to wonder why many people assume that rich people don't pay tax

(89 Posts)
Redpipe Thu 10-Oct-13 11:43:40

when the figures today show that the top 0.5% of earner actually pay a third of all tax collected.

I have seen many posters here immediate jump to the assumption that the rich don't actually pay tax in debates about taxation or about government cuts.

AIBU to think that people who claim the rich don't pay enough or that many of them evade tax are actually talking about a tiny percentage of top earners and that the vast vast majority of top earner pay their share.

Redpipe Fri 11-Oct-13 19:20:54

I'm disappointed notdead hasn't come back on to hear how her last few posts have been received.

Dahlen Fri 11-Oct-13 15:24:57

Most people don't even understand the tax system well enough to be able to judge who does and doesn't pay enough tax to be honest.

Including HMRC I sometimes feel. grin

Nickynackynoodle Fri 11-Oct-13 15:22:39

I earn £115k. I pay about £40k a year tax, I'm effectively taxed at 60% on everything over £100k because of the loss of personal allowance. I don't think I'm better than anyone, in fact I'm pretty confident that most people are better than me.
Most people don't even understand the tax system well enough to be able to judge who does and doesn't pay enough tax to be honest.

notdead honestly, you are really offensive.

bumbleymummy Fri 11-Oct-13 14:50:11

OP YANBU.

I dislike the way people think that it's ok for people who earn more to be paying a higher percentage of their income. Too many people have the attitude of 'oh, they still have much more after tax than I have therefore they can afford to pay even more' . Little appreciation of the fact that they are paying considerably more in tax and probably benefitting very little from it - just more 'we don't have what they have so they shouldn't have it' mentality.

IMO a much fairer tax system would be based on a higher 'no-tax' threshold which people on the lowest incomes would benefit from and a fixed rate for everyone else. Yes, some people will have more after they've paid their taxes but why shouldn't they?

I like the drinks in a pub analogy.

we're an example of that Scholes - set up a specialist accountancy practice, ask for Current Year Assessment for Student Finance England, despite business taking off, can't get out of CYA system till next year, so DD gets loan + grant for three years based on our first year of a new business. Nothing to do with sharp practices, dodgy accountancy or a desire to avoid/minimise tax. Lots to do with SFE being generally rubbish though.

Scholes34 Fri 11-Oct-13 13:41:55

Yes, a lot of rich people do pay tax. Mr Dyson is a very good example from a business and, I would therefore assume, a personal point of view.

I'm always amazed at the number of students I know whose parents are accountants who get a full maintenance grant. No doubt, their tax returns are based on similar information. I guess they're either very good or very bad accountants.

Redpipe Fri 11-Oct-13 13:41:32

notdead

Google Chuck Feeney or is he just giving his money to good causes to avoid tax?

Dahlen Fri 11-Oct-13 13:38:06

bachsingingmum - The problem with your oft-repeated analogy is that it fails to take into account how the rich person in the scenario achieved their wealth in the first place. Wealth redistribution is based on the argument that people accumulate wealth at the expense of others. To use another analogy, capitalism is a pyramid, with more at the bottom than at the top, but take away the bottom blocks and the top will come tumbling down. The whole tax them too much and they'll bugger off argument can be turned on its head to say treat the poor too badly and they'll revolt.

To me, it's all about fairness. And that applies to rich and poor. I would not make sweeping generalisations about any group of people based on one defining factor. Some people are selfish arses. They can be poor or rich.

However, to play devil's advocate, research consistently shows that the better off someone becomes, the less of their income they donate to charity proportionally...

Redpipe Fri 11-Oct-13 13:37:37

"I would love to set up a charity or make big tax deductable contributions to charity or get paid 10k to be the 'face' of a charoty otlr 60k to frontnout an ad campaign for one. "

Seriously notdead listen to yourself. You really do despise wealthy people don't you. I suspect you are one of the people my OP is about.

You make sweeping personality generalisations based upon someones wealth. Dear God!

BrokenSunglasses Fri 11-Oct-13 13:36:19

What?

You are making a whole lot of assumptions there NotDead.

NotDead Fri 11-Oct-13 13:30:00

wondering how many 'people who know nice rich people' are suffering from the Fawlty effect

NotDead Fri 11-Oct-13 13:28:31

yes but don't you see that inequity of wealth means that the 'nice Roch people's ypu know' are not tied uo in their own selectors because they have phenomenonal safety nets and freedoms to make choices. .. but as a group resent those freedoms being given to the majority

NotDead Fri 11-Oct-13 13:25:41

I would love to set up a charity or make big tax deductable contributions to charity or get paid 10k to be the 'face' of a charoty otlr 60k to frontnout an ad campaign for one.

