Confused - is tax free allowance monthly??

CLAPTON

pjread wrote: »

I'd guess finance intern rather than tech. Certainly a decent top-up for a student, and comes with a free lesson in "NI is a bit of a con"

Really don't understand why we deal with NI as if it isn't just income tax. Actually, I think all tax should be on expenditure (like VAT) as it'd make evasion far harder and allow you to e.g. tax more on luxury goods than staples. But I'll get off that soapbox now, it's too early.

presumably we would be looking at VAT at round 50% or more?

this would create about 50 million criminals would would support the smuggling gangsters, corrupt police and politicians given the huge profits to be made

prohibition would be a picnic by comparision

jamesml

pjread wrote: »

I'd guess finance intern rather than tech. Certainly a decent top-up for a student, and comes with a free lesson in "NI is a bit of a con"

Really don't understand why we deal with NI as if it isn't just income tax. Actually, I think all tax should be on expenditure (like VAT) as it'd make evasion far harder and allow you to e.g. tax more on luxury goods than staples. But I'll get off that soapbox now, it's too early.

Definitely not a finance intern either - I work in finance, I guarantee you they aren't getting paid £5k as an intern!

Tax on expenditure would be insane, it would have way too many inflationary knock ons, the majority of earned income is not spent on products which you could collect a tax on, and all you end up doing is pushing more onus on business to collect the governments tax for them.

It would be interesting to see the impact that this would actually have as well - there are a considerable number of 'poorer' people who have low incomes but can spend out on huge TV's etc, which are arguably more of a luxury product than an essential. Would a 'rich' person get texed at 175% of the price of a 50" TV, and a 'poor' person get taxed at 75% of the price, or is it not means tested? After all, there are a finite number of TV's any one house needs despite how rich you are, so this wouldn't do very well in improving tax collections - arguably this would worsen the divide between rich and poor even more! Plus if you are well off, you may have more of your income going into savings rather than on expenditure, so how do you tax that?

grey_gym_sock

i think we've covered why only taxing expenditure wouldn't work.

OTOH, merging NI and income tax is possible. it could be a real simplification, if done well. (or make tax even more complicated, if done badly.)

pjread

[QUOTE=jamesml;[URL="tel:63757923"]63757923[/URL]]

It would be interesting to see the impact that this would actually have as well - there are a considerable number of 'poorer' people who have low incomes but can spend out on huge TV's etc, which are arguably more of a luxury product than an essential. Would a 'rich' person get texed at 175% of the price of a 50" TV, and a 'poor' person get taxed at 75% of the price, or is it not means tested? After all, there are a finite number of TV's any one house needs despite how rich you are, so this wouldn't do very well in improving tax collections - arguably this would worsen the divide between rich and poor even more! Plus if you are well off, you may have more of your income going into savings rather than on expenditure, so how do you tax that?[/QUOTE]
Flat based on the good not flat or means tested (i.e. by category - like how chocolate coated biscuits get 17.5% VAT but a digestive is 0%. Maybe up to 22" TV's are 0%, 22-32" TV's are 17.5%, 32-47 are 35% and 55"+ are 70%). If you earn 100k but commute 6 hours a day, have 9 kids and live on beans on toast - should you really pay more tax than the couple on 50k each living the life of Riley?

I'm not saying "this is definitely the final solution", but a lot of money is spent in the country that isn't (for tax purposes) earned here. And where it is, it's easier to avoid the more you have.

Maybe savings get their own 'income tax' - they already have their own rate for non-earners for cash, and CGT may be rebalanced for non-cash. Inflationary pressures should be broadly balanced by the increased take-home most 'normal' people see (presumably near-zero on stuff you need to live to 70%+ on things like snuff, smoking jackets and caviar - but averaging around 50% or so)

grey_gym_sock

differential VAT rates for ordinary/luxury goods are a possible idea.

entirely replacing income tax / NI with VAT is complete insanity. for a start, remember that ppl with very high incomes, who pay most of the income tax take, spend a much smaller proportion of their incomes. and could easily choose to do much of their spending outside the country. there is simply no way you would replace the revenue lost from income tax.

it would also be very regressive. ppl on low incomes pay very little income tax or NI, but lots of indirect taxes.