Should We Re-Jig Our Tax System?

[Hypognosis]

A growing proportion of our population do not make their discretionary spending in areas which, traditionally, have been major revenue gernetators: they don't drink, do not indulge in games of chance (lottery, gambling) and smoking has declined to a minority activity.

With, proportionately, fewer people paying extra taxes, voluntarily, in these ways, is it time to increase PAYE rates, across the board?

If our abstemious fellow citizens decline to come to the pub with us for a drink and a chat, we need to get the missing tax take off them, somehow.

How about taking tax off booze cigs and gambling altogether and lumping it all onto PAYE so that we, the electorate, know at a glance what it is costing us to run this country?

[Obiter]

VAT was introduced when we joined the EEC (as it then was). The rate at the time was 5% rather than the 20% it is today. It replaced the old purchase tax which was levied on a restricted number of goods.

[Hypognosis]

@EDDIE51

//You are right , alcohol, tobacco and fuel tax are not factored into benefit rates. if you are on benefits you are assumed not to need those things.//

What about jobseekers? Isn't petrol money factored into the costs of their jobseeking? It's not enough for a week's food and accommodation, so it's purpose is clearly to cover travel costs only (and maybe a sandwich for lunch).

[Hypognosis]

Thanks, Obiter.

I thought it came back down from 20, back to 17.5?

Thanks for the correction anyway.

[New Judge]

You seem to be operating under a few misunderstandings, hypo.

"Government deducts and then does things with it that the electorate instruct them to do"

The government does no such thing. Each party offers a package of measures to the electorate at General Election time. These measures are usually designed to upset as few people as possible. Voters should choose a person to send to Westminster to lobby Parliament on individual issues on their behalf. Instead most voters then cast their vote by choosing the party whose package they dislike the least (as none of them is likely to entirely please anybody) and only rarely do they pay attention to the actual candidates standing for election. The result is that everybody gets what nobody wants. The government that is formed from this fiasco then goes on to do exactly as it wishes for the following five years with little regard for the promises made before the election. The very last thing they do is to take instructions from the electorate via the MPs.

VAT was introduced as a requirement of our membership of the EU. It replaced purchase tax. It is just about the most ridiculous and cumbersome form of taxation that could be devised with a huge proportion (estimates vary from 50% to 90%) of the payments made being subsequently reclaimed. The cost of its administration is enormous; more than 22,000 civil servants are employed to collect it at a cost of more than £1bn a year. Every company that is registered for VAT spends a sizeable chunk of its revenue collecting tax for the government only to have to spend more time and money later as most of them reclaim nearly all of it. The potential for fraud is huge. It is predominantly "retail" end users who foot the eventual bill and a simple purchase tax would do just the same job. But we cannot have that whilst we remain in the EU.

Income tax, NI and VAT do not tell the whole story. A simpler way at looking at the tax take is to examine how much of the nation's GDP (the amount the country earns) is spent by the government. At present it is around 51% meaning that more than half of all money earned by UK plc is spent by the government. Like I said, better the government first looks for ways to reduce expenditure before it examines the way it is raised.

[Old_Geezer]

I'd rather they did both at once.

It is good to have what is agreed to be a fair tax system with each paying according to their means and thus to what they have got out of being in this society. But it should be an ongoing task to ensure what is collected is spent sensibly. The risk is that concentrate on the second thing and the first is forever on the 'back burner'.

[Theland]

Court fines levied as a percentage of income would be fairer

[New Judge]

Most court fines are levied as a proportion of income, Theland.

The lowest ("Band A") are levied on the basis of half a week's net income (reduced by up to a third for an early guilty plea). I've no idea how Mr Brown (of whom I'd never heard until today) came to be fined just £30. Assuming he pleaded guilty and assuming his offence attracted a fine at Band A it means the court must have believed he had £90 a week coming in. That being the case he would almost be better off giving up the entertainment business and going on to Jobseekers' Allowance (currently £72.40 pw).

[Theland]

Thanks. Never been caught, sorry, fined.

[Hypognosis]

Looks like the three posts about court fines fell off another thread and into this one. What happened there?

[Hypognosis]

@New Judge

//The result is that everybody gets what nobody wants. The government that is formed from this fiasco then goes on to do exactly as it wishes for the following five years with little regard for the promises made before the election. The very last thing they do is to take instructions from the electorate via the MPs. //

I feed you the lines, you take the glory. Deal?

No, wait…


;-)

[Hypognosis]

@New Judge

Regarding the GDP angle; the gubmint is gathering corporation taxes as well, I was attempting to focus attention on what people pay individually, with a certain emphasis on the way they pay extras, voluntarily.

Well, the consumption is voluntary, the tax is foisted on us.

Note: I affirm that I have not read any UKIP election material, nor newspaper or wikipedia articles about same. Any similarity to persons, living or inebriated, is entirely coincidental.