I don't have the choice many wealthy people do have the choice and don't do anything selfless with their money. Agai prpportionally the lower waged give much more time and money.

btw to be in the top 10% of earners in the third wealthiest economy in the world?! how rich do you want to be? ??

BrokenSunglasses Fri 11-Oct-13 13:23:46

Wealthy people DO think they are above others

This really is just proving the OP right.

There are wealthy people that are arrogant and think they are better than others, but then there are poor people who are equally arrogant and think they are better than others.

Lots of the very wealthy people I meet are very down to earth and you can see that they appreciate what they have, even when they have worked extremely hard and made sacrifices to earn it. They are often vey compassionate, because they aren't so self involved with their own worries that they can't be open minded to a bigger picture. They are often in a position where they can dedicate a lot of time and money to causes they care about, they aren't immune to the feel good factor you get by showing kindness and altruism.

bachsingingmum Fri 11-Oct-13 13:23:14

Parliamentary Material - Tax Avoidance

House of Lords - Fair Share and Beer (from Lord Courtown,s blog)
Beer and who pays for the visit to the pub.
I have always been partial to a pint of ale and I particularly welcomed the action of My Right Honourable Friend, the Chancellor of the Exchequer, when he reduced the tax on beer. Something I hope will allow moderate enjoyment for many and also help the pubs and inns that are finding life tricky at the moment. The piece below, with thanks to Professor David K Kamerschen Phd and Professor of Economics, links beer drinking with higher rate tax payers.

THE TAX SYSTEM EXPLAINED IN BEER

Suppose that once a week, ten men go out for beer and the
bill for all ten comes to £100.

If they paid their bill the way we pay our taxes, it would
go something like this..
The first four men (the poorest) would pay nothing.
The fifth would pay £1.
The sixth would pay £3.
The seventh would pay £7.
The eighth would pay £12.
The ninth would pay £18
And the tenth man (the richest) would pay £59.

So, that's what they decided to do.

The ten men drank in the bar every week and seemed quite
happy with the arrangement until, one day, the owner caused
them a little problem. "Since you are all such good
customers," he said, "I'm going to reduce the cost of your
weekly beer by £20.” Drinks for the ten men would now cost just £80.

The group still wanted to pay their bill the way we pay our
taxes. So the first four men were unaffected. They would
still drink for free but what about the other six men? The
paying customers? How could they divide the £20 windfall so
that everyone would get his fair share? They realised that
£20 divided by six is £3.33 but if they subtracted that from
everybody's share then not only would the first four men still be
drinking for free but the fifth and sixth man would each end up
being paid to drink his beer.

So, the bar owner suggested that it would be fairer to
reduce each man's bill by a higher percentage. They decided
to follow the principle of the tax system they had been
using and he proceeded to work out the amounts he suggested
that each should now pay.
And so, the fifth man, like the first four, now paid nothing (a 100% saving).
The sixth man now paid £2 instead of £3 (a 33% saving).
The seventh man now paid £5 instead of £7 (a 28% saving).
The eighth man now paid £9 instead of £12 (a 25% saving).
The ninth man now paid £14 instead of £18 (a 22% saving).
And the tenth man now paid £49 instead of £59 (a 16% saving).
Each of the last six was better off than before with the
first four continuing to drink for free.

But, once outside the bar, the men began to compare their
savings. "I only got £1 out of the £20 saving," declared the
sixth man. He pointed to the tenth man, "but he got £10"

"Yes, that's right," exclaimed the fifth man. "I only saved
£1 too. It's unfair that he got ten times more benefit than me"

"That's true" shouted the seventh man. "Why should he get
£10 back, when I only got £2? The wealthy get all the
breaks"

"Wait a minute," yelled the first four men in unison, "we
didn't get anything at all. This new tax system exploits the
poor" The nine men surrounded the tenth and beat him up.

The next week the tenth man didn't show up for drinks, so
the nine sat down and had their beers without him. But when
it came time to pay the bill, they discovered something
important - they didn't have enough money between all of
them to pay for even half of the bill.

And that, boys and girls, journalists and government
ministers, is how our tax system works. The people who
already pay the highest taxes will naturally get the most
benefit from a tax reduction. Tax them too much, attack them
for being wealthy and they just might not show up anymore. In fact,
they might start drinking overseas, where the atmosphere is
somewhat friendlier.

David R. Kamerschen, Ph.D.
Professor of Economics.
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.

Wellwobbly Fri 11-Oct-13 13:17:17

The people who pay the most tax proportionately, is the low paid, which is outrageous, disgusting and immoral. [Please note: they are also the biggest pool. You can raise a lot of money from the poor].

Who happily and gladly keep voting Labour, who instituted this tax regime, because they bribe them with credits and God knows what else.

