Reforming UK Tax System

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Discussion

romeogolf

Original Poster:

2,056 posts

118 months

Friday 28th April 2017
quotequote all
If you were to "write the rule book" on UK tax, what would you want to see?

Without using political parties as justification or explanation, what changes do you think would be of most benefit and why?

Not just income tax, but VAT, corporation tax, inheritance, property taxes... Anything really. Just interested in getting some views on it and also to learn a thing or two about subjects I'm not entirely clear on through the discussion.

The question is prompted by a discussion with friends where despite similar incomes and thus paying similar levels of income tax, we had very different circumstances, and I almost felt that I (as a childless person on a reasonable income) should be paying a marginally higher rate than someone on a similar income but with a family.

PurpleMoonlight

22,362 posts

156 months

Friday 28th April 2017
quotequote all
romeogolf said:
The question is prompted by a discussion with friends where despite similar incomes and thus paying similar levels of income tax, we had very different circumstances, and I almost felt that I (as a childless person on a reasonable income) should be paying a marginally higher rate than someone on a similar income but with a family.
I disagree.

You breed 'em you pay for 'em.


As for changes, I don't see why PPR's should be CGT exempt.

Fittster

20,120 posts

212 months

Friday 28th April 2017
quotequote all
How about a land value tax?

"David Ricardo termed unearned income from land as a pernicious anomaly: “that portion of the produce of the earth which is paid to the landlord for the use of the original and indestructible powers of the soil”.

It is time the government seriously considers a land value tax (LVT). LVT is a periodic levy on the unimproved value of land only (that is, it disregards the value of buildings, personal property and investments on the land). The idea of LVT has been advocated by many economists throughout history (Adam Smith has said “nothing could be more reasonable”; Milton Friedman termed it “the least bad tax”; working papers from the IMF, the OECD and the IFS’s Mirrlees Review have also supported it at least in principle). The tax has attracted many proponents because it is as close as possible to an ideal tax – it is efficient (does not alter economic activity), equitable (the richer tend to have more land than the poor) and has revenue raising potential (the tax is difficult to avoid or evade). It also recognises land as a precious finite resource. More importantly, if implemented properly it can potentially seed economic growth, lead to greater productivity and even energise house building (as well as helping stabilise the cycle in land prices)."

https://iea.org.uk/blog/the-case-for-a-land-value-...

romeogolf

Original Poster:

2,056 posts

118 months

Friday 28th April 2017
quotequote all
PurpleMoonlight said:
I disagree.

You breed 'em you pay for 'em.


As for changes, I don't see why PPR's should be CGT exempt.
Forgive my ignorance, but what's a PPR?

PurpleMoonlight

22,362 posts

156 months

Friday 28th April 2017
quotequote all
romeogolf said:
Forgive my ignorance, but what's a PPR?
Principal private residence.

Fittster

20,120 posts

212 months

Friday 28th April 2017
quotequote all
PurpleMoonlight said:
romeogolf said:
The question is prompted by a discussion with friends where despite similar incomes and thus paying similar levels of income tax, we had very different circumstances, and I almost felt that I (as a childless person on a reasonable income) should be paying a marginally higher rate than someone on a similar income but with a family.
I disagree.

You breed 'em you pay for 'em.


.
When you are retired I'm assuming you don't want to receive any benefits / public services that are generate from the children once they have grown up and are paying tax.

PurpleMoonlight

22,362 posts

156 months

Friday 28th April 2017
quotequote all
Fittster said:
When you are retired I'm assuming you don't want to receive any benefits / public services that are generate from the children once they have grown up and are paying tax.
I have paid for that during my working life, and continue to do so as pensions are taxable.

Fittster

20,120 posts

212 months

Friday 28th April 2017
quotequote all
PurpleMoonlight said:
Fittster said:
When you are retired I'm assuming you don't want to receive any benefits / public services that are generate from the children once they have grown up and are paying tax.
I have paid for that during my working life, and continue to do so as pensions are taxable.
And you received no public services / benefits before your became an adult?

sidicks

25,218 posts

220 months

Friday 28th April 2017
quotequote all
Fittster said:
When you are retired I'm assuming you don't want to receive any benefits / public services that are generate from the children once they have grown up and are paying tax.
Until we have a major population crisis, then we don't need to encourage people to beeed!

sidicks

25,218 posts

220 months

Friday 28th April 2017
quotequote all
Fittster said:
And you received no public services / benefits before your became an adult?
Paid for by taxation

PurpleMoonlight

22,362 posts

156 months

Friday 28th April 2017
quotequote all
Fittster said:
And you received no public services / benefits before your became an adult?
What's that got to do with future changes?

sidicks

25,218 posts

220 months

Friday 28th April 2017
quotequote all
romeogolf said:
If you were to "write the rule book" on UK tax, what would you want to see?

