[Guz2]

I agree with a flat tax ideologically. I think 31% is a reasonable figure, like UKIP suggest. As it is, the 40% tax band is way too low and the 50% shouldn't even exist.

EDIT: I meant as in the threshold of the 40% band is way to low, not that it should be raised above that.

[morecambebay]

(Original post by Poppy-Fields)
I come from, what I think people class as a "poor", family. My aim is to go into Law, study at Merton College, Oxford and work at Lincoln's Inn.

So, yes, if you work hard you can get up the ladder. I'm proof of that.

But knowing half of what I earn will be taken from me... that does make me want to look at the offshore accounts... meaning the Government loses out altogether.

And what if after all your hard work, you fail to get a job because you dont have the contacts? What if the job you are aiming for is taken by somebody who did much worse than you but had a relative who knew the right people? Would you be happy to be taxed at the same rate as that person? Because it will happen you know. Nobody is going to give you the job you deserve, you are going to have to climb higher than everybody else to end up at the same place. You have to work for what they will be given.

[NeoNerd]

The definition of rich seems to be slightly warped here. Someone earning £40,000 pa while supporting a family is not rich. But they are a higher rate taxpayer. They pay 40% on the last £5000 of their income. That extra £1000 tax is a lot.

(Original post by morecambebay)
X

Despite what you might think, Law is not a giant old-boys network. To stay commercially viable, firms have to hire the best, not the relatives of partners. It might have been the case 50 years ago, but not now. Firms want to be profitable, and the partners want a good share of income. Hiring a dunce you know over a brilliant young lawyer is not conducive to that.

[cambio wechsel]

(Original post by Poppy-Fields)
£34,371-£150,000. If you are in that bracket you are taxed 40%.

No. What you earn in that bracket is taxed at 40%. What you earn below that bracket is taxed at 20%, the same as everyone else
.

[Net Casualty]

The counter-intuitive truth is that taking a higher percentage of a rich person's income does not mean they are 'taxed' more than a poor person at a lower percentage. The reason for this is that the increase or decrease of a person's income isn't in a linear relationship with the benefit, wellbeing or needs satisfied by that increase. If you take away 20% of a poor person's wage, you are disproportionately effecting their standard of living when compared to taking 20% of a rich person's: you are not simply decreasing both by 20% (if standard of living can be measured quantitively, which is a weird idea, but you get the point). This is for several reasons.
Firstly, there are fixed-costs to simply be alive which must be paid in order to simply survive. By taxing people at the same rate, you take a greater proportion of the disposable income of the poor than that of the rich.
Secondly, the rich are better able to maintain a high standard of living with lower incomes than they currently have than the poor. Reducing a person's fortune from £30m, to £15m would not necessarily result in a significant change in life style (one less yacht, boo hoo). However, reducing a person's income from £30,000 to £15,000 could destroy their standard of living, requiring huge changes in the way they live.
It's because of this that progressive taxation is not unfair towards the rich. They do not necessarily lose out more than the poorer members of society in terms of their welfare just because they're being taxed at a higher percentage of their income, and so it's not unfair to tax them at a higher percentage.

[RastaMannn]

I can't understand why these kind of questions are being asked. Its simples, yes, the wealthier people must pay extra tax. People don't need millions to live, why should someone live a life that they love and find no sympathy for those who live in squalor and pay extra taxes. Sickening! A friend from my school once had no hot water for 3 weeks because his folks couldn't a new boiler or even for it to be repaid. But a wealthier person has the money to buy 20 boilers!!!! I don't care what replies I'm going to get from this thread. So be it, slam on me for telling you all something that you don't want to hear because you have no compassion for the struggling and tell me that that is fair! Tell me why poorer people should suffer because tax is crippling their lives. Without the working class who often struggle, the wealthier subjects in society wouldn't have the lives that they have from many things such as food, sanitation and even the houses they live in! It's time to wake up and be for real and show compassion to those less fortunate. I might have spelt some stuff wrong in here because I typed this quickly to get my ideas down but you understand what I am saying.

