The forthcoming budget

GreatApe

Two extremes
The right answer is somewhere in between probably roughly where we are at +- 5%

Sure higher earners pay more but this is generally not because they work more hours or harder it's just the way we reward people is illogical.

For instance the top 1000 football players in the world might be getting paid £20 billion a year.
the next 1000 might be paid £1 billion a year and the 1000 after them £50 million a year.

Can the top 1000 football players really claim they are creating £20 billion in value added goods and services? That's what they are paid that is their 'value' but is it really? What if the top 2000 football players died this year? Would football end? Or would the now new top 1000 players who were getting £50 milloom a year find that soon they are being paid £20 billion a year?

In the case of football players its clear. The high wages are not a function of how many hours work they do or how hard they work. The 2100th best player probably works as hard and as many hours as the #100 best player yet their wages are a difference of 3 magnitudes.

So a very well paid football player can't claim they pay massive amounts of tax. Sure their paycheck says they do but the reality is the demand for the sport creates a system where someone is going to earn that money. The position pays high taxes not the man. This applies to a lot of rich people. Everything from sport stars to music stars to even someone who onjeirta £10 billion and pays 45% of their annual £500m investment returns. If said person wasn't born, if a different sperm has won that race then a different son would have inherited the £10 billion and paid the 45% tax on the £500m annual return's


Perhaps it would be better to reduce the income tax to a flat 20% of everything and just increase the employers NI tax rate (or introduced a new employers tax) by 20-25% then fewer people can claim they pay huge sums of tax while not realising or accepting that it is the position that pays it not them.


Having said that I'm no communist nor socialist. We're not going to change human nature which is to provide for yourself and your offspring more than anyone else. So no silly tax rates the 45% band is far enough. Maybe I would agree with a higher VAT rate perhaps 23% or extending it to food and other non VAT goods For a smaller tax rate on the 20% band maybe reducing it to 10-15%.

If anything people who work excess hours should be helped in some way. Someone doing an 80h week without doubt is working harder and sacrifices more than someone working 40h a week yet the 80h a week worker is taxes more both due to the higher income but also the higher tax rate at the higher income. But I don't see how we can easily take into account hours worked etc so it's not something that can be tracked or implemented

GreatApe

westernpromise wrote: »

Low earners not only don't pay, they take.

Probably not if they are working a full 40h week

A refuse collector on £18k a year sure seems like he is a drain on society he pays almost no taxes and gets a lot of benefits and services for free.

For some silly reason let's say all the refuse collectors in the country leave. Well it's a job that mist be done and since we have fill employment in the UK what happens is other workers higher up the pay scale have to fill the refuse collecting positions (we just got rid of 20,000 refuse collectors and their families which means there is now less demand for everything from teachers to retail workers to nurses etc. All those people lose their jibs and are displaced into other work. People cascade down until 20,000 new people become refuse collectors)

Well let's say this new group of refuse collectors also decodes to leave the country. And just keep repeating until the country is say 1/10th its current size. What do you notice about this new UK of 6.5 million people? What do we pay our football / music / film stars now? A hell of a lot less!

So some of the taxes pages by the richer in society are wrongly attributed to them they are taxes paid by their positions not really by the individual.

As such I would make the argument that its a more fair accounting to just look at hours worked.
Someone who inhwirts a billion pounds aged 20 and doesn't work a day in his life and just spends it on drugs and hookwrs isn't doing anything for society or the country. He may pay hundreds of millions in tax over his lifetime but his contributions is zero. Likewise someone who spends say 60h a week for 50 years of their life collecting refuse would be a much bigger contributor to society. Just the accounting we do is not fully correct.

But once more i accept we are humans and have been bred over a few hundred thousand years to take care of ourselves and our offspring far more so than the rest of our tribe. As such we can't push this distribution too far else we !!!! off our animal instincts. I think roughly what we have is good. A social market economy where the state is about 40-45% of the economy. Or rather the state directs capital flows of 40-45% of the economy. The state itself isn't 40-45% of the economy.

chucknorris

Has anything already been stated that it will be included or hinted at being under consideration for inclusion in the budget?

mrginge

ruperts wrote: »

I can't help it if people can't follow basic statements like tax should be paid in proportion to the amount earned and spent.

What you are suggesting is that all those rich people get a massive tax cut, while the less well off would have to pay more.
Is that what you actually want? I guess it will go down well with some.

It would be nice if people did understand basic statements, especially the ones they make themselves.

Fella

GreatApe wrote: »

Two extremes
The right answer is somewhere in between probably roughly where we are at +- 5%

Sure higher earners pay more but this is generally not because they work more hours or harder it's just the way we reward people is illogical.

