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    (Original post by Anony mouse)
    ...
    Could I suggest that it would be better to implement a system where X (the figure you decide on) is tax free unless you earn over X (wage). Why should the rich get a tax break? It's also a needless waste of money generation.

    What are your thoughts on this?
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    (Original post by Cardozo)
    Could I suggest that it would be better to implement a system where X (the figure you decide on) is tax free unless you earn over X (wage). Why should the rich get a tax break? It's also a needless waste of money generation.

    What are your thoughts on this?
    Because it means that when you earn X, and you are presented with an opportunity for a raise to X + n, you'll end up losing money -- if the tax rate above X is 20%, someone earning X and recieving a raise of 1 pound would actually be earning 0.2 * X less per year.

    The amount of tax you pay on the raise is what economists call the "marginal rate of taxation".
    (Original post by Afcwimbledon2)
    I said nothing of the sort.
    Yes you did. One of the reasons for our deficit is the enormous sums we spent bailing out the banks. You commented that stopping taxing society's poorest would "KILL our deficit", what else could you have meant?
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    (Original post by Cardozo)
    Could I suggest that it would be better to implement a system where X (the figure you decide on) is tax free unless you earn over X (wage). Why should the rich get a tax break? It's also a needless waste of money generation.

    What are your thoughts on this?
    I think it's a worthwhile point to consider.

    However, the method in which you have addressed it would be costly to enforce as well as being mathematically flawed, hence why it has not been implemented in real life. The reason for this is purely based on the arithmetic of percentages.

    For example, someone who earned slightly less than X amount of wage could take a higher income than someone who earned slightly over X amount of wage. In order to overcome this problem you would need to create a progressive tax free allowance system, which would be too costly to manage.

    However, I'd welcome a debate on implementing a small but proportionate tax increase in other areas. But your comment that this is a "needless waste of money generation" is a slightly moot point. I understand it that you believe it is the Government's duty to stimulate the economy. Whereas, we believe that the individuals could stimulate the economy more efficiently.

    :o:
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    (Original post by sconzey)
    We're starting small, and making sure that someone who is in actual poverty doesn't pay tax is a moral issue, whatever the cuts are that we must make to pay for this, it needs to be done.

    What a tax allowance like that will do is make little difference to the poorest.
    Make a lot more difference to those who are better off though.

    Don't forget, the poorest will include those who don't earn much so don't pay much tax.
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    (Original post by sconzey)
    The Libertarian Party would suggest cutting ministers salaries or expenses. The exact amount that we'd be required to save is currently being worked out, but if spread across all departments we doubt will amount to a massive amount. Certainly not "vicious cuts to front-line services"

    Right, so the government racks up a massive deficit bailing out rich bankers who were too greedy, and you propose to pay for it by taxing the poorest in society? Isn't that the very definition of privatising the profit and socialising the costs?
    It looks like the poor will be taxed to pay for it. They also benefit from the bailout.
    They won't however be taxed more than others, just taxed in general.
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    (Original post by Bagration)
    On the other hand, it appears, at least to me, to be somewhat unjust that a MD pays the same % of his income to tax as, say, a binman.

    Why is that unfair?
    Both work, both earn money.

    You'll find in a lot of companies that the binman earns more than the MD. Minimum wage doesn't apply to directors, who can be the lowest paid in a company when its struggling or just starting out.
    You want staff, you have to pay commercial rates for them. The MD can work for free if necessary, can't get employed staff for free.
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    (Original post by mart2306)
    What a tax allowance like that will do is make little difference to the poorest.
    Make a lot more difference to those who are better off though.

    Don't forget, the poorest will include those who don't earn much so don't pay much tax.
    You may have underestimated the value of tax breaks for the poorest section of society. I also disagree with your first two statements. In actual fact, if you were to analyse the figures more closely, you would see that the lowest income earners would see a far larger proportionate decrease in their income tax than the higher earners by way of proportion of income.
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    (Original post by CyclopsRock)
    My very rough figures suggest something in the region of £25bn, but I could be way off. It's based on the assumption that the tax free income rising to 12k means that there's an "extra" 6k that's now not being taxed. The first 2k of that would have been @ 10%, the next 4k @ 22% = £880 a person loss. There are approx 29m taxpayers in the UK atm, so 880x29m = £25bn. Though I think I've forgotten that fact that the 10% rate will now come after the £12k, so actually it'll be a slightly greater loss than that. Maybe £30bn. Approx 5% of our tax revenue.

    Simpler just to carry on with the VAT reduction to 15% that we have now. That would benefit everyone rather than just those who earn enough to pay tax.
    Come to think of it, many students won't be liable for tax now so a change in tax allowance wouldn't benefit them at all.
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    (Original post by Anony mouse)
    You may have underestimated the value of tax breaks for the poorest section of society. I also disagree with your first two statements. In actual fact, if you were to analyse the figures more closely, you would see that the lowest income earners would see a far larger proportionate decrease in their income tax than the higher earners by way of proportion of income.

    Lower proportionate decrease in their income tax?

    How about the actual figure they would be better off by? How much would that be for say a shop assistant working 16 hours a week at £5.80 an hour (minimum wage for us older people)?


    While an increase in tax allowance would benefit full time workers and some part timers, wouldn't benefit others at all.
    Someone working 20 hours a week while kids are at school may not get a penny from an increase in allowance.
    How many part timers earn below current tax threshold a year and therefore wouldn't benefit from an increase? Those are your poorest.
    Oh look, includes many students in that too.....
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    (Original post by Anony mouse)
    But your comment that this is a "needless waste of money generation" is a slightly moot point. I understand it that you believe it is the Government's duty to stimulate the economy. Whereas, we believe that the individuals could stimulate the economy more efficiently.
    I just believe we have a huge debt that needs to be paid back to the far east... We need to be realistic whilst in such terrible circumstances.

