LET THOSE WITH THE BROADEST SHOULDERS BEAR THE HEAVIEST BURDEN….

dinners said:
All people are taxed the same rate. 20% up to 42K, then 40% up to 150K, then 45% above 150K.

The difference is how much money people make.

If you wanted a single flat rate to cover everybody - what % would it have to be ?
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You can't state that ALL people are taxed the SAME rate and then post 3 DIFFERENT rates.

If you earn £100k before deductions under PAYE. The government will get £47560. That is why individuals set up LTD companies and why large corporations spend millions using very complicated avoidance schemes.
 
dinners said:
All people are taxed the same rate. 20% up to 42K, then 40% up to 150K, then 45% above 150K.
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mattyg said:
You can't state that ALL people are taxed the SAME rate and then post 3 DIFFERENT rates.
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The actual rates are the same for everybody.

The total amount of tax paid differs because of earnings, not because of different rates.
 
mattyg said:
.........that is why individuals set up LTD companies and why large corporations spend millions using very complicated avoidance schemes.
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No it's not. It's because they're greedy bastards.
 
Basic rate 20% £0 to £31,785
People with the standard Personal Allowance start paying this rate on income over £10,600

Higher rate 40% £31,786 to £150,000
People with the standard Personal Allowance start paying this rate on income over £42,385

Additional rate 45% Over £150,000

Mr A earns £42,385 and pays 20%
Mr B earns £150,000 and pays same tax on his first £42,385 as Mr A
Mr C earns £300,000 and pays same tax on his first £42,385 as Mr A & Mr B

Mr A is taxed at 40% for earnings between £42,385 and £150,000 but doesn't earn enough.
Mr B is taxed at 40% for earnings between £42,385 and £150,000
Mr C is taxed at 40% for earnings between £42,385 and £150,000 and pays same tax as Mr B

Mr A is taxed at 45% for earnings over £150,000 but doesn't earn enough.
Mr B is taxed at 45% for earnings over £150,000 but doesn't earn enough.
Mr C is taxed at 45% for earnings between £150,000 and £300,000

So we're all taxed at the same RATE as marginal bands mean we only pay the specified tax rate on that portion of our salary.
 
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Someone earning £100k/annum doesn't exactly have the 'broadest shoulders' (in terms of earnings) in our society. Some footballers earn double that amount per week for example. When you are in the league of the top 1% (earning £166k + pa) I believe you will have access to investments and tax avoidance schemes to ensure you pay little to no tax if you so choose.
 
simonblue said:
Their were those Banker who took some big risks,and when it went tits up did they carry any burden,i think not :rolleyes:
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I was referring to people who start, or have, their own businesses and therefore take risks with their own wealth and financial security. I was not referring to people who are paid ridiculous salaries and bonuses for gambling with other peoples' money.
 
RBaker said:
No it's not. It's because they're greedy bastards.
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Why is it greedy to expect to be able to keep what you have earned. Surely the greed is in someone taking 40% of it, they've done nothing to earn it.
£42385 isn't a great deal to be honest. To take 40% of everything above that is morally wrong. Above £75k or possibly more would be a better threshold.
 
nilagin said:
£42385 isn't a great deal to be honest. To take 40% of everything above that is morally wrong. Above £75k or possibly more would be a better threshold.
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Peoples salaries are set within the current tax scheme and the incentive is take home net pay.

Overly simplified but in basic terms:

A company offers a job with an £80K salary. With tax at 20% on the first £40K (£8K) and 40% on the next £40K (16K) the net take home incentive is £56K

If the 40% tax threshold was raised to say £80K - With tax at 20% on the full 80K (16K) would the net take home incentive be £64K ?

Or would it just mean companies review salaries ?

To take home £56K a company would no longer have to offer £80K. They could offer £70K (all taxed at 20%) and the employee still takes home £56K
 
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FYI Dividends are taxed.

