Discussion
Interesting to see that a senior Tory is proposing a new Poll Tax.
Because the last time the Tories tried to introduce the a Poll Tax for Local Government it was so popular with people.
Now in their wisdom they tink a Poll tax is a good idea again.
http://news.bbc.co.uk/1/hi/uk_politics/4220838.stm
Because the last time the Tories tried to introduce the a Poll Tax for Local Government it was so popular with people.
Now in their wisdom they tink a Poll tax is a good idea again.
http://news.bbc.co.uk/1/hi/uk_politics/4220838.stm
Can't be done anyway.
The complete redrawing of the UK tax system would take years and the eventual change from the current sysem would be far too sudden.
As we speak, a "tax law rewrite" is being undertaken. This project does not attempt to change the legislation, just to put it into simpler English. So far, after over 8 years, only about three rather obscure sections of tax have been re-written. At this rate, it will take about 200 years to "re-write" all of it.
Back in 1979, the Conservatives were elected partly on a "tax simplification" manifesto. I can tell you that, by the time they left office in 1997, tax legislation overall was FAR more complex than it had been 18 years earlier.
The complete redrawing of the UK tax system would take years and the eventual change from the current sysem would be far too sudden.
As we speak, a "tax law rewrite" is being undertaken. This project does not attempt to change the legislation, just to put it into simpler English. So far, after over 8 years, only about three rather obscure sections of tax have been re-written. At this rate, it will take about 200 years to "re-write" all of it.
Back in 1979, the Conservatives were elected partly on a "tax simplification" manifesto. I can tell you that, by the time they left office in 1997, tax legislation overall was FAR more complex than it had been 18 years earlier.
Eric Mc said:
Back in 1979, the Conservatives were elected partly on a "tax simplification" manifesto. I can tell you that, by the time they left office in 1997, tax legislation overall was FAR more complex than it had been 18 years earlier.
We were already heading toward something like a flat tax under the Tories.
The number of bands were reduced, certain allowances were either abolished (such as Miras) or scaled back (married couples allowance)
Well this is an interesting one.
Current system
0 tax under 4 k or so, 20 odd percent up to 35kish then 40% on the rest.
All seems strightforward - but it is complex especially when you bring in tx credits.
Tories are proposing a flat % rate of tax on everything over say 12k.
Looking at various analysis of this in oder to raise the same capital as we do under current system through a flat rate tax you'd need to set the rate at 37.5% on everything over 12k.
That leaves all middle income earners SUBSTANTIALLY worse off. The v poor gain a little, and the v rich gain massively.
The only way this could work would be setting the tax rate at around 22.5% - which would be great for just about everybody - except the government then is left with a 50 billion pound hole to fill...
Radical idea - yes. Practical proposition - errr doesn't look like it - especially when you factor in the cost of changeover to a new system.
Current system
0 tax under 4 k or so, 20 odd percent up to 35kish then 40% on the rest.
All seems strightforward - but it is complex especially when you bring in tx credits.
Tories are proposing a flat % rate of tax on everything over say 12k.
Looking at various analysis of this in oder to raise the same capital as we do under current system through a flat rate tax you'd need to set the rate at 37.5% on everything over 12k.
That leaves all middle income earners SUBSTANTIALLY worse off. The v poor gain a little, and the v rich gain massively.
The only way this could work would be setting the tax rate at around 22.5% - which would be great for just about everybody - except the government then is left with a 50 billion pound hole to fill...
Radical idea - yes. Practical proposition - errr doesn't look like it - especially when you factor in the cost of changeover to a new system.
Alex said:
I am certain that the Tories abolished MIRAS
The Tories reduced it to 15%, and then Gordon reduced it to 10% in his first budget and later abolished it completely.
Well I stand corrected if that is the case, it must be the reduction I heard about (it was in the context of an article on the housing market).
Alex said:
Under a flat-tax, revenue is likely to increase due to the simplification and lack of loopholes. The average rate in countries that have already introduced a flat-tax is 16%.
Those countries typically have smaller public sectors and in many cases higher social security contributions.
The impression I get is that (if done correctly) the flat rate is more thoroughly applied - ie. a lot of high earners who currently do not pay income tax on a significant part of their earnings would be brought into the net. The new system would, in addition to simplifying calculations, apply the tax as a blanket measure rather than allowing the wide range of loopholes currently enjoyed by those who can employ accountants.
So - the theory is that we're looking at a rate in the 20's, not 37.5% (I wonder if that magically accurate and scary figure was suggested by a Labour supporter?), and everything is balanced so that the majority of people see relatively little change.
It'd be interesting to get rid of some of the stealth tax nonsense that has crept in. In the medium term, employment at the IR would be ensured, as the change over period would be at least a couple of government terms in length, long enough for the subsequent job losses to be some other politician's problems.
This is an idea that's worth thinking over - and at least shows the Tories trying to take a genuinelt different approach to government than the current lot.
So - the theory is that we're looking at a rate in the 20's, not 37.5% (I wonder if that magically accurate and scary figure was suggested by a Labour supporter?), and everything is balanced so that the majority of people see relatively little change.
It'd be interesting to get rid of some of the stealth tax nonsense that has crept in. In the medium term, employment at the IR would be ensured, as the change over period would be at least a couple of government terms in length, long enough for the subsequent job losses to be some other politician's problems.
This is an idea that's worth thinking over - and at least shows the Tories trying to take a genuinelt different approach to government than the current lot.
mr_tony said:
Well this is an interesting one.
Current system
0 tax under 4 k or so, 20 odd percent up to 35kish then 40% on the rest.
All seems strightforward - but it is complex especially when you bring in tx credits.
Tories are proposing a flat % rate of tax on everything over say 12k.
Looking at various analysis of this in oder to raise the same capital as we do under current system through a flat rate tax you'd need to set the rate at 37.5% on everything over 12k.
That leaves all middle income earners SUBSTANTIALLY worse off. The v poor gain a little, and the v rich gain massively.
The only way this could work would be setting the tax rate at around 22.5% - which would be great for just about everybody - except the government then is left with a 50 billion pound hole to fill...
Radical idea - yes. Practical proposition - errr doesn't look like it - especially when you factor in the cost of changeover to a new system.
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