on the amount over and above the threshold.

Yeah, I agree with you. But when you hear people complain about it when it affects them, you'd almost think it were that draconian. It's a perception thing.

alinwales

When I was a kid, I awlays thought that the tax rate was the rate you paid on all of your money. I was under thedelusion that someone was stupid to get a payrise that took them from a 20% rate to a 40% rate, as they'd be paying twice as much tax and therefore take home less.

Now, I obviously know better, but it always seems to me that higher earners are always whinging about paying 40% and how they're not able to live on their take-home when in fact they are still better off than the majority. If you earn £1000 over the 40% threshold, that's an extra 200 in tax on top of what you were already paying.. but wait a second, NI goes down by 10%, so in reality it's an extra £100 for every grand you earn. Big deal.

I support combining IT and NI and making it more progressive as pay increases. I also believe in taxing the super-rich by more. However I also believe that those not in work should not be given an easy life (not that I'm suggesting that they all have that).