The Income Tax Question

[Paigntonian]

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.

[drmorgans]

Sure, but if the fat lad (other physiques and genders are available) spends the money on Beemers and nice holidays rather than investing in training staff and new plant and infrastructure then the whole caboodle goes kaboom.

[naomi24]

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]

But most people who do "mundane jobs" aren't being remunerated anywhere near what their "betters" are. Often they are on wages that have to be subsidised by the government so they can afford to eat, heat their homes and clothe their children.

[naomi24]

That's true in some cases but then there's always that knock-on effect because as wages rise so do production costs and hence prices which leaves the man on the production line no better off.

[drmorgans]

(or woman)

[1ozzy]

So the government should top up wages so the investors can reap their profits and pay *** all tax?

[drmorgans]

How else is the fat lad (ladette) going to pay for his (or her) shiny new Beamer and holiday to Majorca?

[1ozzy]

Well, that's a point

[naomi24]

drmorgans, do you think the fat lad shouldn't reap rewards for the time, effort and money he's invested in building a company?

[drmorgans]

Of course she should, but equally she should pay her staff for their contribution to the business and not rely on the government to top-up minimum wage salaries, poor conditions when other businesses in the same sector are fairer to their staff.

[ToraToraTora]

You are correct Paigtnonian, but further to that direct taxation itself makes no sense. Most of it is paid by the worst off. It's beloved of socialists but essentially is illogical.

[naomi24]

I agree, but how much is enough? If he pays more, costs rise, prices rise, the worker ends up no better off and there's little left for further investment. It's a vicious circle really.

[drmorgans]

Cothm College, may I suggest, in the most respectful way possible, that you "do one"? Thank you and goodbye.

[ZebuSanctuary]

// 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.

[Untitled]

it is awfully convenient that the end result of naomi24’s ideology is that huge numbers of people simply have to lump it with pay that is insufficient for living on while those above them enjoy huge windfalls

[naomi24]

Untitled, where did I say that?

[Untitled]

Here:

“ If he pays more, costs rise, prices rise, the worker ends up no better off and there's little left for further investment. It's a vicious circle really”

[naomi24]

Untitled, gosh. That’s some imagination you have. Telling it like it is doesn’t warrant that response. it’s simple enough.