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At What Level Would Income Tax Have To Rise To


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HOLA441
I can't find the references but I recall reading a study that claimed that a 50% marginal tax rate is enough to persuade the high income earners to consider emigration leaving a pool of lower income earners having to pay more in taxes or face a cut in benefits.

The higher tax rates go, the more likely it becomes that the state will collpase under its own weight.

That makes complete sense, no study needed.

Penalising people for the act of working just incentivises them to either reduce their workload or direct resources towards hiding their productivity from the state. Its completely counter productive.

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HOLA442
Are you familiar with the following terms?

Cash in hand

Black economy

Exactly

But the government are preparing with very strong tactics

The new HMRC powers brought in by the 2008 finance act gives the HMRC much more extensive powers than the police or other government dept.s (with maybe the exception of the family court?)

They can enter your home or business demanding entry at any time without notice.

If you have paid someone to do a job for you where you have knowingly not paid the appropriate VAT or other tax for this service you will be punished with the possibility of a jail sentence.

They advise that any work you have have done on your home all invoices are kept for at least 5 years and that you make payment by traceable means. If you pay large amounts in cash this is looked apon as evidence of non compliance and you will be in trouble.

"Payment in kind" must also be disclosed in all transactions.

So if you get something done "for cash" make sure nobody finds out.

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HOLA443
A brief history of income tax levels since 74:

Omitting the part called "National Insurance", which is now more than half the tax paid by most people on earned income.

I thought the 1970s situation was fairer in one regard: unearned income being taxed more than what you earn. Now we have the opposite: reward the rich but penalise the hard-working.

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HOLA444
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HOLA445
I can't find the references but I recall reading a study that claimed that a 50% marginal tax rate is enough to persuade the high income earners to consider emigration leaving a pool of lower income earners having to pay more in taxes or face a cut in benefits.

The higher tax rates go, the more likely it becomes that the state will collpase under its own weight.

The top rate is already 55%, up from 54% last year. Rising to a 75% band next year, though far fewer will suffer that.

The 55% was sufficient to drive me to tax-saving measures.

[edit to say] I meant to say, the 54%.

Edited by porca misèria
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HOLA446
I thought I merely posed a question.

Your question implied that people should not reduce their tax burden because they would simply put extra burden on others. A mind set that is either totally disconnected from reality or you are on the receiving end of taxes. Tax is not paid to help the poor anymore it is paid to further enrich the rich. Your implication that that is a good thing is a contortion of ethics.

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HOLA447
Nope, because he then packs it in as well.

Laffer curve - the state should have shrank decades ago, but they borrowed and inflated to keep going passed their natural tax limit. Now that's over......bankrupcy inevitable.

This reminds me of Atlas Shrugged, by Ayn Rand. The US government in there that cripples the Country by taking from each according to his ability, and giving to each according to his need, results in all the successful/wealthy/intelligent people refusing to work and leaving the country. This means that all the whiney government officials/workers that were screaming "don't I deserve the same as you" (even though I sit on my **** and do nothing) and "it's in the interests of the people that we use your steel/trains/intellect" for the common good (i.e I have nothing so i'm going to screw you for all you have), ended up starving to death and having to cope with public riots due to lack of food and/or infrastructure.

It reminds me of Labour so much.

EDIT: Just wanted to say that it was a bit false and idealistic in that all the these wealthy people were industrialist types that worked hard and built fortunes from nothing, not people like Lords/bankers etc. They were all people that produced something and worked hard, so you admired them rather than loathed them.

Edited by Fedup
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HOLA448
Your question implied that people should not reduce their tax burden because they would simply put extra burden on others. A mind set that is either totally disconnected from reality or you are on the receiving end of taxes. Tax is not paid to help the poor anymore it is paid to further enrich the rich. Your implication that that is a good thing is a contortion of ethics.

It was suggested that people should avoid tax by participating in a black market. I simply asked if the poster was happy to shift some burden onto others who would not participate and continue to pay tax. People need to focus on the real cause of our problems - Government.

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HOLA449
It was suggested that people should avoid tax by participating in a black market. I simply asked if the poster was happy to shift some burden onto others who would not participate and continue to pay tax. People need to focus on the real cause of our problems - Government.

Its not so much government itself but the way its funded that causes the problems. Once they can pinch people's personal wealth and allow themselves the power to raise taxation to levels that they see fit theft it institutionalised in the democratic process.

