General Chat Thread, Public sector employees to get ripped off, again in General; ...
12th December 2009, 10:30 AM #91
Income tax is reasonably progressive but it's not the only tax and most other taxes are not progressive (because they're not related to ability to pay) - someone on minimum wage pays exactly the same rate of VAT, insurance tax, excise duty etc etc meaning that the total percentage of income paid out as tax can be higher for someone on lower income.
Originally Posted by Midget
People earning more money may be able to employ accountants to "hide" income so they don't pay as much income tax.
12th December 2009, 11:17 AM #92
The way such means testing based on ability to pay is currently implemented, it's probably a blessing that it isn't implemented more so in other areas. Our tax system definitely discourages people from getting wage increases at certian levels and progressing, as tax credit related benefits can be lost for instance... If we start going down the route of progressive VAT, excise duty based on income [eh??] then it will probably disincentivise people even more to go out to earn and progress.
Originally Posted by srochford
Your last point is a very valid one, i think govt. have struggled for years to extract a fair or atleast progreesive tax burden out of the whole high earning self-employed/contractor/limited company thing. I'd argue that if your a PAYE employee on a high salary, your going to be paying the full higher rate tax on earnings above the threshold....and with things like company cars, those things will be taxed.
It strikes me as the limited company contractors who require the services of accountants to minimse the tax they are required to pay. Rather than the PAYE employees in the private sector on 60k+ who can't avoid the tax burden ? And may not have the gold plated pensions that we tend to associate with some high profile, high paid public sector jobs.
14th December 2009, 01:26 PM #93
Yes - the indirect taxes mentioned above are very unfair to the lower paid.
Originally Posted by srochford
Progressive income taxation (if there's confusion) is where the percentage rate paid grows steadily as the rate of pay increases - which was the practice until until about 25 years ago - bad for the rich - better for the bulk of everyone else.
I'd agree wholeheartedly about the second point - a friend of mine (self employed) reckomed that if you pay any tax at all - you need a new accountant - an understandable attitude, but allowing this sort of thing to happen is just morally and practically wrong in my humble opinion
14th December 2009, 01:35 PM #94
Wealthy people don't remain wealthy by being generous to the less well off.... unless you are very wealthy like Bill Gates
14th December 2009, 03:51 PM #95
- Rep Power
With the UKs yob culture and anti social behaviour itt wont take to long for it to get worse.[/QUOTE]
I am a bit sad that there is a perception that we have a yob culture in the UK, I am even more sad that RoF has bought into the way the media portray people/situations.
The media prtrayal of USA is none too good it has to be said.
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