to think a flat tax of 25% for all on everything would be much fairer?

[peapodlovescuddles]

51% is ridiculous. People shouldn't be penalised for working hard their entire life (and I know this will be controversial) and being much better than average at what they doI know the economy is in trouble but surely alienating the richest portion of society is a stupid idea?
£150,000 isn't a ridiculous salary, there are plenty of middle class professionals who aren't living a lavish lifestyle earning that much.

I think I love you, Xenia!

Welshbyrd - You are not counting the tax credits then? The clue is the name.

They are not paying the most tax except on a proportionate basis. The poor are heavily subsidised by those of us who are well off and work very very long hours to fund them.

Michael Caine has the right idea from the weekend papers..."We've got three-and-a-half million layabouts laying about on benefits, and I'm 76, getting up at 6am to go to work to keep them. Let's get everybody back to work so we can save a couple of billion and cut tax, not keep sticking it on."

CGT is marginal in the sense that there is a de minimis level. That's not a flat rate.

I don't see how I'm being rude. The figures as originally quoted were talking about the total tax burden - which includes income tax, VAT, CGT, etc - not income tax alone. I dispute the idea that high earners pay 71% of income tax on the grounds I have already set out. You can work out for yourself that the latter idea is very likely to be untrue.

The plan to "waste" money on the public sector is actually a very good example of Keynesian economics which states that an economic slump can be ridden out by increasing - not cutting - public sector spending. Perhaps this will be deemed rude, too, but I am more inclined to give credence to the thinking of a world-famous economist than to knee-jerk reactions on a website chat thread.

Total departmental expenditure budgeted - 387bn.

Total borrowing - 175bn.

Total funded from taxes of all sorts - 212bn (where else would it come from?)

23% of this is 49bn. This is apparently funded by the top 1% of earners.

Say that two thirds of the population is "earning" (ie not in education, on the dole, or on a pension.) That's 40 million people - 1 per cent of that is 400,000.

Top 10% elsewhere defined as earning 50k or over.

That means that each of these earners is paying an average in tax of all sorts of £490k.

Even if this represents all taxes and it is half of everything these people earn, that means that one in 100 people in this country is not just a millionaire but is earning a million pounds a year. In other words, you will know at least one of them and maybe more. Do you? All of you? And do they constantly complain that a full half of their income is going back to the taxman?

This does not seem likely to me. I suggest that either the figures have been misquoted or they have been misrepresented.

Glad that us Keynesians seem to have a competent (living) economist on our side

What do you reckon to Richard Murphy, MIFLAW?

First time I've heard of him but he sounds like my kinda guy ...

I'd rather it were widened.

Increases in excise duty will raise the same as the proposed tax increase to 51.5% (tax and NI). The treasury expect 79% of higher earners to avoid lawfully paying the higher tax rate apparently in their figures. It is simply there for political reasons as a new rate and will help destroy the economy even more.

As for whether high spending is teh way out of this that remains to be seen. Even the Government seems to have realised that isn't alone going to be enough by any means.

Income inequality if the poor have basic needs met is not a bad thing at all. It's an incentive to people to do better and the wealth trickles down. Hurt the rich and you damage the poor.

What's your definition of a "basic need" Xenia? It almost sounds like you think the rich should dictate the level of tax they would like to pay...

Xenia....because it is all that straight forward and all choice....

If I hd a choice I'd say no one should pay more than say £50k a year tax and all income above that level of taxation you keep 100% and I'd have a flat tax at about 20% and no allowances.

Basic need - well I believe in absolute poverty rather than relative poverty. So we meet people's needs for housing and food and heat etc of course

but people have different abilities, etc....not everyone can be in a highpaid proffession, but hard work/pay don't really add up....I would say that many regular people work their socks off and that many of those are working in sectors we simply couldn't be without...so, unless pays actually reflect the persons effort, etc.....taxing people the same way simply is not on....and don't forget, it is not those eople on low paid jobs you have the roblem with (not you in person now, Xenia...meaning many people)....it is , I assume those that are perceived NOT to add to the system a all....those perceived benefits "scroungers"...so...why punish people that try to earn their living....

As my mother often said life isn't fair. It is ridiculous to try to evenout inequalities. We are born ugly or pretty, clever or thick, well or sick etc.

If those who can sell their services only at the rate per hour of cleaners only get the minimum wage so be it - they are alive and well and fed. If they are jealous of others then they need to spend more time in church.

well...what about bin=man...we would ive in aSHIT WORLD without their services.....nurses,nursery nurses, police,armed forces....well you get my drift....o.k. not bottom line workers...but their pay does not reflect their effort.....alos, Nursing Home assistent, and auxiliary nurses, etc....they mostly work hard for pittance....
and I do believe that we should at least try to even out inequalities....yes, there are things that can't be changed....
but why make it more difficult for people that are trying to do their best and are valuable members of society........
And I would also say, that if low paid jobs are taxed even more, to give the poor rich a brek ....than you would loose any incentive for anyone to do those jobs altogether....

People become bin men because they need to eat and work. The fact someone else might earn 100% what they do doing something else doesn't mean the bin man can do that something else.

Miflaw - I have provided links to the HMRC statistics and they reconcile to the figures provided by Takver from the National Office of Statistics. If you don't want to believe them (or, more likely, can't be bothered to read or understand them) then fine.

But for the record you are making the error of confusing income tax revenues with expenditure. Our expenditure is not met solely by income tax revenues - there are revenues from other taxes and there is also a massive slug of borrowing.

The total income tax burden is £155,000,000. Of this tax burden, 71% is met by the top 10% of borrowers.

There are more interesting statistics about (for me the more interesting debate) around proportionality.

The argument articulated below is that poorer people pay a greater proportion of their income in taxation. Which of course is also not true.

Take a look at page 73 from Takver's link from the ONS here From this you can see that the more you earn, the larger share of your income goes in tax ...

I am not opposed to paying the 50% rate. I just want to clear up some popular misconceptions.

met by the top 10% of taxpayers I should say.

I'm not sure Xenia that one can expect the masses to be grateful. Hope maybe. But surely not expect