Quizzes & Puzzles1 min ago
Flat rate income tax
6 Answers
What is the argument against a flat rate tax (i.e. everybody pays, say, 25% income tax on earnings over a certain amount - the personal allowance).
Surely it's the fairest way? A person who earns �100k will still pay much more than somebody earning �20k - why should they be financially punished for being sucessful?
And why do no current political parties in the UK advocate such a scheme??
Surely it's the fairest way? A person who earns �100k will still pay much more than somebody earning �20k - why should they be financially punished for being sucessful?
And why do no current political parties in the UK advocate such a scheme??
Answers
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Some American economist has suggested replacing all taxes with just one.
He suggested taxing all financial transactions at 0.3%. Banks just divert money straight into some kind of tax account.
Richer people spend more money and therefore will pay more than the less fortunate. So it's automatically fairer.
It wont cover what's made in taxes now but it does mean that the whole system built around collecting, policing and managing taxes will be entirely redundant saving countless millions.
I think it sounds like a great idea.
He suggested taxing all financial transactions at 0.3%. Banks just divert money straight into some kind of tax account.
Richer people spend more money and therefore will pay more than the less fortunate. So it's automatically fairer.
It wont cover what's made in taxes now but it does mean that the whole system built around collecting, policing and managing taxes will be entirely redundant saving countless millions.
I think it sounds like a great idea.
I haven't done my maths, so this is a bit of a punt, but I'm guessing you can squeeze more money out of a system such as the existing one.
The UK has several expensive public programmes (aside form the standing army and police force, the NHS, welfare etc.), and that's expensive - so more money's needed.
The UK has several expensive public programmes (aside form the standing army and police force, the NHS, welfare etc.), and that's expensive - so more money's needed.
Flat rate income tax places a much bigger burden on the lower income than the higher. To get the same revenue as present the rate would have to increase from the current base level - meaning that the lower earners would pay more income tax and the higher earners would pay less.
The Poll Tax was in effect a flat rate tax - and look how unpopular that was with the electorate.
The Poll Tax was in effect a flat rate tax - and look how unpopular that was with the electorate.
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Good points, well made. I wonder what percentage of people in this country earn more than �40k? Anyone know?
A staff colleaugue of mine berated me recently because I don't pay as much tax as Gordon Brown would like me to. Of my gross income, I pay about 23% in taxes (Corporation Tax and Income tax) because I work through a composite company and pay dividends to my wife. But my argument was that I still pay a lot of tax in straight monetary terms, even if the percentage is lower than it "should" be. My annual tax bill is more than i earned when I graduated five and a half years ago. I think I'm contributing a decent amount to the treasury.
Of course, it's not up to me to decide what a decent amount is but I'll do everything I can, within the law, to minimise it.
A staff colleaugue of mine berated me recently because I don't pay as much tax as Gordon Brown would like me to. Of my gross income, I pay about 23% in taxes (Corporation Tax and Income tax) because I work through a composite company and pay dividends to my wife. But my argument was that I still pay a lot of tax in straight monetary terms, even if the percentage is lower than it "should" be. My annual tax bill is more than i earned when I graduated five and a half years ago. I think I'm contributing a decent amount to the treasury.
Of course, it's not up to me to decide what a decent amount is but I'll do everything I can, within the law, to minimise it.
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