Budget - raise more revenue?

PaulF81

They should reduce the benefits cap to the average net salary.
, rather than gross.

grizzly1911

Thrugelmir wrote: »

Average tax payer will receive no tax benefit from investing in a strocks and shares ISA as they don't invest in the right things.

Bond income?

Higher rate tax on dividend income?

CGT?

Income against personal allowance reduction?

Thrugelmir

grizzly1911 wrote: »

Bond income?

Higher rate tax on dividend income?

CGT?

Income against personal allowance reduction?

I prefixed my comment with "average" for good reason.

Not least that fund managers are the real winners. As few people have sufficient capital to build a broadly based portfolio of individual holdings.

N1AK

Wild_Rover wrote: »

Given that we are always being told that the country can't afford this and can't afford that, is it time to place a cash limit on income that people can earn from tax free cash and stocks and shares ISAs?

After all - "all in this together" etc:cool: - state pension age being looked at, public sector pay, contracts of employment for police/fire staff etc all fare game in terms of affordability - why should ISAs be untouchable?

Politically because the conservatives all in this together mantra has never applied to pensioners, and pensioners are probably the biggest (or at least most invested) ISA demographics.

At some point there will be restrictions placed onto ISAs. That's not because it is right or wrong but because the amount of tax 'lost' will continue to grow and someone will want to use it for something else.

The chances are what will happen is that we'll see something like a ISA allowance limit put in place at a level that "only affects the very wealthy".

Pennywise

Wild_Rover wrote: »

What I am referring to is the taxation of those returns, compared to the taxation of employment.

The biggest problem is NIC which is a tax on jobs and workers, i.e. those actually contributing to Society by working. There is no NIC on "lazy" income such as investments, property rents, pensions, dividends, etc. This is morally wrong. The "workers" should enjoy the same, if not lower, tax rates to compensate for them working and creating wealth and those living from "unearned" income should pay a higher rate of tax.

Thankfully, the myth of NIC being some kind of insurance policy where you pay in to get benefits when needed has been exposed and there are now more and more calls for either NIC to be extended to all income, or for tax/NIC to be merged. Can't come soon enough.

BillJones

Pennywise wrote: »

those living from "unearned" income should pay a higher rate of tax.

If this is your criterion, then what should be the tax rate on benefits?

How much should pocket money be taxed, and should we remove the tax free allowance on inheritances?

Edited to add, how would you deal with risk-adjusted returns? After all, most investments can lose money. If you want to tax the gains, the general principle is that you should also give rebates on losses, an you obviously need to adjust each side for risk. I assume that a person charging 20% interest on a secured loan would not pay the same tax as someone who invested in a risky start-up, so what scale of risk-adjustment to you believe to be right?

grizzly1911

ISA rates increased to £15k from July and Cash/S&S to be merged and interchangeable.

The later point is long overdue and the former welcome.

wolvoman

Wild_Rover wrote: »

I agree - my feeling is that the present tax system - for want of a better word - is too geared towards the already better off.

I was listening to a debate on the radio earlier on - the way the economies of the "west" are structured, the flow of wealth is only going one way - to those who already have wealth. I have no problem whatsoever with people earning what they can in a market. What I find a little disturbing is not that fact that the wealthy CAN
earn their "crust", rather it is that the tax system is geared to entrench that wealth and actually add to it by making exempt from tax a number of activities that the less well off are less able to participate in. By all means invest as much as can be invested - and the more you invest, the more you'll get back - but to make ALL the returns exempt from tax? I think that goes too far.

When the idea for Income tax/CGT-free investments started off, do you think it was in the minds of the government that with the annual deposits and reinvestment of dividends folk could earn tens of thousands of pounds tax free? Even if that was the case then, can we still afford to be as generous to the already well off?

I think it's only fair that all income should be liable to taxation above a certain threshold.

Money that is saved in bank accounts/ISAs/stock market doesn't just sit "dead" - the institutions use the funds to generate returns. What I am referring to is the taxation of those returns, compared to the taxation of employment.

WR

You're forgetting the fact that money placed into an ISA has already been taxed. You're suggesting it should be taxed twice.