tag:blogger.com,1999:blog-2948538160252327076.post1711697450855375070..comments2023-11-02T15:48:50.381+00:00Comments on UK Bubble UK Economy: In Britain, only the little people pay taxesAlice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-2948538160252327076.post-37223545519221269712012-04-23T14:52:41.070+01:002012-04-23T14:52:41.070+01:00Here is a very instructive chart from the Taxpayer...Here is a very instructive chart from the Taxpayers Alliance:<br /><br />http://www.taxpayersalliance.com/economics/2012/04/rich-poor-middle-pay-lot-tax.html<br /><br />As you can see the top 10% pay well in excess of their income share in income tax (34.9% of income but 57.6% of taxes), the top 25-10% (the well-to-do middle class if you like) actually pay slightly less than their share, and everyone else pays considerably less than their share.<br /><br />We have (like it or not) a highly 'progressive' tax regime.Jimnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-64289213882998629662012-04-21T09:04:44.598+01:002012-04-21T09:04:44.598+01:00@Alice: Yes indeed there is a difference between t...@Alice: Yes indeed there is a difference between the 1% with the highest incomes and the wealthiest 1%. <br /><br />However income is a flow (repeated constantly) and capital is a stock (only added to by saving or astute investment). Income can be taxed, not with impunity but with a degree of positive trade off between the cost to the individual vs the benefit to society at large, and the individuals therein. Ie its in our own self interest to pay some taxes to fund the police for example, or defence, or even some sort of basic benefit and health system. And as our incomes repeat monthly , yearly etc, there is a less of an issue with parting with a percentage in return for the benefits of some collective action. <br /><br />Taxes on capital are a different kettle of fish. Once a society starts taxing capital, it is eating its own seed corn. Capital is what makes us truly wealthy as a nation, not income. So if you tax capital you either end up taxing income by proxy - ie everyone can only own the amount of capital that their income can pay the capital taxes on and therefore pays pretty much the same amount of tax as they would if income were taxed (this is what LVT would achieve), or if you punitively tax capital above certain amounts, the capital is eaten up in taxes slowly over time (what happened to the large land estates post 1900 due to inheritance taxes). And of course you then get capital flight, as who wants to leave their capital in a country that is slowly expropriating it? It also discourages saving, as if income is tax free and capital taxed, why not spend all your income now and have no savings?<br /><br />It is a sign of a society that is rotting from within that attempts to tax capital over income to a large extent.Jimnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-33577830351522180412012-04-21T04:24:23.986+01:002012-04-21T04:24:23.986+01:00Jim
First of all, thanks for a really thoughtful ...Jim<br /><br />First of all, thanks for a really thoughtful comment. <br /><br />There was much I could agree with, in particular your views on net tax consumers. I also think you are right when you say that millions of people are being "kept"" thanks to the welfare system. However, I think it is the middle class that are providing the support. Agreed; a little gratitude would not go amiss. <br /><br />Still, I am sure that the wealthiest 1 percent are not paying anything like 27 percent of total tax, which is the concept that matters. As for your clarification on income tax, I looked at this recently and I was surprised at how low the income levels were for the top earners. The threshold was "only" 500 grand.(at least that is what I remember) <br /><br />Here, I would like to make a distinction between the top one percent of earners and the wealthiest one percent. These are two different groups. <br /><br />It is a point I will address in a later post.<br /><br />AliceAlice Cookhttps://www.blogger.com/profile/05753570123987780947noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-17031354047150641132012-04-21T04:24:23.603+01:002012-04-21T04:24:23.603+01:00Jim
