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The Income Tax Question
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A poor man earns £100 a week and pays 10 per cent of his income in tax thus contributing £10 a week to public services. A richer man earns £1,000 a week and pays ten per cent of his income in tax, contributing £100 a week. That is ten times as much tax as the poorer man. I really don't see why he should pay twelve, 15 or 20 times as much tax as the poorer man. Very simplistic I know but I fail to see how differential tax rates are 'progressive', especially as the richer man spends money and contributes vastly more in indirect taxation like VAT, may employ people and pay corporation tax and employers' NI contributions.
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For more on marking an answer as the "Best Answer", please visit our FAQ.Douglas, I know what a House of Cards is but the point is if no one invests the time and money initially into building a house of any description there are no bricklayers or plumbers or electricians.
drmorgans, I'm not sure where the idea of a lack of investment in the business is coming from nor the thought that the man who does a mundane job should reap rewards equal to those whose input and responsibility is far greater. If that happened filling positions that require specialist knowledge or skill would be very difficult indeed.
drmorgans, I'm not sure where the idea of a lack of investment in the business is coming from nor the thought that the man who does a mundane job should reap rewards equal to those whose input and responsibility is far greater. If that happened filling positions that require specialist knowledge or skill would be very difficult indeed.
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// as wages rise so do production costs and hence prices which leaves the man on the production line no better off //
The general trend in the private sector is that pay awards are subject to how the company has performed! Invariably a company that has underperformed (to the dismay of its employees) will probably announce a pay freeze. In a company where business has thrived in a given year, it may choose to offer wage increases in line or above inflation. In either of the above scenarios, this does not necessarily mean production costs will increase.
Is it not reasonable then, to suggest that companies to remain competitive, they do not want to be seen, passing on rising costs to their customer base. Therefore every effort is made to stem the rise in production costs.
The general trend in the private sector is that pay awards are subject to how the company has performed! Invariably a company that has underperformed (to the dismay of its employees) will probably announce a pay freeze. In a company where business has thrived in a given year, it may choose to offer wage increases in line or above inflation. In either of the above scenarios, this does not necessarily mean production costs will increase.
Is it not reasonable then, to suggest that companies to remain competitive, they do not want to be seen, passing on rising costs to their customer base. Therefore every effort is made to stem the rise in production costs.