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Poorest pay higher taxes than richest, new figures show

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The poorest 10 per cent of households in the UK pay a greater proportion of their income in tax than the richest 10 per cent, new analysis has revealed.

Officials statistics show the lowest tenth of earners pay an average of 42 per cent of their income in the form of income tax, national insurance, VAT and council tax.

In contrast, the richest 10 per cent see around a third (34.4 per cent) of their earnings go to the taxman, according to analysis by The Equality Trust.

Council tax and VAT were found to hit the poorest households particularly hard. Low earners pay an average of seven per cent of their income in council tax while the wealthiest households pay just 1.5 per cent.

A similar trend applies to VAT, on which the poor pay 12.5 per cent of their income while the rich pay five per cent.

Reports this week suggested Theresa May and Philip Hammond are planning to hike VAT by 2.5 per cent after the 8 June election, hitting poor families even harder. David Cameron’s coalition government raised VAT from 17.5 per cent to 20 per cent in 2011, despite the Tories previously having said they had “no plans” to increase it.

In analysis that paints a stark picture of inequality in Britain, The Equality Trust found that the richest 10 per cent of households have an average pre-tax income of £110,632 per year compared to just £19,992 for the poorest.

https://uk.finance.yahoo.com/news/poorest-pay-higher-taxes-richest-184641155.html

 

Only 42%, plenty of scope to increase that?

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1 hour ago, Democorruptcy said:

 

Only 42%, plenty of scope to increase that?

Council tax it the big one for low earners.I always have to laugh at our Labour council pushing up council tax to fund middle class jobs and pensions that push the low paid into poverty.

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5 minutes ago, durhamborn said:

Council tax it the big one for low earners.I always have to laugh at our Labour council pushing up council tax to fund middle class jobs and pensions that push the low paid into poverty.

I wondered how many hours I had to work so the council could stick a fairly pointless flag in the field near me. It upset me a bit, as I guessed it was probably a lot.

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7 minutes ago, durhamborn said:

Council tax it the big one for low earners.I always have to laugh at our Labour council pushing up council tax to fund middle class jobs and pensions that push the low paid into poverty.

This.

 

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1 hour ago, durhamborn said:

Council tax it the big one for low earners.I always have to laugh at our Labour council pushing up council tax to fund middle class jobs and pensions that push the low paid into poverty.

I always roll my eyes when people tell me young people should take to the streets, after all the poll tax riots were a roaring success. The poll tax happened anyway, they just renamed it council tax and went ahead with it. They knew perfectly well that council tax would take a fortnight's income from the poor (increased to a month's income under New Labour) while the rich wouldn't even notice it.

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No sh*t Sherlock

Most people in the UK simply swallow the propaganda line about UK taxes mainly hitting the rich 

What is never mentioned is that that this really only applies to Income Tax which as a Head of Duty only accounts for less than one third of all taxes levied in the UK. In 2015-16 the UK government raised £630 billion in all forms of tax and duty. Income Tax  accounted  for £169 billion of that amount. The remaining £461 billion came from other taxes and levies including NIC, VAT, Excise Duties, Insurance Tax, Stamp Duty, Council Tax etc. Many of these charges have no direct link to income and often only a passing connection to overall wealth. As a consequence it takes a bigger proportion of the money of lower paid earners

Even where there is a direct link between earnings and calculation of liabilities such as National Insurance the better off actually pay a lower rate overall than the average worker because once their earnings reach a certain threshold the rate at which they pay actually drops.

The figures are all in the OBR tables at the end of the Budget documents published by the Treasury for those who care to look.

https://www.gov.uk/government/publications/spring-budget-2017-documents

If the VAT rate is raised higher than basic rate of income tax as has been suggested might happen post the election then that imbalance is going to become even more stark.

Edited by stormymonday_2011

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I would like to think, post Brexit, Vat will be removed from gas, electric and women's things. At which point my vat payments will be very, very low and I would expect for the less well off will be close to zero. If not, you need to look at your expenditure.

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I thought VAT going up from 17.5% to 20% was a temporary measure to combat the 2008 crash? Now we're in a robust recovery (officially), why aren't they rolling back the VAT to 17.5%?

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1 hour ago, canbuywontbuy said:

I thought VAT going up from 17.5% to 20% was a temporary measure to combat the 2008 crash? Now we're in a robust recovery (officially), why aren't they rolling back the VAT to 17.5%?

Still got a ~6% budget deficit.

What recovery?

Well, recovery from Browns 12% deficit deficit I guess.

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10 hours ago, durhamborn said:

Council tax it the big one for low earners.I always have to laugh at our Labour council pushing up council tax to fund middle class jobs and pensions that push the low paid into poverty.

Amazing people havent grasped this. Govt gives a income tax cut and the local council claims it back.

For the poor council tax slowly eats into their income. Like a frog slowly being boiled.

