"real Time Taxation"

[Injin]

http://www.telegraph.co.uk/news/newstopics/politics/8095731/Child-benefit-reform-virtually-unenforceable-Tory-MP-warns.html

an Liddell-Grainger, chairman of the all-party parliamentary group on taxation, said the move to withdraw the benefit from couples where one earner pays higher rate tax would not be practical until HM Revenue and Customs was able to process real-time information.

Ministers had dismissed as ''nonsense'' reports that even the Treasury feared the proposal was unworkable because it relied on partners or spouses being forced to declare each other's earnings.

There were also reports that HMRC was working on a system of retrospectively ''fining'' higher rate taxpayers who failed to disclose their true child benefit situation by changing their tax code.

Mr Liddell-Grainger told BBC Radio 4's Today programme: ''One of the big difficulties the Government has got is that the system they have got is not a real-time system and therefore this is going to be virtually unenforceable. Until we go to real time taxation this is going to be a very difficult position.''

He added: ''I think it could be introduced as planned, the problem is it doesn't always mean it's going to work.

''Government has always had problems with IT projects and this is no different.''

He went on: ''If your circumstances change they will not be able to enact it in real time. The ramifications for getting it wrong are enormous for the taxpayers and the citizens of the UK.''

The MP said: ''Why is the citizen going to volunteer the information, because it's not going to be worth their while, there's no guarantee it can be enacted and people want their privacy respected.''

He recalled recent problems with the PAYE system, with millions of taxpayers wrongly taxed, and added: ''If we can't get PAYE right, we are not going to be able to do this.

''Until we have online tax filing and real-time taxation the system is going to creak and it may well fail and we go back to the problem that the citizen loses confidence in the state.''

A Treasury spokesman said: “Withdrawing child benefit from higher rate taxpayers will be done through existing systems and processes. The tax system already asks higher rate taxpayers for information about things like interest received on savings accounts, in order to ensure the right amount of tax is paid. This is just an additional piece of information HMRC will ask for and it will be the higher rate taxpayer’s responsibility to report it to HMRC."

The Government's welfare shake-up was also at the centre of a continuing row over plans to cap housing benefit, after London Mayor Boris Johnson vowed not to accept ''Kosovo-style social cleansing'' in the capital.

He later said his comments had been taken out of context, but they earned a rebuke from No 10 and senior Liberal democrats including Deputy Prime Minister Nick Clegg.

Tory MP for the Cities of London and Westminster Mark Field said today he supported the housing benefit cap and would not have used the phrase ''social cleansing''.

He told BBC Radio 4's Today programme that about 5,000 households in his constituency would potentially be hit by the benefit cap, but he also believed many of their rents would be lowered.

He added: ''I believe that the coalition are absolutely right to grasp the nettle on this and I support the cap.''

Mr Field, asked about the Mayor's comments, said: ''Social cleansing is not a phrase I would have used.''

He said the experience of genuine victims of ethnic cleansing ''can't really be compared with what's being proposed''

Lots in there about the child benefits and Boris' more crack smoking distraction efforts but I thought the real time taxation thing was worth pointing out.

What would it be like to live in a system whereby you could be taxed in real time. Parking fines..in real time. Orwellian isn't in it.....obviously they would like to go to real time theftation, but does this comment mean they have concrete plans to in the near future?

I think we should be told....

Edited October 29, 2010 by Injin

[Authoritarian]

Another reason why universalism is prefereble to means testing, it keeps the government out of your business as much as poss.

Just scrap the damn thing and give EVERYBODY a tax cut, that's fair, cheap and non-invasive.

[R K]

http://www.telegraph...y-MP-warns.html

Lots in there about the child benefits and Boris' more crack smoking distraction efforts but I thought the real time taxation thing was worth pointing out.

What would it be like to live in a system whereby you could be taxed in real time. Parking fines..in real time. Orwellian isn't in it.....obviously they would like to go to real time theftation, but does this comment mean they have concrete plans to in the near future?

I think we should be told....

Osborne has mentioned it as an aim before I think.

Ties in with the advanced plans to remove cheques by 2017 (and then cash).

I suppose VAT is calculated in real time at point of sale 'cause it's simple. So they'll need to have a v. simple tax system probably tying in with this universal credit.

Won't be long before the whole lot is done via an offshore processing centre in Bangalore.

