Raising the Income Tax Threshold

skylineGTR

I believe that raising the Income Tax threshold is the way to go....

I think we should be allowed to earn say £15,000 - £20,000 per year totally tax free, then pay 20% tax on everything over that figure.

This would help everyone on a low income.

It would stop people fiddling (cash in the hand jobs)
I'd better rephrase that (no record of payment)

It would get many people back to work and off benefits.

It would help employers as they would keep proper records.

The government wouldn't lose out because people would have more to spend, and we pay 17.5% tax on everything we buy.

My missus only works part time, so she's on a low income.
She recently got £2,700 bonus for working extra hard, but she only came out with £1,700 ...... over £1,000 deducted!!!
How is that fair?

I'd love to hear Martin's views on this idea, and anyone else's too.


Chris :beer:

dunstonh

I think we should be allowed to earn say £15,000 - £20,000 per year totally tax free, then pay 20% tax on everything over that figure.

They do that in a country. Forgot the name but its some land to do with clouds and cuckoos.

My missus only works part time, so she's on a low income.
She recently got £2,700 bonus for working extra hard, but she only came out with £1,700 ...... over £1,000 deducted!!!
How is that fair?

Quite fair because that deduction would mean she is a higher rate taxpayer earning over £40k a year. Hardly a low earner.

beer_tins

I agree in principle with the idea of a high tax-free band to help the poorest (and help the jobless back to work). It also helps the economy, as the poorest spend the highest proportion of their income (through necessity). However, in order to balance the books, the income tax rate would have to go up, though this would mainly hit higher earners.

I'd also have the tax free allowance at about 12,000, a grand a month tax free per person is pretty decent IMO!

skylineGTR

Quite fair because that deduction would mean she is a higher rate taxpayer earning over £40k a year. Hardly a low earner.

If she was earning £40k a year I wouldn't be on this website.
£10,000 is nearer the mark, so it is very unfair.

If the government didn't waste so much of our money, they wouldn't have to tax us so much.

beer_tins

skylineGTR wrote: »

If she was earning £40k a year I wouldn't be on this website.
£10,000 is nearer the mark, so it is very unfair.

If the government didn't waste so much of our money, they wouldn't have to tax us so much.

I think I can solve this mystery. Every month you are taxed on PAYE, as if you earn that amount every month, i.e. they assume she earns 2700 plus her normal salary every month, which would put her in the higher rate tax bracket. However, she should now pay less tax for the rest of the tax year than she would otherwise to make up for this overpayment. She should check her payslips to make sure this is the case...

hans

It is very sad to see what this government has done to our country.
Considering the growth of the economy since 1997, by now we could have abolished income taxes, corporation tax and inheritance and still have government spending the same as it was in 1997. Has anything really improved since them?

There is a new political libertarian party that wants to abolish income taxes:
http://lpuk.org
Unfortunately looked what happened to Ron Paul in the US.

beer_tins

hans wrote: »

It is very sad to see what this government has done to our country.
Considering the growth of the economy since 1997, by now we could have abolished income taxes, corporation tax and inheritance and still have government spending the same as it was in 1997. Has anything really improved since them?

There is a new political libertarian party that wants to abolish income taxes:
http://lpuk.org
Unfortunately looked what happened to Ron Paul in the US.

That's not really realistic IMO. There has been price inflation and there is a larger population than in 1997. So even with these two factors, costs would be much higher. Plus in 1997 public services were seriously underfunded and infrastructure was in decay, so an increase in public spending was required. Keeping spending the same during this period would have seen a massive deterioration of public service, plus even worse infrastructure degradation.

Of course, New Labour have wasted a lot of money too, but that is only a part of it. To say we could have public spending at 1997 levels is fantasy IMO.