[iSMark]

(Original post by Amwazicles)
I find it ridiculous that people always assume people MUST have 'worked harder' (whatever that even means), in order to be rich.

In a lot of cases this is true, but there are people who don't.

[Watch Key Phone]

(Original post by iSMark)
In a lot of cases this is true, but there are people who don't.

Exactly. So there is no point in making such an assumption.

[Poppy-Fields]

(Original post by RastaMannn)
People don't need millions to live, why should someone live a life that they love and find no sympathy for those who live in squalor and pay extra taxes.

So, no rich person gives to charity? No rich person has any sympathy. No rich person could ever have pulled themselves up from that life?

I believe that a rich person has no obligation to help a poor person. None whatsoever. If they choose to, then bravo them.

Also, the tax brackets I'm talking about (£34,371-£150,000) aren't exactly millions, are they?
If there was a flat rate tax then the "rich" would still be paying a higher amount of money, just at the same percentage rate as the "poor" people.

[DJKL]

(Original post by NeoNerd)
The definition of rich seems to be slightly warped here. Someone earning £40,000 pa while supporting a family is not rich. But they are a higher rate taxpayer. They pay 40% on the last £5000 of their income. That extra £1000 tax is a lot..

Not quite, you have missed the personal allowance.

The first £7,475 is tax free, next £35,000 is taxed at 20%, excess over £42,475 is taxed at 40%. Also remember NI at 11% on roughly the 20% band and 2% thereafter if the income is earned income (Schedule E)

[Hopple]

(Original post by Xyonzz)
i get where people are coming from in that taxing the poor the same amount as the rich would be harmful to the lower classes, but regardless i don't think the rich should have to pay more 'just because they can'

Two main things, I think. First is that a flat rate of tax digs more into the disposable income of poorer people. Say it costs £1000 per year to survive, taxing 10% (for example) on someone earning £2000 actually eats up 20% of their spending money, yet that same 10% on a £50k salary is about 10.2%. Even more extreme is if that 10% drops someone below the money they need to survive, then they either die or, more likely, turn to crime.

Secondly, whilst not many people would disagree with people getting to keep money they work hard for, with inheritances and connections (or cronyism, if you'd prefer) it's actually rather widespread that the rich stay rich not necessarily due to their hard work, and the poor can stay poor despite working hard. Varying tax rates helps address this, giving poorer people a chance to save for their future and pushing the rich to go to a some effort to maintain their wealth.

[morecambebay]

(Original post by NeoNerd)
The definition of rich seems to be slightly warped here. Someone earning £40,000 pa while supporting a family is not rich. But they are a higher rate taxpayer. They pay 40% on the last £5000 of their income. That extra £1000 tax is a lot.



Despite what you might think, Law is not a giant old-boys network. To stay commercially viable, firms have to hire the best, not the relatives of partners. It might have been the case 50 years ago, but not now. Firms want to be profitable, and the partners want a good share of income. Hiring a dunce you know over a brilliant young lawyer is not conducive to that.

Making profit includes the need to keep the customers coming. Some customers will want special treatment for their precious children. Those customers will be the biggest customers. Either in money that they spend themselves or in the power that they have due to their contacts.

"Daddy, daddy! That law firm that you give millions of pounds in business to wont give me a job".

"Ok son, lets find a place that will...dont worry, I'll talk to the owner on your behalf".

Who cares how bad a lawyer is if they are the link to extra profit?

[NeoNerd]

(Original post by DJKL)
Not quite, you have missed the personal allowance.

The first £7,475 is tax free, next £35,000 is taxed at 20%, excess over £42,475 is taxed at 40%. Also remember NI at 11% on roughly the 20% band and 2% thereafter if the income is earned income (Schedule E)

Quite right. The point's still valid, though. This is why I'm not becoming a tax lawyer...

[Skip_Snip]

If you were earning over £100k, would you even miss 40-50% ?!

[chefdave]

(Original post by Obfuscator)
I kinda feel there should be some progressive taxation.

