RE: Govt Rakes it in
Friday 24th May 2002
Govt Rakes it in
The coffers should be bulging thanks to your generous contributions
Discussion
Tax in the UK just now:
Basic income tax: 23% or 40%
VAT 17.5%
National insurance 9% up to a point
Petrol tax 5%
(22 billion divided by 22 million drivers = £1000 per driver. Average income is ~£20k so 5% on approx average.
Council tax 5% (typically £1000 say, as above to get 5%)
Total: 59% or 76% of your pay rise goes in tax. OK this is an extremely crude calc, but even so ... as Ted says, what the hell do they do with it all?
Haven't even considered the impact of alcohol tax, company tax, fuel tax on delivery vehicles, North Sea Oil tax ... And in fairness, the reductions due to personal tax free allowances and starting tax rate of 10%(?)
That, and death, I suppose ...
Basic income tax: 23% or 40%
VAT 17.5%
National insurance 9% up to a point
Petrol tax 5%
(22 billion divided by 22 million drivers = £1000 per driver. Average income is ~£20k so 5% on approx average.
Council tax 5% (typically £1000 say, as above to get 5%)
Total: 59% or 76% of your pay rise goes in tax. OK this is an extremely crude calc, but even so ... as Ted says, what the hell do they do with it all?
Haven't even considered the impact of alcohol tax, company tax, fuel tax on delivery vehicles, North Sea Oil tax ... And in fairness, the reductions due to personal tax free allowances and starting tax rate of 10%(?)
That, and death, I suppose ...
quote:
Don't forget employers NI. Its a tax. Just cos it doesn't appear, then disappear, from your pay packet doesn't mean its not a tax on what your employer pays to employ you. Add another 12%.
Yep. As an employer of both others and myself I can see exactly how much of the business' revenue turns into payable salaries (oh and profits...) and how much goes in tax. Its terrifying. "Income tax" is a bit over 50%. Then everything you buy is taxed. I wouldn't be surprised of the "real" rate of tax is as high at 75-80%.
Of course. That's only true if you are one of the honest, hardworking British "middle class" who get to pay for everything and receive nothing. But even for lower range earners tax must still be 50-60%.
Makes you want to DO something about it doesn't it? My problem is all the baby kissing and lying to the public to get elected s**t would just make me suicidal.
Rant over...sorry.
quote:
Depending on which way you look at it yes, its either 80% odd or 300% odd.
Lets not forget stamp duty either, which I have to say was a bit of a shock being a first time buyer!
Matt.
Did you notice that stamp duty is now tiered? Over 250K its up from 1% to 3%! Over half a mil its 4%.
Move house: Give Greedy Gordo 20 grand. For moving house for f***s sake! This is a tax on the South of England where ordinary properties have ludicrous values. Speaking as a Northener who *has* ti live in the South for business this sticks in the craw a bit...
Sorry. Another rant. I'll get me coat...
The thing that is so ludicrously unfair about Stamp Duty is that, unlike Income Tax where you only get taxed at higher rate on the amount that exceeds the higher rate threshold, once you go over the threshold on Stamp Duty you get taxed on the whole amount.
eg. a house that is £249,999.99 incurs a stamp duty of £2,500 whilst a house that is £250,000.01 incurs a stamp duty of £7,500.
It also means that if you have a house worth round about £240k or so it's value will hit a barrier at £250k as buyers are very unwilling to go above £250k due to the extra Stamp Duty, making houses in this price range a really bad investment.
Oh, and it also means that if you're buying in the £250k region, you'll find plenty of houses at around £245k and plenty at £290k+, but few in between.
No, I'm not an Estate Agent, I've just moved twice in 2 years and given the Treasury a sh*t load of money in teh form of Stamp Duty as a result.
>> Edited by JonRB on Friday 24th May 13:32
eg. a house that is £249,999.99 incurs a stamp duty of £2,500 whilst a house that is £250,000.01 incurs a stamp duty of £7,500.
It also means that if you have a house worth round about £240k or so it's value will hit a barrier at £250k as buyers are very unwilling to go above £250k due to the extra Stamp Duty, making houses in this price range a really bad investment.
Oh, and it also means that if you're buying in the £250k region, you'll find plenty of houses at around £245k and plenty at £290k+, but few in between.
No, I'm not an Estate Agent, I've just moved twice in 2 years and given the Treasury a sh*t load of money in teh form of Stamp Duty as a result.
>> Edited by JonRB on Friday 24th May 13:32
What's interesting is that a lot of studies show that maximum tax take for a government occurs at around 50% of total GDP. This is because once it gets too high people stop give enough of a toss to work harder to earn more - with the inevitable impact on the economy.