I think most people would want some sort of government, the only questions are how much and how we decide to pay for it.

Edited by chefdave
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HOLA4410
It was suggested that people should avoid tax by participating in a black market. I simply asked if the poster was happy to shift some burden onto others who would not participate and continue to pay tax. People need to focus on the real cause of our problems - Government.

You have simply repeated yourself. How he avoids tax is totally irrelevant. You are still implying that paying tax is a duty and deciding not to is a sin. Your attempt at loading guilt by suggesting that others will have to pay more is just plumb crazy. They have options too. Society operates by each person maximising their own position without hurting others but you have contorted this by suggesting that when one person decides to get out then he is hurting others who decide to stay in. How about we switch it around and decide that those who stay in are hurting those who want to get out? Where now lies the guilt? Obviously guilt is just an an instrument of control. Nice when you are in control but hardly ethical.

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HOLA4411
Guest DissipatedYouthIsValuable
So would you like more income tax or less?

Less, which is why I'm going to play the non-domiciled emigre for a bit.

Paying about 2/3 the income tax of some **** like Phillip Green has pissed me off, and now I realise the whole financial system is just a game.

And so, I'm going to game it.

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HOLA4412
You have simply repeated yourself. How he avoids tax is totally irrelevant. You are still implying that paying tax is a duty and deciding not to is a sin. Your attempt at loading guilt by suggesting that others will have to pay more is just plumb crazy. They have options too. Society operates by each person maximising their own position without hurting others but you have contorted this by suggesting that when one person decides to get out then he is hurting others who decide to stay in. How about we switch it around and decide that those who stay in are hurting those who want to get out? Where now lies the guilt? Obviously guilt is just an an instrument of control. Nice when you are in control but hardly ethical.

Good reply/argument

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HOLA4413
It was suggested that people should avoid tax by participating in a black market. I simply asked if the poster was happy to shift some burden onto others who would not participate and continue to pay tax. People need to focus on the real cause of our problems - Government.

No, you completely misunderstood me. I didnt make a suggestion, I made a statement of fact. However, it wasnt an ideological statement of what people should do, rather a statement of what many people will do!

If the man in the street felt this guilt you fantasise about, why do so many unemployed defiantly state that it isnt worthwhile signing off for a low paid job?

In your world, do you believe these people gladly undertake training to acquire new skills and make themselves more attractive to an employer - and thus pay their own share of the nations debt and better still negating the need for and shame of burdening someone else?

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HOLA4414
No, you completely misunderstood me. I didnt make a suggestion, I made a statement of fact. However, it wasnt an ideological statement of what people should do, rather a statement of what many people will do!

If the man in the street felt this guilt you fantasise about, why do so many unemployed defiantly state that it isnt worthwhile signing off for a low paid job?

In your world, do you believe these people gladly undertake training to acquire new skills and make themselves more attractive to an employer - and thus pay their own share of the nations debt and better still negating the need for and shame of burdening someone else?

You do realize he is playing devils advocate?

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HOLA4415
A brief history of income tax levels since 74:

http://en.wikipedia.org/wiki/Taxation_in_the_United_Kingdom

I feel no obligation to pay down my country's debts so personally I would be unhappy with any increase in the tax rates charged on income. As much as I would like to see the UK with very low debt levels I wouldn't happily sacrifice any more personal income to achieve this end, but whether I'm forced to or not is an entirely different matter of course.

Once again I'm blindly putting my faith on this matter into the hands of economics (so far that hasn't worked out too well, re gilts market/gov't borrowng and interest rates). If income tax was raised to pay off our massive national debt then many more would find it increasingly difficult to make ands meet which should make a political and economic impossibility. However it could ultimately boil down to public opinion. If the general public could be convinced that it was in their benefit to take on their share of the pain to ensure the country's future economic wellbeing then it would dampen down any opposition and make the process politically manageable.

Any thoughts on this issue?

I am out of touch with the tax code in the UK. Here in the US any charitable contributions are tax deductable. Just a thought-at least your money goes to something you believe in.

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HOLA4416
Less, which is why I'm going to play the non-domiciled emigre for a bit.

Paying about 2/3 the income tax of some **** like Phillip Green has pissed me off, and now I realise the whole financial system is just a game.

And so, I'm going to game it.

Nail on head. The amount of super-rich who pay little or nothing is scandalous. There's also that tory peer, Lord Ashcroft ? , who has live in the UK most of his life in a stately home but for tax purposes claims to be non-dom. Also, what about companies based here that pay little or zilch in corp tax.