Edit: the annual in arrears tax system does seem to be an anachronism. We communicate in real time now rather by letter or telegraph. I'd much prefer to retain 'cash' but the tax system appears to exist largely to give accountants and lawyers something to charge for.

Edited October 29, 2010 by Frank Sidebottom

[Timak]

I've posted about it a few times recently.

A cashless society with electronic transfers the only method of exchange.

A transaction tax of 0.5% (quarter of a percent on each transactor) is calculated to remove the need for all other taxation.

It could also be increased slightly to around 1% which would be enough to pay for a universal credit for all citizens.

Add in the social costs of removing the requirement for accounting and you have a pretty good system in the brave new world of surveilance Britain.

[Authoritarian]

I've posted about it a few times recently.

A cashless society with electronic transfers the only method of exchange.

A transaction tax of 0.5% (quarter of a percent on each transactor) is calculated to remove the need for all other taxation.

It could also be increased slightly to around 1% which would be enough to pay for a universal credit for all citizens.

Add in the social costs of removing the requirement for accounting and you have a pretty good system in the brave new world of surveilance Britain.

How does a 1% VAT remove all other taxation when it's currently levied at 17.5% on most stuff and is being raised to 20% next year?

Doesn't add up.

[leicestersq]

How does a 1% VAT remove all other taxation when it's currently levied at 17.5% on most stuff and is being raised to 20% next year?

Doesn't add up.

Tis a transaction tax, not a value added one. You get to pay, even if the transaction isnt one that has any associated value with it.

Of course such a tax is likely to inhibit such transactions massively. I would guess that we would still need other taxes too, including VAT, income tax.

And I think a local tax on property is a good idea. Not the council tax, but a property tax paid for by the owner of the property, not those living there. And make the tax highly progressive.

Of course this latter tax isnt going to be real time.

Interestingly, a real time tax system, could save the nation billions and billions. All those tax people, accountants and the like, would be redundant, as would most tax collectors. Your spending details would become more private, despite the fears of the paranoid. More private as in no human would be looking at what you are doing, unless there was a specific investigation into you, which would be rare regarding those transactions that were automatically taxed anyway.

How do you game such a system? Possible of course, you need to create you own transaction system that the taxman cant see. It would need to contain the payments between large numbers of people. A blackmarket money might do this, or a 'mums the word' payment system. My money, quite literally, would be on the former as the best option. Having a big alternative transactional computer system would make it difficult to keep secret from the taxman. Gold though, as a cash in the hand payments system, might not be secret either, but would be difficult to stop. If the cost of using the government's taxing payments system were less than using the 'alternative money', then perhaps we have a much fairer way of taxing our society in the offing.

[SarahBell]

Real time is what tax credits does.

If your income goes up you are supposed to tell them.

If it goes down you tell them.

They can adjust the money you get real time.

it doesn't really mean by the second as you breathe...

Just not waiting til the end of the tax year...

Put CB into tax credits and problem solved.

I do not understand why they have chosen not to do this.

[matroskin]

A transaction tax of 0.5% (quarter of a percent on each transactor) is calculated to remove the need for all other taxation.

It could also be increased slightly to around 1% which would be enough to pay for a universal credit for all citizens.

Would you be prepared to pay 0.5% every time you remortgage - because money are transferred from your account to pay off old mortgage?

Or when you transfer your pension pot to a better provider?

Or when you withdraw/top up your share dealing account?

Not going to work, rich people will be using offshore accounts and poor are better with cash-in-hand instead

[Timak]

Would you be prepared to pay 0.5% every time you remortgage - because money are transferred from your account to pay off old mortgage?

Or when you transfer your pension pot to a better provider?

Or when you withdraw/top up your share dealing account?

Not going to work, rich people will be using offshore accounts and poor are better with cash-in-hand instead

Yep it is 0.5% on every single transaction no exceptions.

The cost savings of having no accounting costs would be a massive advantage to business and would see them flocking here.

[Authoritarian]

Real time is what tax credits does.

If your income goes up you are supposed to tell them.

If it goes down you tell them.

They can adjust the money you get real time.

it doesn't really mean by the second as you breathe...

Just not waiting til the end of the tax year...

Put CB into tax credits and problem solved.

I do not understand why they have chosen not to do this.

Why do they have CB & child tax credits? I don't see the logic in this.