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8 hours ago, stormymonday_2011 said:

No sh*t Sherlock

Most people in the UK simply swallow the propaganda line about UK taxes mainly hitting the rich 

What is never mentioned is that that this really only applies to Income Tax which as a Head of Duty only accounts for less than one third of all taxes levied in the UK. In 2015-16 the UK government raised £630 billion in all forms of tax and duty. Income Tax  accounted  for £169 billion of that amount. The remaining £461 billion came from other taxes and levies including NIC, VAT, Excise Duties, Insurance Tax, Stamp Duty, Council Tax etc. Many of these charges have no direct link to income and often only a passing connection to overall wealth. As a consequence it takes a bigger proportion of the money of lower paid earners

Even where there is a direct link between earnings and calculation of liabilities such as National Insurance the better off actually pay a lower rate overall than the average worker because once their earnings reach a certain threshold the rate at which they pay actually drops.

The figures are all in the OBR tables at the end of the Budget documents published by the Treasury for those who care to look.

https://www.gov.uk/government/publications/spring-budget-2017-documents

If the VAT rate is raised higher than basic rate of income tax as has been suggested might happen post the election then that imbalance is going to become even more stark.

Surely Council tax has a connection to wealth, if you rent and council tax goes down your landlord could try to get you to pay more council tax therefore only homeowners pay it - saying that there should be a revaluation.

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50 minutes ago, iamnumerate said:

Surely it is net tax that is important?  I would guess most of the poorest are negative payers of tax on net.

Agreed. The poorest are probably those just above the benefits limit or without kids.

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What a crock of shit.

Low earners get massive amounts of benefits to top them up.

High rate tax payers carry the rest of society on their shoulders.

Be in no doubt.

decile-income-post-tax-600x435.png

http://www.telegraph.co.uk/finance/personalfinance/tax/11233686/How-top-3000-earners-pay-more-tax-than-bottom-9-million.html

This bull shit really winds me up.

It's like saying it is harder for poor people to dine at nice restaurants because they can't afford it.

Well no shit!

You want the good life, you don't want to worry about money?

Study at school, work harder, get up off your ass and earn it.

Edited by GrizzlyDave

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The poor pay the most  tax as a proportion of their income Inc benefits, the largest part of benefit is paid to private rentiers, benefit most from benefits.......the very rich do not need to work, they choose to work if they work at all........not what you know or even how hard you work, It's who your mates and influential contacts are.......the poor have a purpose to help keep the rich in riches..... growing inequality starts with poor education when people are divided into their life paths......once moving very difficult to cross to the other side.;)

 

 

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2 hours ago, GrizzlyDave said:

You want the good life, you don't want to worry about money?

Study at school, work harder, get up off your ass and earn it.

if you want the good life and don't want to worry about money then marry into a family from the land and property owning classes - it has become about wealth now not income.  Do you really think working hard and studying pays in modern Britain...we do it for self realisation not money...the money simply gets handed over to the landed classes in rent.

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9 minutes ago, Wayward said:

if you want the good life and don't want to worry about money then marry into a family from the land and property owning classes - it has become about wealth now not income.  Do you really think working hard and studying pays in modern Britain...we do it for self realisation not money...the money simply gets handed over to the landed classes in rent.

Study more and work harder.

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2 hours ago, GrizzlyDave said:

What a crock of shit.

Low earners get massive amounts of benefits to top them up.

High rate tax payers carry the rest of society on their shoulders.

Be in no doubt.

decile-income-post-tax-600x435.png

http://www.telegraph.co.uk/finance/personalfinance/tax/11233686/How-top-3000-earners-pay-more-tax-than-bottom-9-million.html

GrizzlyDave - I never thought the day would come but you've finally posted something I agree 100% with 

 

The fact is that the vast majority of the burden for financing government spending in the UK is borne by middle to high income salaried workers. The *net contributors* are those on over about 30k, with the worst hit being single peoole without kids.

 

it is true that the very rich (top 1%) are generally able to arrange their affairs to minimise a lot of taxes and something absolutely should be done about that, but let's not pretend the country is being run on the backs of the poor. 

 

Surprised that Spyguy and Durhamborn were sympathetic to that message. They're normally the first to point out the distorting effects of certain benefits (HB, tax credits etc)

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9 minutes ago, GrizzlyDave said:

School is free.

Be an entrepreneur.

Go get it.

Ah school is free, presumably all of equal quality too. Odd that rich folks seem to think it worthwhile paying loads of cash for.

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4 minutes ago, EssKay said:

GrizzlyDave - I never thought the day would come but you've finally posted something I agree 100% with 

 

The fact is that the vast majority of the burden for financing government spending in the UK is borne by middle to high income salaried workers. The *net contributors* are those on over about 30k, with the worst hit being single peoole without kids.

 

it is true that the very rich (top 1%) are generally able to arrange their affairs to minimise a lot of taxes and something absolutely should be done about that, but let's not pretend the country is being run on the backs of the poor. 

 

Surprised that Spyguy and Durhamborn were sympathetic to that message. They're normally the first to point out the distorting effects of certain benefits (HB, tax credits etc)

?

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