40p Tax band - history
Discussion
Rovinghawk said:
simoid said:
But despite the fact that the percentages are the same, 50% of the income of someone on £10,000 p.a. is a greater financial burden than 50% of the income of someone on £10,000,000 p.a.
So that can be an incentive to be successful.RH
That wouldn't be fair though.
randlemarcus said:
simoid said:
But despite the fact that the percentages are the same, 50% of the income of someone on £10,000 p.a. is a greater financial burden than 50% of the income of someone on £10,000,000 p.a.
Absolutely true, as long as both people work in a similar job, live in similar houses, and the state provides equivalent healthcare and education. What's that? They don't? Gosh.Obviously the person on £10k is not in the same job as the person on £10m. Perhaps waiting staff vs footballer.
It's not likely they're in similar houses, either.
The £5k is a greater burden on the first person than £5m is on the second, though, so a flat tax rate is unfair.
scenario8 said:
As a minor aside, why should pensioners be free from income tax?
They aren't.However, for a long time, they have had additional personal tax allowances once they reach key milestone ages - such as 65,75 and 85. These extra allowances were taken away from them if their total income in any given tax year exceeded a certain level - usually around £22,000. This reduction Is quite a complicated calculation known as "Age Abatement" and currently makes some pensioner's tax affairs quite difficult to work out.
This is changing.
The extra age related allowances are now frozen and allowances for non-pensioners are being increased gradually until they will eventually be the same for everybody, irrespective of their age.
Edited by Eric Mc on Friday 7th December 13:03
Fine, you'd be payng a bit of income tax on that income. For most pensioners receiving 14k pa as a pension they will have received a nice tax benefit in having saved in that manner - or receive the 14k (or part thereof) as deferred income.
And that is without mentioning that pensioner will have been receiving all manner of public services for a longer time than a younfer person (from the obvious such as street lighting and protection of the rule of law (in all its manifestations) to the less obvious such as protection from unsafe/misrepresented goods and countless others). A pensioner is also likely to be or about to be gobbling up state help through the health service like a great big gobbling thing, too.
And that is without mentioning that pensioner will have been receiving all manner of public services for a longer time than a younfer person (from the obvious such as street lighting and protection of the rule of law (in all its manifestations) to the less obvious such as protection from unsafe/misrepresented goods and countless others). A pensioner is also likely to be or about to be gobbling up state help through the health service like a great big gobbling thing, too.
What I found a bit annoying about question time last night was the fact that nobody seemed to acknowledge that to arrive on a large salary, more often than not that person worked bloody hard for it, the audience were almost suggesting that some people were born rich and others poor, god forbid anyone poor should work and strive to become one of the other camp.
I see. I thought you were suggesting it was a goood thing in itself that (almost all) pensioners would be removed from paying IT if the zero rate threshold was moved up to 20k (and then went on to exemplify the case of a 14k pension). My point was that I didn't and don't see why necessarily removing a pensioner receiving £19.999 pa from IT was in itself desirable - or atleast being comparaitively so desirable to have been mentioned when not also mentioning the benefits to those of working age earing the same amount.
scenario8 said:
I hope I live to that age, too, but I don't see how it is partcularly relevant. I think you misunderstand me if you believe I am comparing those of pensionable age to "young" people. People in their fifties and sixties are younger than those of pensoable age (usualy). I'm just curious as to why, becessarily, those of pensionable age sohould have their income treated so very favourably differently to those younger than them - who may indeed be earning less than the person of pensionable age.
Just for context I'm in my thirties and have never worked for a company that provides a pension. (Slightly untrue as my current employer provides a money purchase scheme with no choice of investment model where the company will contribute up to 2% (of basic pay) and I am able to match that schedule. Basic pay in my industry is usually much less than half gross pay. I know I'm financially screwed. Like many my age pesnions are something other people are likely to receive - but that elephant in the UK's room would be going massively off topic.)
See my post above. The rules are changing and within two years there will be no difference in tax treatment based on age.Just for context I'm in my thirties and have never worked for a company that provides a pension. (Slightly untrue as my current employer provides a money purchase scheme with no choice of investment model where the company will contribute up to 2% (of basic pay) and I am able to match that schedule. Basic pay in my industry is usually much less than half gross pay. I know I'm financially screwed. Like many my age pesnions are something other people are likely to receive - but that elephant in the UK's room would be going massively off topic.)
Your wish has come true.
And, you do not seem to be aware that pensioners earning over £22,000 or so lose all the additional allowances they would have got based on their age anyway - so better off pensioners receive NO extra allowances already.