[matroskin]

Yep it is 0.5% on every single transaction no exceptions.

The cost savings of having no accounting costs would be a massive advantage to business and would see them flocking here.

"Business flocking here" is no jobs-for-all guarantee. Just check Ireland's last month' massive positive trade balance (+$55B, yes fifty five billion) and Irish unemployment situation.

[cabbagepatchkid]

Real time is what tax credits does.

................

................

Put CB into tax credits and problem solved.

I do not understand why they have chosen not to do this.

I agree with you. The only reason I can think of is that they plan to phase out tax credits altogether.

The fact that this government (and its army of highly paid civil servants) has managed to make such a complete and utter balls up of this situation really puts the fear of god into me. This was a decision they had plenty of time to deliberate over/consult people on etc etc, there was no huge pressure on them, and they still managed to screw it up. How can we possibly trust them with situations requiring an urgent response?

They are nincompoops totally disconnected from reality, devoid of both common sense and the ability to empathise with others. I bet this debacle ends up costing more than it saves

[Tiger Woods?]

How do you game such a system? Possible of course, you need to create you own transaction system that the taxman cant see. It would need to contain the payments between large numbers of people. A blackmarket money might do this, or a 'mums the word' payment system. My money, quite literally, would be on the former as the best option. Having a big alternative transactional computer system would make it difficult to keep secret from the taxman. Gold though, as a cash in the hand payments system, might not be secret either, but would be difficult to stop. If the cost of using the government's taxing payments system were less than using the 'alternative money', then perhaps we have a much fairer way of taxing our society in the offing.

All well and good until someone decides to steal your id, or you fall foul of some arbitrary government regulation and access to your funds is "restricted." Anyone who wants more centralised control of their lives is nuts. I'm happy to have inefficient systems...one of the best protections of what little freedom one has.

[Tiger Woods?]

Would you be prepared to pay 0.5% every time you remortgage - because money are transferred from your account to pay off old mortgage?

Or when you transfer your pension pot to a better provider?

Or when you withdraw/top up your share dealing account?

Not going to work, rich people will be using offshore accounts and poor are better with cash-in-hand instead

You pay more than that now for transferring money between many institutions/remortgaging etc.

[matroskin]

You pay more than that now for transferring money between many institutions/remortgaging etc.

True. But you have a choice now whether to deal with such institutions or not.

Whereas under uniform 0.5% tax there is no choice and only escape for a person with limited means is cash in hand. Or gold dare I say that

Actually, should PAYE tax withholding be subject to this 0.5% tax? If not then we'll have tax on tax

[SarahBell]

I agree with you. The only reason I can think of is that they plan to phase out tax credits altogether.

I did query what mention tax credits had got in the budget review thing and someone posted a few bits...

If they were ceasing WTC and CTC this year I could understand not messing with the cb into it - but seriously they need a slap and telling to means test it properly by sticking it in tax credits.

I bet though it's some civil servants delight to keep jobs in the tax department.

How can we email the treasury committee?

http://www.guardian.co.uk/society/2010/oct/29/chancellor-to-face-questions-child-benefit

[leicestersq]

All well and good until someone decides to steal your id, or you fall foul of some arbitrary government regulation and access to your funds is "restricted." Anyone who wants more centralised control of their lives is nuts. I'm happy to have inefficient systems...one of the best protections of what little freedom one has.

Yes, any system such as this relies on identification of the individual. You need a national id system that can do this linked the tax system.

[tallguy]

http://www.telegraph.co.uk/news/newstopics/politics/8095731/Child-benefit-reform-virtually-unenforceable-Tory-MP-warns.html

Lots in there about the child benefits and Boris' more crack smoking distraction efforts but I thought the real time taxation thing was worth pointing out.

What would it be like to live in a system whereby you could be taxed in real time. Parking fines..in real time. Orwellian isn't in it.....obviously they would like to go to real time theftation, but does this comment mean they have concrete plans to in the near future?

I think we should be told....

Just as soon as the technology allows for it injin...

It'll be interesting to see what kinds of black-market means of exchange start to rise up from the bottom if the state tries to tax in real time and what methods the state will employ to try and suppress them.

Edited October 30, 2010 by tallguy

[tallguy]

A "cashless" society is the obvious logical next step for the state and they will bring it in as soon as the technology allows for it.

At which point we become complete slaves.