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 ?

I agree personally that gains and income should be taxed at the same rates. But those rates are a clear government choice to encourage investment in companies. I wouldn’t say that was a loophole as gains and income are clearly defined and people don’t pick hoW income is classed and therefore how much they pay.

To me a loophole is a gap in legislation that allows people or companies to manipulate their tax liability. People often refer on these threads to multinational companies manipulating taxes through the use of loopholes and to rich individuals doing this too. I want to know which loopholes.

Surely if you made such a massive change to the dividend tax rate you’d see huge repercussions in the economy including company survival, growth and employment?

I think people just get the language confused, the media often does too.

The gov are going to have to increase taxes in some form because the deficit is so high. The biggest since WW2 I believe.

This is an opinion forum @shielder yet you seem intent on closing down conversation and individual's stories with insults and rudely expressed exasperation.

Plus it’s all relative. My parents live entirely on their 2 state pensions, but are wealthier than they’ve ever been previously in their lives by a long way, and are very comfortable (at last).

Opinion carries far more weight if the reasons for said opinion are based on reality....

Where have I tried to shut down debate?

An individual's story is just that, individual which is why wider statistics are important.

Benefit bashing & blaming the boat people is exhausting & I don't adds anything to the debate. You are welcome to disagree though.

PAYE is a cheap and efficient means of increasing tax paid. I’m PAYE and quite willing to pay my share but a bit sick of being easy pickings over going after landlords who pay no tax ( I know 3) and self employed cash in handers who appear to earn minimum wage but have way more disposable income than I do (I know much more than 3 of those). I can’t claim to understand the tax affairs of big companies but they need to be paying their way too, the complexities of not stifling growth I agree with but there must be a middle ground.

@GongFarmer your first post on the thread appears to be the one telling me I’m shutting down debate & being rude. Do you have anything to actually add to the debate? Do you disagree with one of my opinions?

PAYE is a cheap and efficient means of increasing tax paid.

It is, I fall into the annoying 50-60k tax bracket which does piss me off. I also believe child benefit should revert to a universal benefit, controversial I know!

For earned money, there's more of it goes on tax than just PAYE. In the example up thread of someone on £20000, their tax and NI is £2300. (Not £2000 btw). However there are additional taxes - council tax, that's another £1600 (average from A-C across the UK as a whole). So already we're at £3900 in tax, or around 20%. Then there's VAT which is another 20% on everything you buy, with that wage that's already been taxed at 20%. On that kind of wage, most of it is spent, not saved, so a £20k earner is paying at least 30% tax overall.

posted too soon and tired so will repost tomorrow!

Sadly though business owners who pay themselves a nominal salary and then dividends which are taxed about 25% less than salary income.

Or landlords who become limited companies to pay 25% corporation tax rather than 40% if they were higher income tax payers.

Those don't encourage investment or at least not investment that benefits the economy.

As said earlier in the thread about 10% of people who get £1 million plus in income and gains pay just 11% tax rate. Because, loopholes.

In a nutshell I think income and CGT should be aligned.

And I think CGT should include all property gains. There is absolutely no sound reasoning for people to be able to accumulate AND PASS ON such an enormous untaxed sum.

Post #4 got it.

We should tax income less and wealth/assets more. So higher CGT and less income tax, and higher inheritance tax.

That encourages people to work more and hoard less wealth.

Unfortunately neither of the two main parties will make it happen despite all the bluster from various parties saying they are going to tax the rich. You tax the rich by taxing assets.

Taxing income is just a disincentive for people who are productive.

But they're not loopholes - that's all official government policies/rules legislated over decades.

The dividend figures are way wrong because the company has paid corporation tax on the dividends and then personal tax is on top, so say a one man building firm pays very similar taxes now whether they're a sole trader or a limited company. There's really not the same benefit that there was 20 years ago because corp tax rates and personal dividend tax rates have increased.

Yes to taxes on wealth (capital) but extend to income from it, i.e. tax increases on interest and investment dividends too, as well as pensions. Either broaden NIC to ALL income or scrap NIC and increase income tax rates. Too much of the tax burden is on workers.

The sole director will be paying CT on any profit no allowance and dividend tax plus income tax

There’s enough taxes on small set ups and if you double any of it you’ll stop people setting up businesses and growing them

None of that is loopholes!

A company car isn't just for self employed with their own limited company. EG NHS staff can benefit massively from their salary sacrifice scheme for electric company cars - very low benefit in kind and the salary sacrifice means less tax on the wages sacrificed. Same with all other employers offering salary sacrifice on company cars. Same rules and taxes as for a self employed person with a limited company. I can't see a loophole!

Re business expenses, unless they are fraudulently/illegally claiming personal expenses, then all expenses claimed have to be wholly and exclusively for the business. You can't (legally) just claim lots of things because you feel like it. There are rules as to what you can claim and benefit in kind rules for personal benefit to tax them. It sounds more like you're talking about illegal tax evasion rather than a loophole!

I don’t agree with CGT on main residence but if pp want to increase CGT alone it’s not that much of overall tax take

Around 5%

Income tax, NI and VAT and CT make up most of receipts

There's no logic at all why, say, a pensioner with income of £18.5k comprising say £12k pension and £8.5k interest/dividends pays no tax nor NIC, yet a worker on £18.5k of wages, pays around £2k of that in tax/NIC.

A pensioner on £18.5k pays exactly the same amount of tax as a wage earner on the same amount, ie £1200. That pensioner will have paid NI for a minimum of 35 years, in many cases as many as 50 years.

No they don't. They dont pay NIC and the part you quoted clearly says interest and dividends which they dont pay tax on at the levels I said which is a typical/common scenario. And many wont have paid NIC for 35 years either.

They do. A pensioner on £18.5k is far more likely to derive their additional income from an occupational pension than interest and dividends and it’s all taxed at 20% above the personal allowance which is the same for everyone. You have to pay NI for a minimum of 35 years to claim a full state pension. I paid for 46 years and many people will have paid for 50 now the pension age has been raised.

Additionally age is no protection from paying council tax, VAT, fuel duty and the plethora of other regressive taxes. The only difference conferred by age is NI exemption.

Dividends are treated as income (and taxed just a whisker off PAYE now).

I get the impression we have buckets of money, it just gets squandered by the government. They siphon off the cash and then make us fight over who should be paying more