Salary goes against profit, so the emote pays tax. Dividends are profit so the company pays corporation tax. If I had to pay tax on my dividends, then I would be paying close to 40% tax. (22% or so corporation tax and then 20% on the money after corporation tax)
 
Yves Geza said:
One of our neighbours seems to like white cars. He has four of them. An MPV sized, so called MINI, a Range Rover and two modern Rolls Royce Phantoms, one a particularly vulgar convertible. That one of his four cars must have cost £250,000 which means £50,000 straight to the exchequer in VAT. Of the other £200,000 at least £30,000 must have been the labour costs of manufacture which means around another £12,000 in income tax and NI. Other taxes came out of that £200,000 pre VAT, and that's before he pays any WED, IPT or fuel duty!

I'm lucky. I'm not jealous of his cars so I don't subscribe to the nasty, mean-minded, politics of envy, but with that sort of tax take on his consumption - £65,000 to the Government from that one purchase alone - I'm not too excited about what other taxes he does or doesn't pay either.
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Don't assume he owns them.

Business contract hire. The cars reduce his profit and so reduce his tax bill. The reduction in profit for the 2 phantoms probably covers the cost of the Range Rover in the reduced tax.
 
RBaker said:
No it's not. It's because they're greedy bastards.
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Maybe it is also because they work hard, long hours to run a business that also employs other people.

Your statement is a ridiculous generalisation.
 
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fracster said:
Maybe it is also because they work hard, long hours to run a business that also employs other people.

Your statement is a ridiculous generalisation.
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Unlike yourself, I cannot condone tax avoidance.
 
My comment about 20% would be for each individual regardless how much they earned. I don't see why someone earning £100k a year or £100k a week should be taxed more than someone earning £30k a year. Everyone should make an equal contribution. It's like saying because you can afford it one person should be charged more to buy say a Ford focus than someone earning less.
 
Ferj said:
My comment about 20% would be for each individual regardless how much they earned. I don't see why someone earning £100k a year or £100k a week should be taxed more than someone earning £30k a year. Everyone should make an equal contribution. It's like saying because you can afford it one person should be charged more to buy say a Ford focus than someone earning less.
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But if everybody made an equal contribution @20% we'd have a bit of a shortfall.
 
dinners said:
Peoples salaries are set within the current tax scheme and the incentive is take home net pay.

Overly simplified but in basic terms:

A company offers a job with an £80K salary. With tax at 20% on the first £40K (£8K) and 40% on the next £40K (16K) the net take home incentive is £56K

If the 40% tax threshold was raised to say £80K - With tax at 20% on the full 80K (16K) would the net take home incentive be £64K ?

Or would it just mean companies review salaries ?

To take home £56K a company would no longer have to offer £80K. They could offer £70K (all taxed at 20%) and the employee still takes home £56K
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Highly unlikely companies would be cutting the Gross Pay just because the tax liability had been reduced. If the threshold is increased then the take home pay is increased.
 
Read the thread and do try to keep up. There's a good chap.
 
dinners said:
But if everybody made an equal contribution @20% we'd have a bit of a shortfall.
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Agreed, but I still think it would be fair :) I reckon there's lots of ways the money could be made up but that could be even more controversial!
 
See, in principle I agree it should be a flat rate across the board, you would keep a lot more of those top few percent here and paying tax if they felt they weren't being penalised for working hard and being successful [yes, some will be inherited money, I get it, but many have grafted to get that high income]

However, I also get the practicalities of income against expenditure and the broadest shoulders bearing the burden. There has to be some balance, and I suspect that atm, it is as Matty suggested, those that are just into the middle income bracket that are being penalised quite heavily. No, I don't have the answers, I struggle with maths, never mind balancing an economy, but I am pretty sure the mansion tax won't pay for everything ;)

I also agree that tightening up tax laws so international companies do need to pay tax on their profits earned here, BUT I will not condemn them for avoiding it whilst it is legal to do so - you can be as self righteous about it as you want, but in the same situation, you would also do the same. We all do it to some extent or another, whether it's a tax free ISA, grabbing duty free at the airport, or whatever, it is only a matter of scale.
 