Since the government term of 1997 - 2010, I have become increasingly disenchanted with democracy. Most people are simply not informed enough to vote, and that they were bribed with some nice words and a honey smile (Tony Blair)... In the words of Black Adder, 'Oh, God'.

I think Plato was on to something.

hermioneweasley Fri 11-Oct-13 13:16:06

If you aren't resident in this country then how is it wrong to live somewhere else and pay tax in your country of residence? People leave the UK in their thousands every year, should they all pay UK tax just because they grew up here?

And it slightly undermines the argument that high earners won't leave the UK due to high tax rates.

I know several high earners (six figures, not Times Rich List) who travel a lot for work and have done just that.

Redpipe Fri 11-Oct-13 13:14:58

Not dead "The mistake is then carried forward into 'the reason they are poor is because they made bad choices' when the reality is 'they make bad choices because they are poor'"

Really? Are you for real? Do you honestly think that rich people have never tried to do any charity work or have empathy for others. Or set up schemes for less fortunate or less lucky? Your generalisations are insulting.

sparechange Fri 11-Oct-13 13:13:45

NotDead With all due respect, we aren't talking about people who spend £40 on dinner and £80 on jeans
These are people who spend £400 on dinner and £8k on a handbag...

Redpipe Fri 11-Oct-13 13:08:05

"Wealthy people DO think they are above others"

Notdead you are just proving my point over and over again! Can you not see the irony. Change wealthy for poor and see how you sound!

YouAreMyFavouriteWasteOfTime Fri 11-Oct-13 12:59:45

notdead - I don't understand your list. in your view are they bad things you are listing or good ones?

NotDead Fri 11-Oct-13 12:48:01

Wealthy people DO think they are above others - they very often equate the choices they are able to make with positive character values they see in themselves, instead of the reality which is that they are able to afford to make discerning and sensible choices.

I see this even in my friends 'who would eat at wetherspoons for a night out' - er people who can't afford £40 a person.. who would dress from ASDA .. er people who can't afford £80 jeans.. who would let their car run into the ground like that/not be repaired .. er people who can't afford a new one/comprehensive insurance/garage fees.. Who would drink at home from cans .. er people who can't afford more than two quid on a night in... etc etc.

'The rich' or more accurately anyone over the median, completely blind themselves to the fact that most 'value choices' and many 'character values' - eg max honesty are often only a reflection of structural issues, not personal values.

The mistake is then carried forward into 'the reason they are poor is because they made bad choices' when the reality is 'they make bad choices because they are poor'

Take for example a case close to me (me!) I know my best choice would be to do an MBA, but I can't afford to, so I am working in jobs I am more than capable to do, because I can't afford the keys to the castle - no matter what choice I make, it is limited by finance. My friends who are wealthier cannot understand why I don't have a nicer house 'you choose to live like this?!' - I have tired of explaining the barriers because they say 'you need to be more positive' yet their positivity also comes from having choices (and massages, nice hair dos, better clothes, more holidays newer computers, better sofas, nicer mattresses .. etc etc etc.)

eurochick Fri 11-Oct-13 12:42:56

The thread has moved on but I wanted to reply to this.

ThingsThatMakeYouGoHmmmmmmmmm I get that, but at current investment rates, that makes a difference of about a fiver a year for me, if that, and is more than balanced out by tax relief on charitable donations. I suspect it costs HMRC more than that to do the admin. I just don't see how it is worthwhile for people on PAYE, regardless of the level of PAYE. Also, the higher rate point would apply to all higher rate tax payers, so many under the £100k cut off at which HMRC automatically requires a return.

Redpipe Fri 11-Oct-13 12:36:47

toadinthehole

"If the very rich were declaring and paying their taxes like lesser mortals"

This kind of language (lesser mortals) is exactly the kind of sarcastic commentary I hear/read in regard to the rich. It makes the assumption that the rich think themselves above doesn't it?

I hear people all the time foaming at the mouth generalising about 'the rich' not paying their share (which obviously SOME aren't) and yet the same people have, in their life, paid cash in hand for a builder or got paid cash in hand and not declared it. But hey it's ok for them because it's peanuts compared to 'the rich'. And yet many/most of the top 1% of earners pay their fair share and don't complain.

Redpipe Fri 11-Oct-13 12:23:33

Toadinthehole

Firstly I am not talking 'nonsense'
Secondly I did not neglect to mention, I did not have the figures
Thirdly you are right people don't say "the top 1% of earners pay "no tax""
but they do generalise about rich people (which most people would agree are the top 1% of earners) getting out of paying tax.
This in my view is a lazy generalisation that is factually incorrect and is as bad as people generalising that all benefit claimants have never paid in etc etc!

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