I would probably argue that it is logical (IMO wages are an almost perfect example of supply & demand working correctly). However most of us probably think it's not ideal (it's hard to think of many ways in which a footballer earning 1,000x as much as a policeman is a good situation).

Re tax in general though, regardless of where the level is set, I think a nice start would be to stop calling it a "fair" system since it's very clearly unfair. Realistically it has to be unfair, as rich people generally want to live in a society & if you want to live in a society (as opposed to a compound full of only other rich people) then paying a disproportionately large amount of tax is the price you pay. However it would be nice to see at least some politicians acknowledge that's the way it works & maybe say "thanks" rather than allow the left-wing Corbynista narrative that the rich don't pay enough, that a "fair" amount would be even more, and that it basically serves them right for being part of the hated "few".

GreatApe

Fella wrote: »

I would probably argue that it is logical (IMO wages are an almost perfect example of supply & demand working correctly). However most of us probably think it's not ideal (it's hard to think of many ways in which a footballer earning 1,000x as much as a policeman is a good situation).

Re tax in general though, regardless of where the level is set, I think a nice start would be to stop calling it a "fair" system since it's very clearly unfair. Realistically it has to be unfair, as rich people generally want to live in a society & if you want to live in a society (as opposed to a compound full of only other rich people) then paying a disproportionately large amount of tax is the price you pay. However it would be nice to see at least some politicians acknowledge that's the way it works & maybe say "thanks" rather than allow the left-wing Corbynista narrative that the rich don't pay enough, that a "fair" amount would be even more, and that it basically serves them right for being part of the hated "few".

But a lot of the high paying jobs and individuals would exist irrespective of the person so is it the person that is paying the tax or the position? I am suggesting in many cases it is the position being paid highly and paying high taxes not the individual

Using the example of football players it's clearly the position being paid huge sums not the individual. Using the example of someone inheriting a huge sum of money and thus paying huge sums if income tax cgt etc on the return on that investment, well again its the position paying taxes not the individual. Had another sperm won the race or had that kid died when he was young then that huge Inheritences would have passed onto someone else and that someone else would be paying the huge taxes. So its the position paying the taxes not the individual

This seems to apply to almost all big tax payers. Its their position paying large taxes not the individual. The only exceptions I can think of are inventors that invent something and name large suns from it.

So I would suggest that looking at a persons paycheck to figure out their tax contributions is not the full picture. I would suggest that a more accurate figure is looking at the number of hours worked. That is to say a refuse collector doing 60h a week being paid £18k a year is contributing more 'tax' than a model working 20h a week being paid £180k a year. The model pays virtually no tax her position pays the tax irrespective if her someone us going to be paid £180k to do that job.

I've never read this type of argument from a lefty

Anyway having said all the above I also accept we are programmed to take care of ourselves and our offspring more than the rest of our tribe. This means taxes can't be too excessive it also means even left wing politicians dispite their rhetoric actually want a system where advantage and privileges exist. Hence things like abbot sending her kids to public school and lefties giving million pound plus Inheritences to their kids or having 10BTLs etc

economic

completely agree about human instincts is all about self interest and offspring (in most cases at least) first and foremost before anyone else. it is what makes the economy tick.

if you raise inheritance taxes massively even on businesses, the business owners wont bother to expand and may even shut down (resulting in job losses and reduced competition) and chill out knowing their wealth will all be taxed away and children will get a small amount. this of course collapses the economy.

we need incentives to drive the economy, not disincentives like higher taxes (inheritance, income etc).

mrginge

this is a new high for you cells.

Perhaps when that 180k model jacks in I can apply for the job. After all, it’s the position itself that pays the money, not the ability or availability of an individual to fulfill it.

michaels

I think GreatApe has a point but perhaps we should look at the supply of Labour as we do all other goods. Ronaldo has a monopoly on supplying services as the best footballer in Europe and so is able to exploit that monopoly position to extract huge returns.

In general where market conditions create a natural supply monopoly we do not object if the govt steps in to correct the situation for example with price controls and perhaps high earnings going to those with unique talents exactly fits this same 'natural monopoly' model and the govt steps in with higher tax rates for higher earners to help address the 'market failure'

economic

ilovehouses wrote: »

The easiest way for anyone to avoid their offspring (who they love above all else) paying IHT is not to leave a massive estate in the first place.

Give it away while you can, see the people you love get the benefit and get one over on the tax man at the same time.

thats exactly what should not have to happen. if the wealth is given away to their offspring or spent, it can not be used as capital for business. therefore it leads to a reduction in economic growth.

incentives are a funny thing. you change some element of the tax law and watch how people will react (and quite rightly so).