To put it another way - if total tax is zero the gov't gets nothing obviously. If it's 100% they get nothing because nobody does anything that involves money. So the max is somewhere in between, and I'm fairly sure the figure is around 50%.
It doesn't take long to figure out that we're well ebyond that level now - in fact I'm sure the governement admitted that quietly not long ago - so what the f*k are they playing at?
To put it another way - if total tax is zero the gov't gets nothing obviously. If it's 100% they get nothing because nobody does anything that involves money. So the max is somewhere in between, and I'm fairly sure the figure is around 50%.
It doesn't take long to figure out that we're well ebyond that level now - in fact I'm sure the governement admitted that quietly not long ago - so what the f*k are they playing at?
quote:
It doesn't take long to figure out that we're well ebyond that level now - in fact I'm sure the governement admitted that quietly not long ago - so what the f*k are they playing at?
They're trying to tax at a higher and higher level, but fragment the taxation so no-one actually does the sums you've been doing here. If you get taxed in fifteen different ways, you don't notice the odd 3 or 4% here, the odd 3 or 4% there.
Things like:
removing the tax credit on pension fund dividends
insurance premium tax introduction
airport tax introduction
all snipping away at your (possibly already taxed) income, a few pounds at a time.
Same theory for revenue cameras, make it look like its either for safety, or even that if you don't speed, you dont get fined.
Voluntary taxes - national lottery. Taking 12% of your stake, which is already out of your taxed income.
And don't get me on to CGT...
There are also lots of completely unquantifiable taxes:
The national lottery funds a lot of things that might well have otherwise got public funding.
Self Assessment means that your time and not the IR's is taken up, and time = money.
Patchy state of the NHS drives people to go private, paying money for a publicly funded service.
Same for education.
Double tax if you employ a nanny/housekeeper etc - they pay tax on what you pay them, which is out of your already taxed income.
etc.
>> Edited by JohnL on Friday 24th May 13:56
The national lottery funds a lot of things that might well have otherwise got public funding.
Self Assessment means that your time and not the IR's is taken up, and time = money.
Patchy state of the NHS drives people to go private, paying money for a publicly funded service.
Same for education.
Double tax if you employ a nanny/housekeeper etc - they pay tax on what you pay them, which is out of your already taxed income.
etc.
>> Edited by JohnL on Friday 24th May 13:56
I'm not an economist (would I admit it if I was?) but the key figure is probably total taxation as a percentage of GDP. A quick internet trawl reveals that this is currently about 37.5% having risen from a low of 33% in 1993 - mainly under the Tories to be fair, it was about 36% when Tony arrived
It was also about 36% when Thatcher came to power and rose quickly to 39% then dropped to the 1993 low.
It was also about 36% when Thatcher came to power and rose quickly to 39% then dropped to the 1993 low.
quote:
I'm not an economist (would I admit it if I was?) but the key figure is probably total taxation as a percentage of GDP. A quick internet trawl reveals that this is currently about 37.5% having risen from a low of 33% in 1993 - mainly under the Tories to be fair, it was about 36% when Tony arrived
It was also about 36% when Thatcher came to power and rose quickly to 39% then dropped to the 1993 low.
My maths obviously suck then. Hey I'm just an engineer and I didn't even use a calculator for that lot
The main point here is Where The F**k Does It All Go???????
All this money and Britian has, in no paticular order; the worst rail network in europe, airtraffic control underinvestment/problems, shoddy roads (worse than our close neighbours) and a NHS system close to collapse under the weight of bureaucracy.
Hmm. Makes you wonder doesn't it. I'm sure I've said it somewhere before but I and a few friends at uni are deperate to be in a position where we can emigrate. (to anywhere!)
Sometimes you can't help wonder if Guy Fawkes didn't have the right idea after all....
Andy
PS. I'm not against the whole idea of taxation but its all this tax by stealth that pisses me off. I'd rather just see how much I'm giving the government in the first place.
All this money and Britian has, in no paticular order; the worst rail network in europe, airtraffic control underinvestment/problems, shoddy roads (worse than our close neighbours) and a NHS system close to collapse under the weight of bureaucracy.
Hmm. Makes you wonder doesn't it. I'm sure I've said it somewhere before but I and a few friends at uni are deperate to be in a position where we can emigrate. (to anywhere!)
Sometimes you can't help wonder if Guy Fawkes didn't have the right idea after all....
Andy
PS. I'm not against the whole idea of taxation but its all this tax by stealth that pisses me off. I'd rather just see how much I'm giving the government in the first place.
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