Why should the rich pay more tax than the poor?

[alicia_fan_uk]

Just as "the market" is generally deemed to set the rate for wages/salaries (hence why MNC CEOs get millions, but binmen get a fraction thereof), there is the argument that "the market" sets relevant tax rates (ie via democratic elections, with parties setting out their tax proposals to the electorate).

Both systems are flawed; to paraphrase Winston Churchill, they are the worst systems we can adopt - except for all the alternatives.

If you get paid a huge salary because society generally believes you are entitled to it, why not accept the forfeiture of a larger percentage of that salary on the same basis? You can't have your cake and eat it.

alicia_fan_uk

[eroticartist]

The rich do not pay any taxes in the UK because they register as being absent for more than six months and thus are not liable for tax they have no country!
Mike Freeman from somewhere in Europe on my mobile connection. !wink!

[Von Boy]

BUT why do you NOT want ?14 million from one man to come into your lovely NHS.... are you that silly that you want kids to die just to keep your tax morals in place.... Me I think the UK should welcome people like Schumacher and use his money for the greater good...

[alicia_fan_uk]

What of the risk of creating a "race to the bottom" for the uber-wealthy tax tourists? What if countries keep undercutting each other, in theory to the extent that "well, Schumacher's negotiated us right down to an annual return of ?3.54. However, that's ?3.54 we wouldn't have had otherwise, so jolly spiffing result chaps!"

[David Johnson]

Agreed.

I'm sure Tory paymaster, Lord Ashcroft (funding source of all the glossy Tory election brochures that filled a bin bag at Johnson Towers) who's business empire is based in Belize can vouch for that.

CHeers
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[Dave Wells]

Come to think the question is very irrelevent in fact because all the richest people in this country don't pay tax in this country there's your answer ! The poor will always end up poor whatever the rich decide !

[Essex Lad]

I suppose, firstly, you have to define what you mean by rich... is someone who earns ?100,000 a year rich? Yes compared to someone who works in Asda but not in comparison to a Premier League footballer.

The last government decreed that you were rich if you earned ?150,000 a year or more...

The problem is that some on the left (inc a young chap on Question Time a few weeks back) have not yet understood the concept that you do not make the poor rich by making the rich poor.

Indeed, when the Conservatives cut taxes in the 80s, the tax intake went up and this was before all the non-doms business.

Surely, the simplest way is to abandon all these complicated tax credits and introduce a flat tax - say 20% - which everyone pays after their first ?10,000. That takes the poorest out of the tax system completely and the rest of us know exactly what we have to pay. It might do a few accountants out of business - I glaze over when mine explains I pay 22% on this, and 26% on that and then 40% on the other....

Also, if it wasn't illegal (under EU rules) take VAT down to 5%...

Your comments please gentlemen and ladies...

[alicia_fan_uk]

"the simplest way is to abandon all these complicated tax credits and introduce a flat tax - say 20% - which everyone pays after their first ?10,000."

This means that someone on, say, ?200,000 pays 20% tax on over three quarters of their income, instead of the current 40% rate. Loss to the Treasury = c.?30,000. This would be compared to someone on, say, ?12,000 who wouldn't really save much at all, ie given the intent/moves being made over the course of this parliament to establish the ?10k threshold. (Also, as an aside, the total tax take is driven by a whole host of factors, rather than simply just the prevailing tax rates.)

Effectively, this hands a big tax break on a plate to those who can afford to contribute more. Simple system? Yes. Fair system? See arguments for/against in the comments above.

The reason tax is so complicated is largely because people try to avoid or evade it, so rules, sub-rules and exceptions to said rules have to be brought in. So don't necessarily blame the accountant!

[Essex Lad]

"This means that someone on, say, ?200,000 pays 20% tax on over three quarters of their income, instead of the current 40% rate. Loss to the Treasury = c.?30,000."

Someone who earns ?200,000 probably pays an accountant to get as much as possible of their income into the tax deductible category. I do that and I don't earn anywhere near ?200,000.

Tax avoidance is legal, tax evasion isn't.

As I said during the 80s the Tories cut the tax threshold and the tax intake went up.

The other point is that what is the incentive to work hard and try to better yourself when you are going to get walloped by paying more taxes? The Lib Dems' ridiculous mansion tax is a case in point. If you bought a house years ago and it is now worth more than a million you are likely to be retired - where are you supposed to get ?30,000 a year from?

Most property owners are in theory wealthy but can only realise that wealth by selling the property. Then they have to pay to buy a new house to live in so pay yet more tax (stamp duty) and the vicious circle begins again.

Cut taxes - all taxes. Does anyone think that the government does a good job in spending our money anyway?

[belfast_birty]

I was poor once,and decided to do something about it.As the Yanks say 'go figure'