Tax system

[Cupcakes2024]

Watching some of Jamie dimon from JP Morgan and chase bank, speech's and one point he advocated is rather than tax the rich to raise taxes is instead its better to have a balanced tax system , basically is Jamie correct ?

What does he mean by 'balanced' and 'better'?

Far as I understand its more spread across society at a more balanced level for all rather than high percentage just focusing on the rich. Apologies I don't have detailed numbers etc

I would say to Jamie that the goal needs to be a more balanced income and wealth system. Whatever tax system gets you there is fine.

Doesn't he think the rich should pay a bit more & there are too many tax breaks for the wealthy?

There are 3 tax bands, they aren't just focused on the rich. On one hand, why should someone on £20 000 pay the same rate as some one earning £200 000? The other argument is that if the rich are taxed harshly, more wealth will choose to leave the country to protect their money.

I think targeting corporations would be better e. G my local corner shop probably pays more tax than a certain online shopping giant, and British Gas has recently declared huge profits.....

Personally in this country we have too much bias on income eg PAYE vs other sources. It's doesn't help with inter generational inequality and stagnant wages.

I agree. The tax system treats those on, say, 50k as ‘wealthy’. In reality, these people tend to be middle-aged (when salaries peak) and have childcare/uni fees, mortgage to pay, a couple of cars to get to and from work, and elderly relatives to look after. The ‘wealthiest’ are actually pensioners - their disposable income is higher than the average working age couple and they tend to have amassed mortgage-free assets, too. Mass media still portrays pensioners as impoverished though.

The lack of disposable income is a real issue, our productivity has been low for yrs & assets have been hugely inflated.

I say this all the time on here but 50k is the equivalent to 28k in the early 00s, it's ridiculous!

Give over with the pensioner myth / they are not on average rolling in it; pensioners not wealthier than any other group

The group that is wealthier is the group that get inheritance- that's the real societal divide

I believe the reasoning is to make a more productive society business wise otherwise if you tax too heavy then the economy would likely stagnate, at least that's how I understand it

I had this idea a while ago for young people to be allowed to take all their first 100k earnings tax and NI free till the age of 25. It would enable them to save for a house deposit, thus reducing inequality a bit between haves and have nots re bank of mum and dad.

The other thing such a scheme would do is to inculcate work ethic. A time limit would encourage full time work. Far too many young people I think just float around on UC or flip and flop betwen part time jobs.

I see your point but with specific to gas that to me is, its easy to look at profits but what about reinvestment, new technology, etc that come from those profits

This.
Rather than fiddling with PAYE tax rates the government could focus on closing loopholes and getting companies to pay.
So for example, including dividends as income.

Dividends are taxed.

GreyhpundGirl
There are 3 tax bands, they aren't just focused on the rich. On one hand, why should someone on £20 000 pay the same rate as some one earning £200 000? The other argument is that if the rich are taxed harshly, more wealth will choose to leave the country to protect their money.

I think targeting corporations would be better e. G my local corner shop probably pays more tax than a certain online shopping giant, and British Gas has recently declared huge profits.....

A person on £20,000 pays about £2k a year in tax and national insurance.

A person on £200,000 pays £79,000 a year in tax and national insurance.

Why should the person earning 10 times as much have to pay as much tax as 38 people earning £20,000 a year.

Private banks, that I in fact loathe, should not be dictating how much of my hard earned cash the government should steal from me. How about discussing, inflated fiat, devalued currency, printing money.... the transference of my purchasing power to the State! We should all be working towards decreasing taxes for all. I'm currently trying to educate my DS how the State pickpocket - have a look at all the taxes we all pay already. Learn about the Central Bank model - I fucking hate it!

Absolutely this.

The average income for a single female pensioner is £16k pa. Not all pensioners have million pound houses and defined benefit pensions.
They do pay tax on their pension income as well.

We need to ensure it pays to work. The way Gordan Brown inventivised people to work rather than leave them in the benefit trap.

Yes, research shows that when taxes rise too high, people change their behaviours in a number of ways, for example:

1. leave the country
2. increase pension contributions
3. avoid promotions/minimise working hours
4. retire early

Businesses also change their behaviours. For example:

1. relocate production to a more tax efficient location
2. make employees redundant
3. reduce the quality of products/services
4. (Small firms) sell up and/or go bust

The reason why tax increases (or fiscal drag) tend to affect middle income earners is because a small increase in tax multiplied by the sheer number of middle income earners generates a much bigger revenue for the government than taxing a dwindling supply of high earners.

But they tend not to have huge outgoings such as childcare and mortgage. Much more disposable income than a young couple trying to work and look after young children

Soo I’m a tax adviser and I always wonder what exactly people mean when they talk about all the tax breaks available for the wealthy, I’d really love to know about them 🤣

Dividends are taxed as income - but the rate is lower than non savings/savings income to encourage folk to actually invest in companies.

Saying the system needs to be better balanced doesn't really mean a great deal. I absolutely agree that better balancing of taxation would give better results than just sticking a bit more on the top rates of income tax. But then his understanding of a better balanced tax system might be drastically different to mine.

He’s right. Tax revenues are generally considered bell curved shaped. You tax people too much they lose the incentive to earn more as so much is taken in tax (or certain go for promotion etc). If people choose to earn less then they spend less on goods and services.

The problem is the easiest way to get tax is off income. 3/5 of tax revenue is income tax and the top 1% of earners pay 30% of that. To be in that 1% you have to earn around 180k (that’s a level you aren’t talking offshore accounts in the caymans just paying not far off half your income in tax). Top 5% is 83K (so that will be nhs consultants, headteachers etc) and nearly half income taxed at 45%.

Taxing wealth would balance things out more but incredibly hard to implement.

People talk about talking corporations and amaxon (like it’s a magic source of money) but we are an international world and companies just headquarter themselves with lower rates (for example Ireland).

Problem is modern society depends on that model.

I'm a pensioner. Both my husband and i have worked hard in highly paid unpleasant jobs throughout our lives and saved pretty hard. paid lots of tax. Not happy about taking on a lot of tax burden now as i feel i've done my bit.

The area where i think should be taxed is inheritance. Going forwards its not how much you work that will give you a good standard of living, its whether or not you inherit. lazy people may end up doing better financially than hard workers

people should pay tax, even if its only a little. this gives them a steak in society and should focus people's brains (even if only a little) when they vote for services.