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.

[bednobs]

is you pontificating on the tax system and what it should be considered newsworthy now?

[drmorgans]

And foreign holidays and BMWs (other expensive cars are available) and cocaine ("God's way of saying you've got too much money")

[Zacs-Master]

‘A poor man earns £100 a week and pays 10 per cent of his income in tax’

Well that’s incorrect for starters. Someone earning £100 a week wouldn’t earn enough to start paying any tax.

[Paigntonian]

Zacs: I said it was simplistic. Just trying to get a point across without delving into personal allowances etc.

[Paigntonian]

bednobs; Of course, it's newsworthy. Watch the news.

[drmorgans]

Aren't most economists sceptical of "trickle down" tax policies?

[ZebuSanctuary]

// I really don't see why he should pay twelve, 15 or 20 times as much tax as the poorer man. //

Is it fair on the poor man when a company awards a 10% increase in wages. Only to see the upper echelons of management receiving a rise of 15 to 20 times more than the poor man on the shop floor?

[Paigntonian]

Zebu: Presumably the company feels that higher rewards for valued employees is perfectly acceptable in market circumstances. It's called a market economy.

[FatticusInch]

You need to take it with the government, or write to Tobias Ellwood, your local MP.

[Zacs-Master]

Isn’t Kevin John Foster MP for Paignton?

[ZebuSanctuary]

// the company feels that higher rewards for valued employees is perfectly acceptable //

Unfortunately this leads to an ever widening inequalities gap. For example; rich people being able to jump the queue with private health care.

Therefore do not be surprised if this raises a moral question. Invariably certain groups will rise up in fierce opposition.

[Untitled]

inequality at an extreme level can be as damaging to society as enforced equality… it allows those at the top disproportionate power and influence over those poorer than them, which inevitably leads to poorer citizens being treated worse by a state that relies on the power and resources of the rich. In severe cases the power of the super-rich can distort or impede democracy… i would suggest britain is closer to this than it should be.

countries seem to end up happiest with limited levels of inequality…. that way there’s room for aspiration but not plutocracy. Denmark and Finland are two of the happiest countries in the world even though they are not as wealthy as their neighbours. Quality of life is not just about GDP per capita….

[ichkeria]

The immediate (news-related) issue is whether we can afford to borrow money just now to cut taxes.
Thatcher would not have done that I am sure.

[FatticusInch]

Zacs-Master
//Isn’t Kevin John Foster MP for Paignton?//

He is. But that’s not Paigntonian’s MP.
I’m sure you knew though.

[drmorgans]

Gives a new slant to "mates rates" doesn't it.

[douglas9401]

"Presumably the company feels that higher rewards for valued employees is perfectly acceptable in market circumstances. It's called a market economy."

Aye, until the cleaning crew come down with Covid and fat lad in the Beemer can't drive a mop or hoover far less wash a cup or clean the toilet after himself and the whole house of cards gets shaky.

[Hymie]

The main reason to have higher rates of tax for higher earners is that everyone will require a minimum amount for essentials (food, accommodation, heating, travel etc). Once those requirements are met and people are earning many times the amount needed for essentials, then a higher tax rate will not significantly impact their quality of life.

In support of the above, to my mind the nil tax band should be set as high as possible to assist those on low pay. But an observation on State benefits for the poorer in our society; this subsidies companies who are able to pay minimum wage, which would otherwise not be a wage on which it was possible to live. But weaning working people off benefits and forcing employers to pay a reasonable salary does not help the mega-rich who are benefiting from our subsidised low wage economy.

[naomi24]

Without the fat lad in the Beemer there is no house.

[naomi24]

^that re: 19.42.

[douglas9401]

//"House of cards" is also an expression that dates back to 1645 meaning a structure or argument built on a shaky foundation or one that will collapse if a necessary (but possibly overlooked or unappreciated) element is removed.//