The Tiered Income Tax System. Why ?
Discussion
As a non economist can someone please explain to me why we have a tiered tax system. the two parts that I would like to understand are :--
1] Why a tax free allowance
2] Why 20% to a threshold then 40% then 50%
Surely if we had a simplified 20% flat rate on all income for all people we would require less civil servants to work on it, perhaps have a lot less individuals trying to find ways round it and maybe just maybe have the same overall income for the treasury.
I fail to understand why, if I worked harder in my early years to progress up the greasy pole that I actually pay more tax exponentially on my earnings as they increase.
Help out a dimwit................
1] Why a tax free allowance
2] Why 20% to a threshold then 40% then 50%
Surely if we had a simplified 20% flat rate on all income for all people we would require less civil servants to work on it, perhaps have a lot less individuals trying to find ways round it and maybe just maybe have the same overall income for the treasury.
I fail to understand why, if I worked harder in my early years to progress up the greasy pole that I actually pay more tax exponentially on my earnings as they increase.
Help out a dimwit................
timbo999 said:
Firstly, I suggest looking up the meaning of the word exponentially!
I would have thought this was bleeding obvious - its all about ability to pay...
Perhaps a poor use of that word. I suppose what I was trying say was that we reach threshold a and its 20% at threshold B the balance is taxed at 40% and then depending on which party are in there may be a 3rd threshold [never reached it so don't know] and should I have the audacity to have a company car and fuel card it get taxed at the higher rate too !I would have thought this was bleeding obvious - its all about ability to pay...
As to fair I fail to see what is fair about it hence why I asked. I view it as unfair. As the income amount increases the taxation in £ increases if a flat rate is applied. After all we do not spend % we spend £ in the shops.
So again assuming 20 or 25 or 30% was the number it should apply equally to all who work on every pound earned. Why burden those who are achieving with a greater load is my question.
Whilst we are at it why have PAYE & NI why not just one deduction, after all its all going to the country whether its HMRC or whomever.
A
Chipchap said:
Surely if we had a simplified 20% flat rate on all income for all people we would require less civil servants to work on it,
The cost of collecting income tax is tiny.Chipchap said:
Help out a dimwit................
The Government has to raise a certain amount of money through income tax. Most tax is paid by a few high earners. If the rate was flat they'd pay less, so, guess what, everybody else pays more. Whoever imposes increased taxes on the majority of people isn't going to get re-elected.I'm no economist but I've always liked the idea of a flat tax. I'm all for simplicity and a shorter tax code and smaller civil service to collect it is a good thing.
One rate for all is about as fair as it could be- I don't see what is 'progressive' or fair that higher earners pay proportionally more than others.
One rate for all is about as fair as it could be- I don't see what is 'progressive' or fair that higher earners pay proportionally more than others.
NPI said:
Chipchap said:
Surely if we had a simplified 20% flat rate on all income for all people we would require less civil servants to work on it,
The cost of collecting income tax is tiny.Chipchap said:
Help out a dimwit................
The Government has to raise a certain amount of money through income tax. Most tax is paid by a few high earners. If the rate was flat they'd pay less, so, guess what, everybody else pays more. Whoever imposes increased taxes on the majority of people isn't going to get re-elected.Chipchap said:
erhaps a poor use of that word. I suppose what I was trying say was that we reach threshold a and its 20% at threshold B the balance is taxed at 40% and then depending on which party are in there may be a 3rd threshold [never reached it so don't know] and should I have the audacity to have a company car and fuel card it get taxed at the higher rate too !
As to fair I fail to see what is fair about it hence why I asked. I view it as unfair. As the income amount increases the taxation in £ increases if a flat rate is applied. After all we do not spend % we spend £ in the shops.
So again assuming 20 or 25 or 30% was the number it should apply equally to all who work on every pound earned. Why burden those who are achieving with a greater load is my question.
Whilst we are at it why have PAYE & NI why not just one deduction, after all its all going to the country whether its HMRC or whomever.
A
I said it was about ability to pay... I didn't say it was fair... see note above about votes!As to fair I fail to see what is fair about it hence why I asked. I view it as unfair. As the income amount increases the taxation in £ increases if a flat rate is applied. After all we do not spend % we spend £ in the shops.
So again assuming 20 or 25 or 30% was the number it should apply equally to all who work on every pound earned. Why burden those who are achieving with a greater load is my question.
Whilst we are at it why have PAYE & NI why not just one deduction, after all its all going to the country whether its HMRC or whomever.
A
The_Burg said:
20.8% or there abouts. Less the admin. SO f@ck all.
Where on earth did you get that from?... http://www.bbc.co.uk/news/uk-politics-22575135timbo999 said:
The_Burg said:
20.8% or there abouts. Less the admin. SO f@ck all.
Where on earth did you get that from?... http://www.bbc.co.uk/news/uk-politics-22575135Chipchap said:
So again assuming 20 or 25 or 30% was the number it should apply equally to all who work on every pound earned.
In the example where 2 people the same hourly wage but one always does overtime and one never does, is it fair for the person who is working "harder" to pay "more"?As I said in an earlier reply, "fair" is not an absolute.
Why don't we simply set a tax liability of £2,500 per year on everyone, no matter their ability to pay? I'm sure some people would consider that "fair".
whoami said:
I would check the background of the contributor to that piece if I were you...
There's two... which are you slagging off exactly?!? But I'm not holding up that account as any better than any other, but practically all analysis I've seen points to a flat rate in the 30s percentage wise...Gassing Station | Finance | Top of Page | What's New | My Stuff