    I know there is a big issue with the way I described it but I'm just trying to get my point, that you are giving the rich a tax cut, out there.

    I think it is irresponsible to increase the untaxed allowance without ammending the tax bandings at the same time, it makes it, for want of a better word, inconsistent in my view.
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    (Original post by mart2306)
    What a tax allowance like that will do is make little difference to the poorest.
    Make a lot more difference to those who are better off though.

    Don't forget, the poorest will include those who don't earn much so don't pay much tax.
    Well yes, that's precisely the point. In this country we have a mandatory minimum wage -- a wage which the force of law forbids anyone from accepting less than.

    At the moment, someone working full time on the minimum wage pays tax on just under half their income at 20%. This is self-evidently stupid. We as a society have created this definition of the amount of money that everyone must earn by law, and then we tax them? WTF?
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    (Original post by mart2306)
    Lower proportionate decrease in their income tax?

    How about the actual figure they would be better off by? How much would that be for say a shop assistant working 16 hours a week at £5.80 an hour (minimum wage for us older people)?


    While an increase in tax allowance would benefit full time workers and some part timers, wouldn't benefit others at all.
    Someone working 20 hours a week while kids are at school may not get a penny from an increase in allowance.
    How many part timers earn below current tax threshold a year and therefore wouldn't benefit from an increase? Those are your poorest.
    Oh look, includes many students in that too.....
    You are right in the sense that the figures we are referring to do not include the actual lowest income earners such as students working over the weekend who do not earn enough to pay tax.

    However, I don’t believe that is the correct group to target. We want to give significant tax breaks to those such as families working full time on the minimum wage. These are the people who tend to fall in the brackets of the relative poverty line.
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    Who ******* cares about students? They live, in effect, for "free" for 3 years. They're just as well off now as they've ever been. Better, even, because prices of a lot of things are going down to "beat" the credit crunch.
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    (Original post by sconzey)
    At the moment, someone working full time on the minimum wage pays tax on just under half their income at 20%. This is self-evidently stupid. We as a society have created this definition of the amount of money that everyone must earn by law, and then we tax them? WTF?
    It's not as simple as that. The minimum wage lets say £5.20 wasn't just plucked out of the sky, it was calculated to include taxable income and other issues such as N.I etc (although that doesn't come from the wage)

    You could say £5.20 isn't the minimum we expect people to be able to live on, it's (£5.20 x 40 x 52) x 0.8.
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    (Original post by Anony mouse)
    You may have underestimated the value of tax breaks for the poorest section of society.
    Indeed. I earn just a little under the average age (nationally, that is - I'm doing okay for my age and the fact that I'm single, etc.), and this would make me about a few hundred quid a month better off. That's a pretty sizable amount of money!
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    (Original post by Cardozo)
    You could say £5.20 isn't the minimum we expect people to be able to live on, it's (£5.20 x 40 x 52) x 0.8.
    That's mad. And I don't doubt that you're correct, but that's utterly mad. For those who's value to an employer is between the pre- and post-tax level, they must feel mighty great knowing that the reason they can't find a job is because the government have decided they can't pay enough tax to justify letting them work.
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    Ooh, a libertarian bill that I have no problem with agreeing with
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    (Original post by Cardozo)
    It's not as simple as that. The minimum wage lets say £5.20 wasn't just plucked out of the sky, it was calculated to include taxable income and other issues such as N.I etc (although that doesn't come from the wage)

    You could say £5.20 isn't the minimum we expect people to be able to live on, it's (£5.20 x 40 x 52) x 0.8.
    I was under the impression that the current minimum wage was based on increases as a percentage over the past few years.
    Tax and NI on minimum wage isn't great, but many work less than full time. Those are the poorest. Full timers at least can bring home a full wage.
    No idea why you used 0.8 at all.
    NI is anything over £110 (off the top of my head) a week, tax is on just over £6k a year at the moment.
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    (Original post by sconzey)
    Well yes, that's precisely the point. In this country we have a mandatory minimum wage -- a wage which the force of law forbids anyone from accepting less than.

    At the moment, someone working full time on the minimum wage pays tax on just under half their income at 20%. This is self-evidently stupid. We as a society have created this definition of the amount of money that everyone must earn by law, and then we tax them? WTF?

    No, its a wage that the force of law forbids employers to pay employees less than.
    Doesn't apply to self employed or company directors.

    And yes, we create this hourly rate (not the amount everyone must earn by law per year!) that after a point is taxable.
    The full time minimum wage workers will also use the services of this country, use what the taxes are being paid for. Why not tax them?
    They aren't taxed as much as higher earners - someone on £20k a year is paying a lot more tax than someone on minimum wage. Neither gets preferential treatment, neither gets more votes in an election, neither gets better service.

    If you want to help the poorest, increase working tax credits. That gives more money where its needed, not just giving some a little extra and some nothing extra. Neither does it give the higher earners at least as much extra as the full time minimum wage earners.
    Gives more to the poor and nothing extra to the richer people.

    Or are the poor not the ones that need the help, really its being suggested for the rich?
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    (Original post by Alasdair)
    Indeed. I earn just a little under the average age (nationally, that is - I'm doing okay for my age and the fact that I'm single, etc.), and this would make me about a few hundred quid a month better off. That's a pretty sizable amount of money!
    A little under the average wage makes you a lot better off than minimum wage earners.
 
 
 
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