Ed Balls pledges to raise taxes if Labour win election

prowla

Tancred wrote: »

Again, nonsense. VAT is paid by everyone, not just the rich, and is built into the price, so you know exactly what you can afford to start with and have the option of not buying it. You are not forced to buy a VAT charged item!

Nobody said that we don't all pay VAT, did they?

But people who have more disposable income pay more VAT.

And probably for high earners most things bought would be subject to VAT.

So therefore (assuming it is spent at some point in time) of any income over that £150k mark, the government would take 50% tax + 2% NI at source, plus a further 20% VAT on purchases. Or in other words the government would take 72% of that income - ouch!

Contrast that with a lower earner (say £25k).

Of that income the government takes 20% tax + 12% NI (starting after £8k earned), and a lot of spending would be on essentials which are not subject to VAT. So, the government would take approximately 32% of their income.

Therefore, the government take would be of the order of double the money for earnings over £150k compared to someone earning £25k.

And of course, the first £150k is made up of six lots of £25k, each of which would be subject to tax too (and with no personal allowance, so income taxed in its entirety), so even before reaching that threshold and at the current rates, they would have paid over 6-10x the tax of the lower earner.

So I just don't see the validity of the argument that somebody paying up to 10x more tax isn't contributing their "fair share" and needs to be taxed even more.

And at what point does the law of diminishing returns kick in and you question whether it is worth the extra effort?

michaels

prowla wrote: »

Nobody said that we don't all pay VAT, did they?

But people who have more disposable income pay more VAT.

And probably for high earners most things bought would be subject to VAT.

So therefore (assuming it is spent at some point in time) of any income over that £150k mark, the government would take 50% tax + 2% NI at source, plus a further 20% VAT on purchases. Or in other words the government would take 72% of that income - ouch!

Contrast that with a lower earner (say £25k).

Of that income the government takes 20% tax + 12% NI (starting after £8k earned), and a lot of spending would be on essentials which are not subject to VAT. So, the government would take approximately 32% of their income.

Therefore, the government take would be of the order of double the money for earnings over £150k compared to someone earning £25k.

And of course, the first £150k is made up of six lots of £25k, each of which would be subject to tax too (and with no personal allowance, so income taxed in its entirety), so even before reaching that threshold and at the current rates, they would have paid over 6-10x the tax of the lower earner.

So I just don't see the validity of the argument that somebody paying up to 10x more tax isn't contributing their "fair share" and needs to be taxed even more.

And at what point does the law of diminishing returns kick in and you question whether it is worth the extra effort?

Does the maths work quite like that? The 20% is only charged on spending from the 48% left after tax is paid so only actually counts as about 10% of the original pre tax income...but offsetting that is 13.8% employers NI so 72% is probably pretty close in reality.

And regarding diminshing returns, even the most ardent supporter of the policy is not claiming that it will bring in enough revenue to make much odds to anything, rather that it is all about 'fairness'.

lostinrates

michaels wrote: »

And regarding diminshing returns, even the most ardent supporter of the policy is not claiming that it will bring in enough revenue to make much odds to anything, rather that it is all about 'fairness'.

Then this is very dangerous ground.

Got a houseful of healthy kids? Give the childless one!

Got a healthy body? We'll tax you a spare organ. Its only fair.

Tax because its necessary, tax where its fair too when its necessary, but things are so far from equal that muddling around the middle, which lets face it , 150 is toppish. end of middle, is not dealing with a fairness issue, its letting those of as in the middle / bottom squabble whole those who could make a difference remain here as non doms!

Tancred

prowla wrote: »

Nobody said that we don't all pay VAT, did they?

But people who have more disposable income pay more VAT.

And probably for high earners most things bought would be subject to VAT.

So therefore (assuming it is spent at some point in time) of any income over that £150k mark, the government would take 50% tax + 2% NI at source, plus a further 20% VAT on purchases. Or in other words the government would take 72% of that income - ouch!

Contrast that with a lower earner (say £25k).

Of that income the government takes 20% tax + 12% NI (starting after £8k earned), and a lot of spending would be on essentials which are not subject to VAT. So, the government would take approximately 32% of their income.

Therefore, the government take would be of the order of double the money for earnings over £150k compared to someone earning £25k.

And of course, the first £150k is made up of six lots of £25k, each of which would be subject to tax too (and with no personal allowance, so income taxed in its entirety), so even before reaching that threshold and at the current rates, they would have paid over 6-10x the tax of the lower earner.

