Quizzes & Puzzles60 mins ago
Income Tax
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For more on marking an answer as the "Best Answer", please visit our FAQ.If you abolish all direct taxation and make VAT 30% or 40% you will just encourage people to try to avoid paying it (like they do with petrol, fags and drink).
People will either go abroad and buy things, or things will be smuggled in from Europe to avoid the tax (like happens with fags and drink).
Also with VAT at that high amount people will pay cash- in-hand for jobs done by tradesmen such as builders or car repairers (which goes on a lot already) so far less tax will be lost.
While it would be great to simplify the income tax situation, we cannot have a single level of income tax because we do not have a single level of INCOME.
Someone who is working part time, say 20 hours a week, should not expect to pay the same level of income tax as say Robbie Williams.
For lowly paid people (say on less than �10,000 a year) it is reasonable to let them earn that and pay no tax.
For those in the next income bracket, say �10,000 to �25,000, it is reasonable to get them to pay 10% or 20% or whatever.
And so it goes on, up to 40% for those earning a good salary.
But suppose a rich boss of a company decides to pay himself NO salary, but has a company house, company car, company chauffer, company petrol, company food acount and so on. How do you decide how much tax he pays, after all he has no salary.
So you have to start taxing his BENEFITS, the car, the house, the petrol card and so on. Then it starts to get complicated.
Also what about someone who starts a business, but the first year LOSES money, how much tax should they pay, and what should they pay it on.
Of course there are others who do not EARN money from a job, but get it from investments or property. The Duke of Westminster is one of the richest men in the UK, but only because he owns huge parts of central London, how much tax should he pay ?
Rupert Murdoch spends a lot of time in the UK, but does not earn a salary in the UK, so he pays NO UK income tax. How much should he pay.
I agree that it is complex, and when I fill my tax form in each year I am staggered by the different sections included, but we have to accept that in today's complex world it is never going to be simple.
Hi vehelpfulguy
Thanx for the input but, yes the part-timer would pay the same level of tax as Robbie Williams but of course Robbie Williams would pay a lot more because he earns a lot more. Thats my point you pay a set level of tax on every pound earned. It would obviously have to be low, say 5p/�, but no one would be able to avoid paying it. After all we all pay VAT and this is at the same level for everyone no matter how much you earn.Everything we buy is not based on our ability to pay for it. The price of food and fuel is not based our country's basic wage levels
If you are in business, such as your Rupert Murdochs etc, you can reclaim VAT. Ordinary people cannot.
Investment and rental incomes would be treated in the same way. Every penny if income would be taxed no matter from what source. You might like to put a figure of a level of income whereby no tax would be paid but then this would benefit both the rich and the poor.
Anyone who owns property in the UK would pay whether or not they are resident in the UK. All money earned from no matter what source in the UK would be taxed accordingly. My idea would be to do away with any method of either avoiding to pay or claiming back money.
Regards