Debate House Prices
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How to increase the 20% tax band dramatically
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Thrugelmir wrote: »Scrap national insurance. Simplify tax legislation.
Give everybody a living personal allowance of say £15k.
Then tax income per se at steadily increasing levels.
Would mean that many benefit payments could be scrapped. Saving an enormous amount of money that is spent administering them.
If I was president of the Republic of Britain for a day, merging NI and PAYE is the one tax change that I would introduce.
At present, we have marginal tax rates of 60-70% in this country at various points that then drop down and back up again
This chart is from 2015, but the point stands:
A fairer way to do this would be to have a much higher tax free allowance for all (say £15k), and then 3 or 4 marginal tax rates that increase in line with earnings.
As identified by another poster, the issue will be around the more mobile higher earners who may leave when they see they are paying more than half their earnings over to the tax man.0 -
Given that the UK's fundamental problem is low savings, low investment, and low productivity, increasing taxes on savings is only going to make things worse.
I completely agree. One of the main reasons for this is the British obsession with investing in property.
Its a real shame that so much of the national wealth is invested simply in owning property, rather than in productive investments such as businesses.
The obvious solution to my mind is to increase taxes on property, in order to reduce taxes on earnings.0 -
steampowered wrote: »I completely agree. One of the main reasons for this is the British obsession with investing in property.
Plenty of ways of capping property prices without needing to resort to imposing tax. Then there would be a cultural return to other methods of savings such as pensions.
Though will be interesting to see how auto enrollment impacts lenders affordability calculators as the employees % progressively increases. Along with higher interest rates, higher council tax bills there's plenty for peoples budgets to contend with in the short term.0 -
Thrugelmir wrote: »Plenty of ways of capping property prices without needing to resort to imposing tax.
The point I am making is not around affordability of homes.
It is more around the overall economic impact. If people choose to put capital into unproductive assets like property, rather than into productive assets like businesses, that has a very negative effect on the economy as a whole.Thrugelmir wrote: »Along with higher interest rates, higher council tax bills there's plenty for peoples budgets to contend with in the short term.
Indeed. People who are employed face income tax and national insurance at pretty high rates. High earners are paying marginal tax rates of up to 60-70%!
It seems a bit perverse that money people earn through working is taxed at such high rates. Yet money that people make without earning it through property earned is taxed at much lower rates (28% capital gains, or 0% in the case of money made from one's main residential property).0 -
steampowered wrote: »The point I am making is not around affordability of homes.
Nor is mine directly. Rising prices have driven the attraction of property as an investment though.
Sometimes you need to pull an unrelated lever to influence matters.0 -
Thrugelmir wrote: »A fairer distribution of wealth will generate more tax revenues. The imple act of more money flowing through the economy will generate activity.
What?
More tax revenues simply means that the government has more money and taxpayers have less. It would not increase activity.0 -
steampowered wrote: »..
It is more around the overall economic impact. If people choose to put capital into unproductive assets like property, rather than into productive assets like businesses, that has a very negative effect on the economy as a whole..
Property is not an unproductive asset.0 -
1) Apply National Insurance to income post State Pension Age.
Having just, with great difficulty, educated the public to taking an interest in accumulating sufficient NI contributions to secure the full rate of state pension, is suddenly moving the goal posts and telling them "Sorry, we lied, actually you need to go on paying for ever", really going to be an election- winner?0
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