'Progressive taxation' is an oxymoron, there's no progressive way to forcibly seperate people from their own money. The only way taxation can be considered moral if is Mr A is depriving Mr B of £x p/a and the state steps in to tax away Mr B ill gotten gains and hands it back to the rightful owner. But this deviates from what is traditionally considered progressive.

[NeoNerd]

(Original post by morecambebay)
Making profit includes the need to keep the customers coming. Some customers will want special treatment for their precious children. Those customers will be the biggest customers.

"Daddy, daddy! That law firm that you give millions of pounds in business to wont give me a job".

"Ok son, lets find a place that will...dont worry, I'll talk to the owner on your behalf".

It simply doesn't work like that. Otherwise, I'd have no chance of getting a job. It may do in other areas, I don't know, but the legal profession has almost entirely shed nepotism and jobs for friends.

Legal firms don't have an owner, as such. They tend to be partnerships, and It's hard to influence all of the partners in a firm.

Who cares how bad a lawyer is if they are the link to extra profit?

In any case, an incompetent lawyer can cost a firm millions, especially in commercial work. If a young lawyer forgets to register a security, say, it can lead to a vast claim against the firm. Firms will not hire incompetent people simply because they don't want the risk. This is doubly so in traditional partnerships, where partners are liable for all the debts of the firm.

[Historophilia]

(Original post by morecambebay)
Making profit includes the need to keep the customers coming. Some customers will want special treatment for their precious children. Those customers will be the biggest customers.

"Daddy, daddy! That law firm that you give millions of pounds in business to wont give me a job".

"Ok son, lets find a place that will...dont worry, I'll talk to the owner on your behalf".

Any evidence for this stereotype?

The fact is, contacts can help, they can get you a foot in the door and maybe give you a chance to prove yourself. But beyond that you are on your own, contacts can help but ultimately your success or failure will depend on your own abilities or hard work.

When have you ever met a top lawyer who was bad at their job? Or banker who was bad at figures? Or a CEO of a company who was stupid or incompetent?

Ever? No. Because to climb to the top you need to be worth it, no matter how many powerful people you Daddy knows, you won't do well in life if you're stupid or lazy or incompetent.

[goape]

(Original post by Historophilia)
Any evidence for this stereotype?

The fact is, contacts can help, they can get you a foot in the door and maybe give you a chance to prove yourself. But beyond that you are on your own, contacts can help but ultimately your success or failure will depend on your own abilities or hard work.

When have you ever met a top lawyer who was bad at their job? Or banker who was bad at figures? Or a CEO of a company who was stupid or incompetent?

Ever? No. Because to climb to the top you need to be worth it, no matter how many powerful people you Daddy knows, you won't do well in life if you're stupid or lazy or incompetent.

This I agree with exactly.

[Historophilia]

(Original post by Skip_Snip)
If you were earning over £100k, would you even miss 40-50% ?!

Yes you would, because that's 50% of the money you've worked for taken away.

And also, if you live in London, have a large mortgage, several kids and want to enjoy a high standard of living as reward for the long hours that you work then you would miss it.

[SMed]

(Original post by morecambebay)
It is very very hard to get rich without somebody elses help. People inherit, people bend laws, people manipulate politics, people use connections, people exploite staff, people take profit without taking risk, people get lucky. Any rich person who has never done any of those things is a rarity.

Plus, If you take half of a rich persons wage you are taking half a ferrari, if you take half of a poor persons wage you are taking half of their food budget. They are not the same.

No one is talking about half of anyone's wage. Something fairer would be, as mentioned earlier, 20% ish. If someone is truly very poor, then perhaps don't take (much) tax. But if they're earning £20k, then £4k seems reasonable and it would seem fair to the £50k and £100k earner that pay £10k and £20k respectively.

I suppose I can see politically why it's done this way. Low-earners will like this better, and there are disproportionately more low-earners so anyone proposing a standard rate tax would never be voted in.

But since there are so many lower-earners out there, if they paid more tax, we might actually end up with more money brought in overall. I don't know.

But as has been said, 50% of anything is just too much.