Lowering Taxes

sevenhills

Boris Johnson - Tax proposal: Raise higher-rate income tax threshold to £80,000 from £50,000.
The measure would cost £9.6bn a year.


Jeremy Hunt - Tax proposal: Cut corporation tax from 19% to 12.5%.
Some economists argue cuts could boost revenue if more businesses locate and invest in Britain
Hunt’s proposal could cost Britain as much as £13bn, according to the Resolution Foundation.


Mr Hunt promised to bring taxes down on business to "turbocharge" the economy and allow growth rates to match America. It has also been stated that lowering taxes will result in more taxes being paid to the exchequer.


Is it all just spin, surely we are already a low tax economy, do we need to go further?

Takedap

sevenhills wrote: »

Boris Johnson - Tax proposal: Raise higher-rate income tax threshold to £80,000 from £50,000.
The measure would cost £9.6bn a year.


Jeremy Hunt - Tax proposal: Cut corporation tax from 19% to 12.5%.
Some economists argue cuts could boost revenue if more businesses locate and invest in Britain
Hunt’s proposal could cost Britain as much as £13bn, according to the Resolution Foundation.


Mr Hunt promised to bring taxes down on business to "turbocharge" the economy and allow growth rates to match America. It has also been stated that lowering taxes will result in more taxes being paid to the exchequer.


Is it all just spin, surely we are already a low tax economy, do we need to go further?

You're not suggesting that they may be making give-away promises just to get elected rather than for sound economic & fiscal reasons are you???

stator

Given brexit uncertainty it's certaily a good idea to cut corporation taxes.


You never know how much a tax cut costs because you never know how much of a boost it will make to the economy, increasing other tax receipts.
You can't even know how much it costs when looking back

sevenhills

stator wrote: »

You never know how much a tax cut costs because you never know how much of a boost it will make to the economy, increasing other tax receipts.
You can't even know how much it costs when looking back

Surely cutting taxes just moves the money around, it does not boost anything?
I can understand the corperation tax argument, when companies can choose to have their head office in any low tax country. But do we need to cut it further?

Thrugelmir

sevenhills wrote: »

Surely cutting taxes just moves the money around, it does not boost anything?
I can understand the corperation tax argument, when companies can choose to have their head office in any low tax country. But do we need to cut it further?

A 12.5% rate simply matches that of Eire.

Kentish_Dave

The U.K. taxes very high earners at a similar level to other European economies but charges middle earners and lower earners much less.

If we want to match other liberal modern democracies we should increase taxes for poorer people and start linking benefits to what you have paid in previously.

Zero_Sum

Kentish_Dave wrote: »

The U.K. taxes very high earners at a similar level to other European economies but charges middle earners and lower earners much less.

If we want to match other liberal modern democracies we should increase taxes for poorer people and start linking benefits to what you have paid in previously.

I fear that is actually Boris's plan. Its been suggested that the tax cut for higher earners will in part be funded from an increase in NI. It however doesnt say at what level, if across the board then low earners are going to be hit. Just like a few years back when Cameron lied about not increasing NI despite an increase (scrapping pension ontracting out) already being in the pipeline. It was probably more annoying that no one from the oppoition pulled him up on it.

Thrugelmir

Zero_Sum wrote: »

Just like a few years back when Cameron lied about not increasing NI despite an increase (scrapping pension ontracting out) already being in the pipeline. It was probably more annoying that no one from the oppoition pulled him up on it.

Brown pulled the trick on more than one occcasion. As Labour's mandate was not to raise the basic rate of income tax, which they didn't. Instead in his budgets , buried at the end in the red book. Was a change to NI that didn't take effect to the following tax year, i.e. over a year later. No annoucements on budget day. Instead the news dribbled out weeks later once people actually read the full document. Making no news headlines.

Zero_Sum

Thrugelmir wrote: »

Brown pulled the trick on more than one occcasion. As Labour's mandate was not to raise the basic rate of income tax, which they didn't. Instead in his budgets , buried at the end in the red book. Was a change to NI that didn't take effect to the following tax year, i.e. over a year later. No annoucements on budget day. Instead the news dribbled out weeks later once people actually read the full document. Making no news headlines.

Tbf whilst they reduced basic income tax by 2%, they increased NI also by 2%
So yes its a bit sly in terms of claiming taxes have gone down, the net effect is virtually nil

It took me 2 years of 1% pay rises & increases in personal allowances before my net pay had actually increased after Camerons lies.

rajeshk4u

Osborne lowered the UK’s corporation tax rate from 28% in 2010 to 20% by 2016. The rate now is at 19%.

All it may do is push other countries to lower their rates and we end up back in the same place.

westernpromise

Zero_Sum wrote: »

I fear that is actually Boris's plan. Its been suggested that the tax cut for higher earners will in part be funded from an increase in NI.

It's probably been suggested by lefties, who think reducing certain people's income is a good in itself even if the money taken away were simply to be piled up in a field and burnt. If we're all equally miserable, we're all equally happy.

What any such analysis chooses to overlook (and is difficult to calculate) is the extent to which lowering taxes brings in more people. Given a choice between an economy that taxes £1 million income at 50% and has one millionaire, versus one that taxes £1 million income at 40% and has three millionaires, which is the better place to be? The second, obviously, because it raises nearly two and a half times as much tax money off its 40% rate than the first, and because the millionaire sector has over three and half times as much to spend in the economy.

• The holders-out of their hands for other people's money should be happy because there's more money for free stuff for themselves.
• The millionaires are happy because they get to keep more of their money.
• The anti-immigration crowd should be happy because 1% of the earners pay 25% of the tax; so if you increase the number of high earners you get to double or treble the tax take from them for only a small hike in overall population.