Labour Plans to Cut Taxes Paid by Rich

cells

Generali wrote: »

And someone on £20,000 gets 20% of their income in 'free' schooling whereas the person on £100,000 probably pays for their kids to go to school. The person on £20,000 gets family tax credits and child benefit adding up to a substantial proportion of their income whereas the person on £100,000 gets nothing.

Someone on £20,000 is unlikely to be a net payer of any tax at all on average.

The average household is ~2.3 people now so talking about families is now not the average

but yes I can accept that a family on £20k probably receives more in state services than they pay in taxes but that probably holds true for the person on £100k too as the state borrows £100B a year so clearly more people get than give

Also what people get is far more uniform. A rich person receives about the same in services that a poorer person does. In fact maybe more considering a poorer person lives fewer years and the biggest two costs for the state are pensions and old age NHS/Care

StevieJ

Generali wrote: »

Dr Laffer doesn't agree with you.

I just had a look at Sweden, a successful mixed economy and they appear to have a higher tax rate around 60% with VAT at 25%, how does that work?

CLAPTON

jamesd wrote: »

You may be missing the point, which wasn't how the initial estimates were made but that income tax revenue was found to have increased.

no I'm not missing the point



- I don't dispute the general mathematical picture nor the intuitive picture that excess taxation will lead to a reduction thereof for all the well rehearsed reasons

-I do query where the maxima actual is and what evidence we have for the UK economy

-it is clearly the case that the tax take is a function of many variables : to plot tax take against only one is disingenuous.
Possible in some periods of history one might argue that other variables were reasonably stable : I don't think one could argue that either in the 1980s nor over that last 10 years

Generali

StevieJ wrote: »

I just had a look at Sweden, a successful mixed economy and they appear to have a higher tax rate around 60% with VAT at 25%, how does that work?

What about it? The discussion is about the Laffer Curve in the UK, not the success or otherwise of the Swedish economy.

StevieJ

Generali wrote: »

What about it? The discussion is about the Laffer Curve in the UK, not the success or otherwise of the Swedish economy.

Why? Doesn't the Laffer curve apply in Sweden? They run a budget surplus and also have a great health and education service. It appears that that 60% payers haven't done a runner.

antrobus

StevieJ wrote: »

I just had a look at Sweden, a successful mixed economy and they appear to have a higher tax rate around 60% with VAT at 25%, how does that work?

It works on the basis that the Swedes vote for political parties that promise to provide a high level of welfare benefits in return for these high taxes.

There is nothing preventing a British political party from committing itself to raising the basic rate of income tax to 31%, increasing VAT to 25%, and the total NI burden to 38% (or whatever it is) and seeing what happens.

It does not appear to be an option considered by Ed M so far. But you never know, there's a couple of months or so to go.

Generali

CLAPTON wrote: »

we all believe that if one has a curve that can credibly said to have a zero value at zero rate of taxation
and also a zero value at 100% taxation rate and
and it is everywhere greater than or equal to zero
and that there are reasonable grounds for believing that the cure is smooth
then the maths says that there must be one or more maxima


the maths does not say where those maxima are.

there is no reasonable theory that predicts that these maxima will be the same in different economic systems, periods of history etc.
In addition, it is obviously, (even to Harvard Ph.D and failed BA students alike), that the tax take of a country is a function of many variables.

Given it is a function of many variables the usefulness of drawing the curve against one is of limited value especially in dramatically changing economic conditions.

You don't need a degree to know the above is correct. (always allowing for spelling and grammatical errors and errors in general)

You seem to have moved across a series of positions from:

- We all know that the Laffer Curve exists
through
- Economics? Rubbish more like.
To
- Nobody knows what the Laffer curve looks like

Actually Dr Laffer believed he did know what the Laffer Curve looked like and that it had a single maximum point rather than a series of maxima.

I say that you are arguing for the sake of it. Actually you haven't got a clue about how Dr Laffer came to his position and are now blustering around from argument to argument in a desperate attempt to save a little face.

Admit you're wrong and move on would be my advice.

the_flying_pig

cells wrote: »

The average household is ~2.3 people now so talking about families is now not the average

but yes I can accept that a family on £20k probably receives more in state services than they pay in taxes but that probably holds true for the person on £100k too as the state borrows £100B a year so clearly more people get than give

Also what people get is far more uniform. A rich person receives about the same in services that a poorer person does. In fact maybe more considering a poorer person lives fewer years and the biggest two costs for the state are pensions and old age NHS/Care

I'm not sure i totally get where you're going with this but there are definitely some interesting points in there.


(1) as a proportion of income the lower deciles families pay more in tax than the top deciles. this is because VAT is payable on so many of life's essentials & spending on 'stuff' [rather than saving or whatever] accounts for such a huge proportion of their income


(2) but as a proportion of income the lower deciles clearly receive loads more in services than the upper deciles:


2i - for starters their incomes are so much lower;
2ii - then some families at the very bottom, say in the bottom decile, many are in receipt of a whole bunch of benefits that the rich don't get, such as housing benefit, unemployment benefit, etc.
2iii - but for say the £20k household, i.e. lowish but definitely not bottom decile, which isn't getting the dole, probably doesn't get HB, and so on, well... I suppose i could sort of believe that they'd pay a higher % of their income in tax and receive no more in absolute terms [of course in % terms they would, but I'm not sure that's the point] than a top decile HH.

michaels

I thought essentials like food and kids clothes were VAT free and energy low rated.

If those on low income also choose to consume essentials such as alcohol, ciggies and sky tv on which VAT and excise are payable rather than saving and thus end up paying more tax as a proportion of their income is that an issue that needs to be addressed in the interests of fairness?

antrobus

Y'all want;

The Effects of Taxes and Benefits on Household Income
http://www.ons.gov.uk/ons/rel/household-income/the-effects-of-taxes-and-benefits-on-household-income/2012-13/index.html