Edited by Eric Mc on Friday 7th December 13:32
simoid said:
But despite the fact that the percentages are the same, 50% of the income of someone on £10,000 p.a. is a greater financial burden than 50% of the income of someone on £10,000,000 p.a.
If we assume that there is (as now) a threshold at which a person starts to pay tax, then the lower income earner may well not pay anything in tax - their 'happiness' would be tax-free!Mark Benson said:
simoid said:
But despite the fact that the percentages are the same, 50% of the income of someone on £10,000 p.a. is a greater financial burden than 50% of the income of someone on £10,000,000 p.a.
If we assume that there is (as now) a threshold at which a person starts to pay tax, then the lower income earner may well not pay anything in tax - their 'happiness' would be tax-free!A tax free allowance means a system of progressive taxation
A small point to make here. Im all for a flat rate tax, mainly based on that if you earn 10k a year you have a lifestyle that supports this. So you buy things that you could spend 10k on.
Same as if you earn 65k, you have a lifestyle that supports, you buy things up to 65k.
So why can the people that earn more "afford it". They can afford it, just as much as the guy who earns 10k.
In fact another point to make, i was looking into moving to the US quite recenlty and looked into the tax system.
So while the tax rates are lower in general they also have an increasing scale for tax.... but the difference here lies in that they can offset tax they have already paid on their tax return and actually pay less. The tax paid, is actually treated as an expense, rather than an actual tax.
So what that means is in UK terms, they could offset VAT, Council tax, road tax, mortgage interest (i think) amoung other things against their income. It means they are being rewarded for spending their money i suppose.
This could work here.
I suppose it could support a flat rate tax system.
Same as if you earn 65k, you have a lifestyle that supports, you buy things up to 65k.
So why can the people that earn more "afford it". They can afford it, just as much as the guy who earns 10k.
In fact another point to make, i was looking into moving to the US quite recenlty and looked into the tax system.
So while the tax rates are lower in general they also have an increasing scale for tax.... but the difference here lies in that they can offset tax they have already paid on their tax return and actually pay less. The tax paid, is actually treated as an expense, rather than an actual tax.
So what that means is in UK terms, they could offset VAT, Council tax, road tax, mortgage interest (i think) amoung other things against their income. It means they are being rewarded for spending their money i suppose.
This could work here.
I suppose it could support a flat rate tax system.
Eric Mc said:
See my post above. The rules are changing and within two years there will be no difference in tax treatment based on age.
Your wish has come true.
And, you do not seem to be aware that pensioners earning over £22,000 or so lose all the additional allowances they would have got based on their age anyway - so better off pensioners receive NO extra allowances already.
I'm aware of quite a few of the differences, thanks. I was enquiring specifically about the wording in a previous post referring to moving IT thresholds up to £20k being specifically beneficial.Your wish has come true.
And, you do not seem to be aware that pensioners earning over £22,000 or so lose all the additional allowances they would have got based on their age anyway - so better off pensioners receive NO extra allowances already.
Edited by Eric Mc on Friday 7th December 13:32
simoid said:
Mark Benson said:
simoid said:
But despite the fact that the percentages are the same, 50% of the income of someone on £10,000 p.a. is a greater financial burden than 50% of the income of someone on £10,000,000 p.a.
If we assume that there is (as now) a threshold at which a person starts to pay tax, then the lower income earner may well not pay anything in tax - their 'happiness' would be tax-free!A tax free allowance means a system of progressive taxation
shibby! said:
A small point to make here. Im all for a flat rate tax, mainly based on that if you earn 10k a year you have a lifestyle that supports this. So you buy things that you could spend 10k on.
Same as if you earn 65k, you have a lifestyle that supports, you buy things up to 65k.
So why can the people that earn more "afford it". They can afford it, just as much as the guy who earns 10k.
I suppose it could support a flat rate tax system.
Do you agree that removing 30% of £10k annual earnings is a greater burden than removing 30% of £10m annual earnings?Same as if you earn 65k, you have a lifestyle that supports, you buy things up to 65k.
So why can the people that earn more "afford it". They can afford it, just as much as the guy who earns 10k.
I suppose it could support a flat rate tax system.
Mark Benson said:
simoid said:
Mark Benson said:
simoid said:
But despite the fact that the percentages are the same, 50% of the income of someone on £10,000 p.a. is a greater financial burden than 50% of the income of someone on £10,000,000 p.a.
If we assume that there is (as now) a threshold at which a person starts to pay tax, then the lower income earner may well not pay anything in tax - their 'happiness' would be tax-free!A tax free allowance means a system of progressive taxation
Those with higher incomes pay a greater percentage than those with lower incomes.
I'm arguing in favour of this, and against taxing the same percentage of everyone's incomes.
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