Until the govt of the day tackles this issue, many who are being asked to pay increasing taxes are not going to take it lying down.

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HOLA4417
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HOLA4418

I look at things in terms of life energy. So say I'm having a good year and staying in a decent hotel costs 3 hours labour of mine after income taxes.. I might be tempted to spend my money on that. If it costs 30 hours of labour of mine after taxes I am not going to stay at the hotel. So I never travel.

What I am finding is as they increase the taxes on petrol, parking fees, rents on land, and so forth I just do less that involves spending money. My favorite hobbies are walking in public trails in the woods, debating economics on here, playing roleplaying games with friends.

Its not even the black market economy for me, its simply not even buying the things. If it costs so much relative to what I keep after taxes to replace my kitchen, then I do not do that.

Edited by aa3
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HOLA4419

The top rate is now at that point**.

I have recently decided to resign from my position at work and dabble with a start-up company which is closer to home (my commute is currently 1.5 hours in the morning and 2ish in the evening) and will eventually be less work. If it works I am likely to make less than half the money.

I always hated London and what I do but Labour has now made it that it is no longer financially worth enduring. So at best, UK Plc has lost all my income tax for at least one year and probably 2/3rd-3/4rs of tax take on an ongoing basis. At worst, no income tax for 3 years while I try to get this thing going and then much much less tax as I persue jobs with less stress and hours (with the payoff being much less money/tax paid). The decision for me was made easier because we are lucky enough to have a fairly hefty savings pot and my wife is a reasonably well paid GP. We also have a baby on the way which means I didnt want to leave home at 6am and return at 9 or 10pm anymore.

In terms of tax lost from me, my current tax bill is a multiple of the average household income.

Edit: ** I mean it will in April when the new band is introduced.

Edited by SpiceWorld!
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HOLA4420
I am out of touch with the tax code in the UK. Here in the US any charitable contributions are tax deductable. Just a thought-at least your money goes to something you believe in.

That's one of three things I used last year to reduce my contribution to Very Bad causes: http://bahumbug.wordpress.com/2009/04/05/

I seem to have received a bonus in my August paycheque, so that's already budgeted for further charitable contributions this tax year.

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HOLA4421
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HOLA4422
No, you completely misunderstood me. I didnt make a suggestion, I made a statement of fact. However, it wasnt an ideological statement of what people should do, rather a statement of what many people will do!

If the man in the street felt this guilt you fantasise about, why do so many unemployed defiantly state that it isnt worthwhile signing off for a low paid job?

In your world, do you believe these people gladly undertake training to acquire new skills and make themselves more attractive to an employer - and thus pay their own share of the nations debt and better still negating the need for and shame of burdening someone else?

I've re-read what I said and I can't find any part of it which implied that you should feel guilt. I would much rather do away with the welfare state altogether. Sink or swim, you're on your own. Real freedom. Trouble is most people don't really want freedom. They want a nanny state regardless of what they say. They left the arms of Mummy & Daddy straight into the arms of the state.

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HOLA4423
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HOLA4424
You have simply repeated yourself. How he avoids tax is totally irrelevant. You are still implying that paying tax is a duty and deciding not to is a sin. Your attempt at loading guilt by suggesting that others will have to pay more is just plumb crazy. They have options too. Society operates by each person maximising their own position without hurting others but you have contorted this by suggesting that when one person decides to get out then he is hurting others who decide to stay in. How about we switch it around and decide that those who stay in are hurting those who want to get out? Where now lies the guilt? Obviously guilt is just an an instrument of control. Nice when you are in control but hardly ethical.

Fine exchanges, but say we accept that whatever we do about greedy banks getting bailed out or not in the future, we are where we are NOW in terms of colossal Government debt. If it isn't paid off, or at least serviced, we - that's all of us - are bust, with no credible economic future as a country short of accepting the Injin alternative. So the question is, if you accept it must be paid one way or another, it's higher taxes for all of us, or how would you prefentially target the people who you presumably think should pay for the damage they wreaked.

I didn't borrow recklessly either - but neither do I want to live in a failed state...

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HOLA4425
I can't find the references but I recall reading a study that claimed that a 50% marginal tax rate is enough to persuade the high income earners to consider emigration leaving a pool of lower income earners having to pay more in taxes or face a cut in benefits.

...already done it. Im not giving any more of my earning to benefit scroungers in the UK.

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