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

[Redpipe]

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]

seasickgirl

You have proved my point! You know the top 1% bracket starts at £160K earnings don't you? So someone earning that amount would pay around 80k in tax and ni so would be left with 80k not millions!

[AuntieMaggie]

Tax fraud counts for something like 45% (including tv licenses, etc) compared to benefit fraud (which we hear loads more about) of the 20 billion it costs the public sector each year. In my simple logic that's almost like people robbing essential public sector services (I do realise its not that simple and not all of this money would go towards that)

[NotDead]

its not the proportion at all! Do you get charged less for a loaf of bread based on your income?

a loaf of bread to me is 2% of my weekly income. To someone taking home 100k a loaf of bread is 0.01%

a loaf of bread is massively more expensive to the poor than to the rich ..proportionally. .

[Justforlaughs]

Redpipe your premise on a £160k earner is wrong. They pay no tax on the first £10k, then 20% tax on the next £25k, 40% on the next £115k and 50% on the rest (or thereabouts), in other words, on a £160k wage you would pay £56k in tax not £80k, however I agree that there is a misconception about people paying tax. On the other hand, many contractors for large companies DO avoid paying teh full rate of tax by setting up their own limited company. It's not illegal and is a perfectly valid way of doing things, it may not be the most moral thing ever, but it's up to the government to close the loophole allowing it to happen.

[Redpipe]

notdead

Of course a loaf of bread will be proportionately more to a lower earner. You're stating the obvious. My post is about people believing that the majority of high earners get out of paying tax when in reality it is the minority.

[ivykaty44]

Phil Collins
Tracy Emin
Jenson Button
Lewis Hamilton
Sir Philip Green
Sir Mick Jagger
all the above are tax exiles


Sir David Rowat Barclay and Sir Frederick Hugh Barclay are worth roughly £2.35 billion in 2013 are also accused of being tax exiles and there address is also in Monaco

This is why I end up believing that these rich people just avoid paying tax like the plague

Rothemere owner of the daily mail is another tax exile - he is worth roughy £1,3 billion

Perhaps my view is stilted - but I wonder if you went through the times rich list of say 350 people - how many are avoiding avidly paying tax by being tax exiles

[utreas]

YADNBU without the wealthiest people in society we would be substantially worse off as a country.

[Redpipe]

ivykaty

But you are talking about the times rich list. They are the minority of the 1%.
It;s the assumption that if you're a high earner you have means to evade tax when in reality it's just not the case for the majority.

[Justforlaughs]

In answer to your OP, the reason people believe it, is because it's printed on the front page of the tabloids on a regular basis.

[Redpipe]

justforlaughs

You are right but the people who believe this shite are the same people who belittle people for believing other sensationalist front page headline grabbers

[ivykaty44]

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

that was the question you asked

followed by

when the figures today show that the top 1% of earner actually pay a third of all tax collected.

that statement

I answered the question

and you come back with this

But you are talking about the times rich list. They are the minority of the 1%.

woudl that be the same 1% that you were talking about in your first OP?

[Redpipe]

No ivykaty

I am talking about the 300'000 who are in the top 1% of earners which comprises a minority of super rich people but is made up of a majority of earners who pay tax and earn a lot less than a million a year.

[NotDavidTennant]

Where are your statistics from? How are earnings calculated? What taxes are covered? (I'm assuming it's just income tax).

Many of the mega-rich are not domiciled in this country for tax purposes, or are able to arrange for their earnings to paid in ways other than as taxable income, so would they even appear in your statistics?

Also, just because the statistic you have seen refers to the top 1% why do you assume that that is the same group as people are referring to as 'the rich'? I'm pretty sure when people talk about 'the rich' avoiding taxes they're not talking about people on £160k. They're talking about the top 0.1% or maybe even the top 0.01%. They are talking about people who are earning millions.

[ivykaty44]

thing is I gave a list of people who are tax exiles OP - so they don't pay any tax and therefore can't be including in the top 1% earners paying tax

[Redpipe]

notdavidtennant

Would you say some one earning £160'000 a year was rich?

[Redpipe]

basically the top 1% of earners pay nearly 30% of all income tax collected by the government in this country.

[NotDead]

um yes..but people in the top 1% of households in terms of income aren't the super rich. You 'only' need a combined net income of about 100k to be in the top 1% of household incomes.

[WhenDoISleep]

JustforLaughs

A person on £160k has no tax-free personal allowance, so they pay tax on every £ earned.

A rough calculation puts their income tax paid at approx. £58k and National Insurance at £6.4k - ignoring any pension contributions, etc.

[ivykaty44]

redpipe - no the top 1% of earners do not pay nearly 30% of all income tax

the top 1% of tax payers pay 30% of all income tax collected by this government

A wage of £160k

pays

£58098 in income tax
£6414 in National Insurance

Where as someone earning £50k

pays

£9822 in income tax
£4214 in National Insurance

so they would earn £110k less but pay £2k less in NI

[Redpipe]

ivykaty

I really don't understand why you wrote
"redpipe - no the top 1% of earners do not pay nearly 30% of all income tax

the top 1% of tax payers pay 30% of all income tax collected by this government"

The official figures state that they do?

[ivykaty44]

redpipe

the top 1% of earners and the top 1% of tax payers is different, it is not the same thing

[Redpipe]

notdead

This is exactly my point. The top 1% earners are often flippantly referred to as tax avoiders when in reality the majority are not tax avoiders and in fact pay 30% of all taxes collected by the government.
You have stated exactly what my OP is about.

[ivykaty44]

redpipe - the top 1% of tax payers doesn't include the top earners that are avoiding paying tax - that whole 1% are paying tax and not avoiding so it can't be a majority of them - it is all of them

[Redpipe]

But putting aside the few (absolute minority) super rich/rich in this country who avoid or evade tax the top earners are also the top tax tax payers.

My OP is about people immediately jumping on 'the rich' saying "oh they don't pay enough they can get out of paying tax when in reality the majority of rich people in this country do not avoid tax and in fact pay 30% of all tax collected.

[IShallWearMidnight]

if you're not tax resident in the UK, then you aren't avoiding tax, you're just not paying tax that isn't due. If it's not due, you don't owe it, therefore don't need to pay it.

However, if you don't like the rules about tax residency, then that's what you should be complaining/campaigning about, not that people are doing something legal. And a further point, non UK tax residents are generally paying income tax somewhere else (ie to the country where they are tax resident). It's not up to the UK to unilaterally decide to whip a slice of another country's tax take.

But on the third hand , there is a lot of murkiness surrounding the whole area, and IME tax advisers would welcome it all being sorted out and made more transparent.