Without using political parties as justification or explanation, what changes do you think would be of most benefit and why?

Not just income tax, but VAT, corporation tax, inheritance, property taxes... Anything really. Just interested in getting some views on it and also to learn a thing or two about subjects I'm not entirely clear on through the discussion.

The question is prompted by a discussion with friends where despite similar incomes and thus paying similar levels of income tax, we had very different circumstances, and I almost felt that I (as a childless person on a reasonable income) should be paying a marginally higher rate than someone on a similar income but with a family.
I think two things are important:
1) simplicity (as far as possible)
2) consistency (people with the same income, from whatever source, pay similar amounts of tax



Justayellowbadge

37,057 posts

241 months

Friday 28th April 2017
quotequote all
PurpleMoonlight said:
As for changes, I don't see why PPR's should be CGT exempt.
There's a tiny, outside chance that it may have a slightly adverse impact on anyone moving house.

romeogolf

Original Poster:

2,056 posts

118 months

Friday 28th April 2017
quotequote all
sidicks said:
Fittster said:
When you are retired I'm assuming you don't want to receive any benefits / public services that are generate from the children once they have grown up and are paying tax.
Until we have a major population crisis, then we don't need to encourage people to beeed!
We already have an ageing population due to a boom in births after the second world war. We definitely need to keep the birth rate reasonable to maintain an even distribution and keep an active workforce. If moves are made generally to strong decrease immigration, then this void will need to be filled elsewhere without over-compensating. At the same time, if we 'under perform' and too few people have children, the population will just continue to age and the elderly will be unsupported.

PurpleMoonlight

22,362 posts

156 months

Friday 28th April 2017
quotequote all
Justayellowbadge said:
There's a tiny, outside chance that it may have a slightly adverse impact on anyone moving house.
Financially yes of course, they pay tax on their profit.

Doesn't stop them moving though.

Edited by PurpleMoonlight on Friday 28th April 10:24

sidicks

25,218 posts

220 months

Friday 28th April 2017
quotequote all
PurpleMoonlight said:
Why?
Increased cost of moving reducing social mobility?

sidicks

25,218 posts

220 months

Friday 28th April 2017
quotequote all
romeogolf said:
We already have an ageing population due to a boom in births after the second world war. We definitely need to keep the birth rate reasonable to maintain an even distribution and keep an active workforce. If moves are made generally to strong decrease immigration, then this void will need to be filled elsewhere without over-compensating. At the same time, if we 'under perform' and too few people have children, the population will just continue to age and the elderly will be unsupported.
'Keep the birth rate reasonable' is the key point - most couples already choose to have a family for the benefits they bring (despite the costs), they don't need or require financial inducements to do so.

If that changes then the policy would need to change.

Justayellowbadge

37,057 posts

241 months

Friday 28th April 2017
quotequote all
PurpleMoonlight said:
Justayellowbadge said:
There's a tiny, outside chance that it may have a slightly adverse impact on anyone moving house.
Why?
You live in a 250k house.

You get offered a job elsewhere in the country.

You want to move to another 250k house in that new location.

When you sell your house you have to give the revenue 30k.

You can now only afford a 220k house.

You don't take the job.




PurpleMoonlight

22,362 posts

156 months

Friday 28th April 2017
quotequote all
sidicks said:
Increased cost of moving reducing social mobility?
Doesn't the huge difference in housing cost across the country already do that?

PurpleMoonlight

22,362 posts

156 months

Friday 28th April 2017
quotequote all
Justayellowbadge said:
You live in a 250k house.

You get offered a job elsewhere in the country.

You want to move to another 250k house in that new location.

When you sell your house you have to give the revenue 30k.

You can now only afford a 220k house.

You don't take the job.
So buy a £220,000 house or increase your mortgage by £30,000.

It might help reduce the cost of housing.