First of all, thanks for a really thoughtful ...Jim<br /><br />First of all, thanks for a really thoughtful comment. <br /><br />There was much I could agree with, in particular your views on net tax consumers. I also think you are right when you say that millions of people are being "kept"" thanks to the welfare system. However, I think it is the middle class that are providing the support. Agreed; a little gratitude would not go amiss. <br /><br />Still, I am sure that the wealthiest 1 percent are not paying anything like 27 percent of total tax, which is the concept that matters. As for your clarification on income tax, I looked at this recently and I was surprised at how low the income levels were for the top earners. The threshold was "only" 500 grand.(at least that is what I remember) <br /><br />Here, I would like to make a distinction between the top one percent of earners and the wealthiest one percent. These are two different groups. <br /><br />It is a point I will address in a later post.<br /><br />AliceAlice Cookhttps://www.blogger.com/profile/05753570123987780947noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-68427562339814060522012-04-21T02:05:28.518+01:002012-04-21T02:05:28.518+01:00You have misunderstood the statistic: 27% of incom...You have misunderstood the statistic: 27% of income tax comes from 1% of income tax payers. Not 27% of all tax comes from 1% of the people.<br /><br />Link:http://www.bbc.co.uk/news/uk-politics-15843746<br /><br />You also have to remember that the super rich often pay themselves in dividends from their companies, which have withholding tax taken off at source. They then pay income tax on the remainder to make up the same tax rate as if they had the income directly (less NI, as dividends are unearned income).<br /><br />So as well as paying 27% of all income tax, the 1% most likely pay a large percentage of dividend withholding tax as well.<br /><br />Then there's corporation tax. If you own your own company making millions you pay corporation tax on those profits before you can take the dividends out (and pay tax again on them). So the super wealthy are paying large chunks of corporation tax as well.<br /><br />Then VAT - while the 1% probably dont pay as much of a % of VAT revenue as they do income tax, I'd hazard a guess that they pay more than 1% of it. If you earn (and spend) £100K you undoubted pay a greater % of your income in VAT than a person on £25K, given the basics (food, rent/mortgage and heat/light) are either zero or low VAT rated.<br /><br />Vast swathes of the UK population are net tax consumers, not payers. Most pensioners, all those working for the State, all those on full time benefits, and many who do work, but receive in work benefits. Plus many more whose jobs in the private sector rely on State contracts for their income.<br /><br />Millions of people are being kept by the taxes paid by just a few tens of thousands of people. A little gratitude wouldn't go amiss.Jimnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-71332650282053330182012-04-21T00:55:47.421+01:002012-04-21T00:55:47.421+01:00My guitar shop friend (I visited him today) is bei...My guitar shop friend (I visited him today) is being crippled by VAT at 20%.<br /><br />Then there are the suppliers screwing him too if he under-orders (risk of being cut from their supply chain)It really is a tough business ... being in small business<br /><br />Here's my demonstration of the guitar I bought from him. Finishes with Wild Wood as promised some while back. I like to be loyal to my local suppliers.<br /><br />http://www.youtube.com/watch?v=YuCBDicNMbg&feature=channel&list=UL<br /><br />Every little helps, I suppose.Electro-Kevinhttps://www.blogger.com/profile/18073103431166273080noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-57621790248876945712012-04-20T19:57:08.276+01:002012-04-20T19:57:08.276+01:00her husband (who had all the money) died first and...her husband (who had all the money) died first and he was older than her so you may be forgiven for thinking that she too had passed away long ago after all her rise to fame was 30 years ago.whilst she was in prison he turned the night lights off in the empire state building to protest.those were the days but you must admit she was right.Chief of menhttps://www.blogger.com/profile/14931132244528095275noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-89159036937901441022012-04-20T18:44:57.888+01:002012-04-20T18:44:57.888+01:00Chief of men,
that is a matter of perspective; al...Chief of men,<br /><br />that is a matter of perspective; although I thought it was a little longer than that.<br /><br />AliceAlice Cookhttps://www.blogger.com/profile/05753570123987780947noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-46302736345367389222012-04-20T18:41:51.651+01:002012-04-20T18:41:51.651+01:00she died just under 5 years ago.is that long since...she died just under 5 years ago.is that long since ?Chief of menhttps://www.blogger.com/profile/14931132244528095275noreply@blogger.com