So I just don't see the validity of the argument that somebody paying up to 10x more tax isn't contributing their "fair share" and needs to be taxed even more.

And at what point does the law of diminishing returns kick in and you question whether it is worth the extra effort?

All this is just twaddle. As I keep repeating, if you can afford to pay more, you should!

So if Mr Rich on £300k a year has a £1M executive home, two kids at private school and drives a Mercedes S class, that is entirely his choice! Nobody is forcing him to spend his money that way. He could invest it and do lots of other things.
What you are doing is needlessly complicating the issue by adding VAT into the mix - which has nothing to do with income tax. So why not add all other taxes as well, including council tax? All these other taxes are dependent on your lifestyle. They are not taken at source, and have no relevance to the discussion.

michaels

lostinrates wrote: »

Then this is very dangerous ground.

Got a houseful of healthy kids? Give the childless one!

Got a healthy body? We'll tax you a spare organ. Its only fair.

Tax because its necessary, tax where its fair too when its necessary, but things are so far from equal that muddling around the middle, which lets face it , 150 is toppish. end of middle, is not dealing with a fairness issue, its letting those of as in the middle / bottom squabble whole those who could make a difference remain here as non doms!

I neither approve nor think it is fair but I am sure it is a vote winner not because those who are not affected think that it will bring in lots of money so they can pay lower taxes or receive more benfits but because they think it is 'fair' that 'those really rich people' have a bit more taken off them.

MrRee_2

Would I be happy to pay the 50% tax to help those less fortunate than myself?

Yes, I would - as long as they genuinely are in need - I do NOT wish to pay for their chain smoking habit, their drinking habit, their drug habit OR their 6 kids!!!!

AND, yes, IF the big companies and very rich are made to pay what they should be paying!!!

So, in effect, no ... they cannot take 50% Tax off me just because I have worked hard all my life and have the rewards to show for it!

Tancred

lostinrates wrote: »

Then this is very dangerous ground.

Got a houseful of healthy kids? Give the childless one!

Got a healthy body? We'll tax you a spare organ. Its only fair.

Tax because its necessary, tax where its fair too when its necessary, but things are so far from equal that muddling around the middle, which lets face it , 150 is toppish. end of middle, is not dealing with a fairness issue, its letting those of as in the middle / bottom squabble whole those who could make a difference remain here as non doms!

£150k is definitely not the 'top end of middle'. It represents the top 1% of UK taxpayers! And it follows that those who have chosen a particular lifestyle of luxury as a result of their very high income should be asked to sacrifice some of it in times of economic hardship. What Balls is suggesting is a lot more modest than what I would advocate. In other European countries the top rate may be slightly less than 50% but it starts to bite much lower down than £150k a year.

lostinrates

Tancred wrote: »

All this is just twaddle. As I keep repeating, if you can afford to pay more, you should!

So if Mr Rich on £300k a year has a £1M executive home, two kids at private school and drives a Mercedes S class, that is entirely his choice! Nobody is forcing him to spend his money that way. He could invest it and do lots of other things.
What you are doing is needlessly complicating the issue by adding VAT into the mix - which has nothing to do with income tax. So why not add all other taxes as well, including council tax? All these other taxes are dependent on your lifestyle. They are not taken at source, and have no relevance to the discussion.

Ok, slightly different. Most of us who are not high earners have the choice to earn more, ( and by consequence contribute more ) why not take it?

lostinrates

Tancred wrote: »

£150k is definitely not the 'top end of middle'. It represents the top 1% of UK taxpayers! And it follows that those who have chosen a particular lifestyle of luxury as a result of their very high income should be asked to sacrifice some of it in times of economic hardship. What Balls is suggesting is a lot more modest than what I would advocate. In other European countries the top rate may be slightly less than 50% but it starts to bite much lower down than £150k a year.

I'm sitting in my unheated wreck of a house thinking ' this is luxury '? :rotfl:

Tancred

MrRee wrote: »

Would I be happy to pay the 50% tax to help those less fortunate than myself?

Yes, I would - as long as they genuinely are in need - I do NOT wish to pay for their chain smoking habit, their drinking habit, their drug habit OR their 6 kids!!!!

AND, yes, IF the big companies and very rich are made to pay what they should be paying!!!

So, in effect, no ... they cannot take 50% Tax off me just because I have worked hard all my life and have the rewards to show for it!

Tax is not meant to pay solely for those less fortunate etc. It's not a charity. It is used for lots of different things that the state needs to pay for, as I'm sure you are well aware despite your lunatic rant. Your reference to drug habits etc is simply idiotic.