After reading through this thread, there's a simple answer, make everybody pay 20% tax and be on the same rate of pay, say £20.00 per hour, then the people whe work the hardest make the most money, also tax 100% on bonuses over £1000.:)
 
Dale_tem said:
Don't assume he owns them.

Business contract hire. The cars reduce his profit and so reduce his tax bill. The reduction in profit for the 2 phantoms probably covers the cost of the Range Rover in the reduced tax.
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That only increases the tens of thousands of pounds of VAT paid! VAT will be due on the residual value at the end of the lease and on the contract hire payments which have to cover the entire capital cost and also a bit of interest.

I've paid tax bills of tens of thousands of pounds. I don't know if you ever have but, £65,000+ to the exchequer covers the whole tax take of quite a few moaning "politicians of envy"!
 
£200,000 tax in total last year ;)
 
nilagin said:
So you don't have any tax free ISA's then?
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I love this point of view when people mention tax avoidance. The government introduced ISA's to encourage the low paid to save, NOT to beat them over the head with it when big corporations are caught pulling rabbits out of their arse to save paying their share.
 
I also 'love' the idea that the rich are working harder than the poor - its not remotely true that those in the better paid jobs are working harder, does a banker graft more than a Miner ? , does a Lawyer work harder than a Royal Marine ? , is and advertising exec working more strenously than someone doing an industrial factory shift ?

Fact is with the exception of a tiny proportion of indolent poor who can't be arsed to get off their arse and get a job , and an equally tiny proportion of indolent rich who don't need to get off their arse and get a job, most people who are in full time jobs are working pretty hard - renumeration doesn't generally reflect how hard you graft (apart from people who on hourly pay pulling down more by doing overtime).
 
h14nha said:
I love this point of view when people mention tax avoidance. The government introduced ISA's to encourage the low paid to save, NOT to beat them over the head with it when big corporations are caught pulling rabbits out of their arse to save paying their share.
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An ISA is just a tax free loophole much the same as there are other loop holes to avoid paying tax. It's no different to someone gifting someone else money every year, rather than having to wait for it as inheritance and then paying 40% tax on anything over the tax free sum.
A big difference between avoiding paying your share legally and illegally.
 
I'm a nurse on intensive care, earning just under £28k a year, after being qualified 15 years, which is considered an "average wage" in the UK. I don't begrudge a penny of the tax I pay, and would be willing to pay more. I'm not rich, but I certainly not poor, either. I work 12hr shifts, nights, weekends and Christmas/New Year/Easter (as do many other people in other professions). I like my job, but it's bloody hard and I work very hard, and am frequently exhausted when I get in from work. I'm not complaining, but it's not necessarily true that people who earn more work harder.

Give me 50k a year, and I would gladly pay more percentage tax, thanks. In fact, I'll snatch your hand off.

Simple as that.
 
There are factory workers who's pay inclusive of shift allowance won't put them in the 40% bracket, however if they work overtime it can easily take them past the 40% threshold. They are working hard and putting in the hours is it fair to penalise them. Even £50k a year isn't a large amount.
 
nilagin said:
There are factory workers who's pay inclusive of shift allowance won't put them in the 40% bracket, however if they work overtime it can easily take them past the 40% threshold. They are working hard and putting in the hours is it fair to penalise them. Even £50k a year isn't a large amount.
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No, but it's nice. :)
 
Your average newly qualified lawyer doesn't make much more than a royal marine.
Junior associates can work for years on a p*** poor salary, and often working 60+ hours a week, and more than fifty percent will have left the profession after five years.
 
nilagin said:
There are factory workers who's pay inclusive of shift allowance won't put them in the 40% bracket, however if they work overtime it can easily take them past the 40% threshold. They are working hard and putting in the hours is it fair to penalise them. Even £50k a year isn't a large amount.
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It's interesting that you use the word penalise.
 
