Should the Lower Rate of Income Tax be 40%

[ChilledOut79]

I have read so many posts over the recent Months regarding adding VAT to education provision & Labour tax plans.

All these posts seem to have recurring theme to tax "someone else" more, so the net contributors (who already subsidise net recipients through tax take), have to pay even more in the name of funding the NHS/state schools etc.

It seems to me, If funding services are that much of a priority, we should increase the base rate of income tax to 40% for everyone.

This would fund all vital services and ensure all mainstream tax payers have the same skin in the game.

What’s your household income (before tax) @ChilledOut79

I would not advocate 40% as the lower rate, but I would have a higher basis rate than we have now, and a larger personal allowance. Too much focus on the marginal rate, same with national insurance.

The personal allowance should be the minimum wage for full time employment or higher in my opinion.

Nope. People need to learn to support themselves not rely on others paying your way through life.

Hmm. But people can't do that now because younger people can't afford to buy houses. So let's tax them 40% because they won't have had the same opportunity as you.

Sounds like a wonderful plan.

You are aware that it’s not possible to channel profit made into the uk to non uk jurisdictions? That there are a whole host of tax rules which address this such as BEPS, transfer pricing, thin cap, etc etc. Amazon pays a huge amount of tax- the myth it doesn’t comes from a story (I think in the Guardian) based on the tax made by a small uk subsidiary. Starbucks are franchises and also pay a lot of tax.

the main tax gap identified by HMRC is not large business which HMRC tends to be quite good at going after. It’s small businesses which are not reporting their income and paying the tax due. There are no easy answers though as this tends to be difficult and expensive to enforce.

Seriously, how can anyone think this is a reasonable answer? People on minimum wage jobs, which there are many of, could barely survive.
So we have higher rent and mortgages, massive increase in energy bills, massive increase in food costs in a nation which already has low salaries across the board, except for the very few at the top, and now you think that taxing everyone at 40% is the answer?
I've never been more pissed off at a thread.

Have you the one about the “squeezed middle” who are already struggling to make ends meet and aren’t entitled to any benefits?? If anything the start of the 40% tax band needs to move up to account for wages not going relatively as far as they used to.

I don't think op is really in touch with the reality of what living on minimum wage (or let's be honest, the average wage) is like.

I would suggest HMRC looks at taking tax and NI payments from barbers, nail salons and takeaways quarterly if not monthly.

Once they collect the businesses money they can come for personal tax.

Most minimum wage and low paid jobs are useful to society.

A lot of high paid jobs are pointless really, or don't deserve such high pay.

Maybe we should rethink the whole income/reward structure completely.

You might find you owe a lot more that way though OP.

I'm sure you'll be more than happy to pay up, right?

@Ottervision even many in good incomes incomes are just about managing and this will tip them over.
All that will happen is the government will end up paying it back somehow or another in benefits when people can't survive.
Maybe this is what they want - everyone on universal income.

My point here is the majority here, always think additional tax should come from others who "have more" without any thought these people too are struggling to make ends meet.

It's okay though that group can pay even more if our fair share!

I would advocate for a universal income tax rate. It's about time everyone proportionately pays the same percentage.

Nope. We need minimum wage workers to be able to afford to be minimum wage workers. If we tax people into penury, we will have chaos, and/or need to pay much more in top-up benefits to keep people fed and housed, plus much more in services such as health and social care. It just won't work at the lower end.

As you climb the income scale, necessities take up a smaller and smaller proportion of your budget. That's not "proportional" either. It can't be and it won't be. Which is why you need a tapered tax regime to keep the whole show on the road.

Except that’s not how tax works. You don’t pay 40% tax on all you earn. Only t(e bit above the 40% threshold.

@ChilledOut79

To begin with I would look at how we can tax companies like Amazon / Starbucks etc.

I hate this go-to line when discussing taxation. "Let's tax Starbucks / Amazon 'etc'"

It's so tedious and unoriginal. Also, who would be the 'etc'?

I think the opposite - raise the lower tax threshold by a lot (up to at least £15k but preferably £20k). People at the lower income end of the spectrum tend to actually spend their money so if it isn't paid in income tax it'll be paying for goods, services (ie wages) and vat. Plus if we slowly raise tax thresholds we can also look at reducing the amount paid out in in-work benefits because if lower-income people can keep more of their earned money we can stop giving it back to them as handouts.

OP is a house flipper.

Contributing very little to society.

Carers, nurses, cleaners, shop workers are vital, on the other hand...

I think op should pay more tax.

Oh it's small businesses, is it? Practically, how do they not report their income?

These threads by provileged high earners are getting tedious now. And I sat that as someone who earns well into the 40% tax bracket. It’s shows a meanness of spirit that I just can’t get my head around and shows economic illiteracy.

If low earners paid more tax then either you push people into abject poverty, you top them up with benefits to make up the difference (negating the whole point) or wages need to rise by a lot and then you’ll have people like the OP bleating about rampant inflation.

I encourage them to keep revealing their tone deaf entitlement for all to see. Ordinary people should hear what they really think of us.

Totally agree! If we keep 60% of what we earn that’ll encourage us to earn more rather than fear the 40% tax band as present. It’ll also raise a huge amount for public sector improvements.

That would only work if there was a level starting point but there isn't.

Those UK based companies, who register IP in non tax jurisdictions, then lease / charge it back to their UK company to move the profit out of the UK.

It seems to me, If funding services are that much of a priority, we should increase the base rate of income tax to 40% for everyone.

I mean it sounds possible if you don't understand maths or tax.

It would plunge millions into poverty and completely fuck the economy. Apart from that it sounds great

It's funny how there's no end of interest on whom and how much people pay in taxes and so little interest in how the money is managed. Mismanagement, waste, unaccountability are big problems that no amount of tax increases will ever solve.

Not a house flipper, I don't sell them. They are all rented out.

FYI I am not in the 40% bracket and pay a higher tax rate. Not the point of this thread though.

At some point, the squeezed middle won't be able to pay any more to fund the services those who contribute less seem to be screaming for additional funding.