nilagin said:
There are factory workers who's pay inclusive of shift allowance won't put them in the 40% bracket, however if they work overtime it can easily take them past the 40% threshold. They are working hard and putting in the hours is it fair to penalise them. Even £50k a year isn't a large amount.
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It's not a penalty.
It's simply taxing them according to the money they have earned.
 
viv1969 said:
It's not a penalty.
It's simply taxing them according to the money they have earned.
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But it's not simply tax according to the amount you've earned. It's taking a large amount of the extra money earned as tax as well as the extra in NI.
40% tax is way to large amount to start taking on what isn't that big a wage threshold.
 
Nawty said:
It's interesting that you use the word penalise.
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Plenty of people have found their basic pay take them into the 40% tax bracket simply because their wages have increased but the threshold has not risen in line with those wages. So yes it's a penalty. A penalty for working and a penalty for wanting to pay for things themselves rather than getting themselves in debt and taking on credit.
 
nilagin said:
But it's not simply tax according to the amount you've earned. It's taking a large amount of the extra money earned as tax as well as the extra in NI.
40% tax is way to large amount to start taking on what isn't that big a wage threshold.
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It depend how you look at it - personally i'm on 27k and work damn hard for my money so to me 40k is a shedload , and if you can't pay for things without getting into debt on 40k you are dping something wrong

surely the answer to the overtime takes me over 40k thing is that the company should stop taking the p*** on the working time directive and just hire more staff, thus lowering unemployment and allowimg those who do work there to have a life to enjoy their still substantial wage

(anyone whos working every hour god sends needs to remember that no one has ever said on their death bed " I wish i'd spent more time at work" )
 
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Harold Kushner said some good stuff.
 
big soft moose said:
(anyone whos working every hour god sends needs to remember that no one has ever said on their death bed " I wish i'd spent more time at work" )
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Really. No-one...ever..Are you sure..

I get what your saying but how many people on their death bed have said I'm glad i went through life without 2 pennies to rub together.

My uncle worked hard his whole life and was happy to have left his children enough so they wouldn't have to work particularly hard.

Trevor Hemmings, Who's horse just won the Grand national, used to work 363 days of the year. He used to have Christmas day and Grand national day off. He looked pretty happy last weekend. And I'm sure on his death bed he won't wish he'd worked less.

I don't mind paying more tax the more I earn. I have issue with the percentage changing. It's not like I have worked less hard for the difference, In fact i've most probably worked harder for the higher rate than the standard rate yet I get to keep less of it.
 
big soft moose said:
It depend how you look at it - personally i'm on 27k and work damn hard for my money so to me 40k is a shedload , and if you can't pay for things without getting into debt on 40k you are dping something wrong

surely the answer to the overtime takes me over 40k thing is that the company should stop taking the p*** on the working time directive and just hire more staff, thus lowering unemployment and allowimg those who do work there to have a life to enjoy their still substantial wage

(anyone whos working every hour god sends needs to remember that no one has ever said on their death bed " I wish i'd spent more time at work" )
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It depends on where you live, size of family to support, everyone's outgoings are different and not necessarily extravagant. I couldn't afford to live on £28k and my life style is far from extravagant. Overtime is voluntary, there are some workers that work just weekends, those that work extra hours during the week is to cover holidays and sickness. Not really the sort of job they could phone up an agency and ask them to send them some one to work for the day and show them what to do and expect them to keep up with everyone else.
 
It still fascinates me how people fall for the lie that the hardest workers earn the most, it is simply rubbish. The chances are that if you are earning enough to pay the higher tax bracket it is because you were born into relative wealth and privilege, not because you worked harder or were born with more intelligence. Whilst I may have some sympathy with the very few who started with nothing and worked their way to the highest income bracket, there are very very few of them. Personally I think happiness comes from knowing when you have enough, something which seams to have become alien to our greedy culture. In general it is not the ones with the broadest shoulders who are paying the most but those who had the best start in life.
 
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