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.

no it doesn't...but without bin-man (and I would think that is a difficult job, tbh)...we, as a sociaty would be in big poo (well...maybe not literally poo...more rubbish)....and yes, they do it to feed their family...take their incentive to work away than what would you do....if their wage would not mean a real difference in income (compared to claiming benefits) than, well...why would they want to do it....oh...I forgot, there are people that rather earn anything, for own self respect....so...why should they be penelized than...?
Tbh, I know that a lot of "high up" people that work in "important" places do NOT get paid that much because they actually are good at their Job, it's mostly they were lucky with their job, becauuse they were lucky enough to go oxbridge.(and have those connections)...doesn't mean they deserve their salary....
Of course there are high earners that truely deserve their high salary and are brilliant at their jobs....(so, am not saying all high earners are rubbish at their jobs)

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

I've had a look at that ONS link, and while it shows that richer people pay a greater proportion of income tax (which you'd, er, expect), it also shows that poorer people pay a greater proportion of indirect taxes. So, the highest-earning pay about 13 per cent of their income in indirect taxes, while the poorest pay in excess of 30 per cent in indirect taxes.

The equivalent proportions for income tax aren't given on that page, so I can't see how you can make a definiteive statement about exact proportions.

Or am I missing something?

Hello Policy

Yes, you are making a good point of course. The proportions for income tax are given (you have to scroll down p73 to see those). If you take the total tax burden - ie including indirect taxes (such as VAT) then those costs remain largely static and decrease relative to income the more people earn.

The whole argument about indirect taxes is however that they are payable on consumption. And in fact indirect taxes are mostly not payable on essentials such as most foods, books and newspapers, and
children?s clothing and footwear.

Quattro, I also don't understand how your

'those people earning over £50,000 pa will pay 50.5 percent of all income tax paid'

and

'to be in the top 10% of earners in this country, you just have to earn £49k.'

How do these two things marry up to showing that the top 10 per cent pays 71 per cent of the income tax? Doesn't add up, does it? (Or am I being thick?)

PS Love the 'just' when attached to a salary of £49k.

Thanks for clarifying. I think it's a bit disingenuous to ignore indirect taxes if you're trying to dismiss the proportionality argument. Indirect taxes is what tax justice campaigners have been complaining about for the last 20 years or so.

helpful information for those who don't have a problem with inequality

Not looked at them all but the Social Mobility one is interesting (well, not surprising really but...)

Yes - the graphs are at once astonishing and absolutely what we all knew all along.

Policy you are distracting me from a Very Important Report

The "just" was slightly tongue in cheek but I must admit I was surprised by that figure. If you'd asked me to guess what the top 10% of earners earned in the UK, I'd have plucked a figure (out of thin air) between £100k to £200k.

I'm not sure whether it is appropriate to include taxes on consumption around inequality is it? I mean if you don't buy a big TV then you've saved a slug of VAT, haven't you? I'd be interested to know more about why people have been campaigning on indirect taxes with the inequality agenda. Do I need to click your link?

On the table that I linked to, I cut and collapsed a line by mistake (apologies, but the table was there) what I should have said is:

Top 1% pays 23.1% of all income tax
Top 5% pays 42.3% of all income tax
Top 10% pays 53% of all income tax
Top 25% pays 71% of all income tax
Top 50% pays 88.5% of all income tax

Now I'm wondering how they account for National Insurance and how they treat that. Do they count it as income tax or not?

One last point on people leaving the country because of tax. I don't entirely buy the idea that the individuals are completely replaceable. But you're right about the bigger issue - which is when the jobs move. And the jobs ARE moving. The country's lost a whole lot of money-making jobs outsourcing manufacturing to low cost jurisdictions, inversion programmes (moving head offices to low tax jurisdictions) and offshoring generally.

Sorry

Will try to find something on VAT for you, maybe tomorrow (am watching Craig Murray making shocking allegations about the UK government at the moment)

The link is very tangential to the VAT issue.

OK, well VAT is payable on fuel, for starters (contributing to fuel poverty, a mjor problem for low-income households); adult clothing (bear in mind that most teenagers wear adult-size clothing); all appliances and white goods (why shouldn't low earners have televisions, fridges and ovens?); all sweets, savoury snacks, ice cream and lots of drinks (including fruit juices and smoothies); tampons, sanitary towels and postnatal items; car seats; alcohol, tobacco and petrol.

You could argue, of course, that some of these things aren't essential - but why should people on low incomes be reduced to living only on what is absolutely essential? That's one definition of relative poverty.

I wouldn't have a problem with VAT if it were charged only on genuine luxuries. But a cursory glance at the above list shows that it's charged on plenty of essentials (clothes, tampons, fridges, car seats) and lots of things that are necessary for a reasonable standard of living.

Dear Quattrocento

"(or, more likely, can't be bothered to read or understand them)"

Hands up to that, you are absolutely right. As a Oxford graduate and qualified accountant I struggle with long multiplication and that funny sign with two circles and the slopey line.

if you focussed on reading what is written instead of point scoring you would see that it's not me "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" - it's someone else and it's them (not egocentric little ol' you) that I am arguing with. The other person - not me - has confused "income tax burden" with "toatl tax burden" and it is their faulty reasoning I am taking apart.

You will also see that the "massive slug of borrowing" is included in my calculation. It's next to the word, "borrowing." Sorry to be so devious - they taught us that sort of low trickery and rhetoric at Oxford.

"poorer people pay a greater proportion of their income in taxation. Which of course is also not true." Erm - yes it is. I am happy to demonstrate how if you like, though it's already been done on this thread. Again, the key is that it does not say "income tax" but "taxation".

"The whole argument about indirect taxes is however that they are payable on consumption." Oh, well, that's all right then. I'll ask my boss if it's ok for me to turn up to work naked and without having a shave or a wash and if he says yes I'll have saved a packet on VAT for starters! Thanks for the tip!

If you are going to post antagonistic and controversial statements on this site could you at least do us all the courtesy of thinking about them first? Thanks.

Hear. hear, LeninGrad!

Quattro

according to your figures (noticed the change of 71% from 10% of earners to 25% - I must be getting better at this reading and understanding lark!) the top 1% or earners (based on 40m taxpayers) are forking out a princely £90 a year on income tax (based on your quoted fig of a total income tax take of £155m).

No wonder they're off to Switzerland!

Or, of course, you may have fuct up your numbers in your indecent haste to score points off the Rotten Reds. In which case you are on shaky ground criticising me or anyone else for our ability to understand numbers ...

snurks at MIFLAW's "as a Oxford graduate"

My best tax avoidance tip is to buy Jaffa Cakes instead of chocolate Hobnobs as the former are zero rated for VAT.

To be fair, Lenin, some of the posters attacking the high earners have not covered themselves in glory.
But it may be that I don't understand, not having gone to Oxford.
It's very galling to be lumped in with those few bankers who cause some problems.
But, did I menion I didn't go to Oxford, so perhaps I just don't understand.

The morality of the different rates doesn't matter as much as their effect which will be raise less tax and ensure there is less wealth in the country to subsidise the low paid. Paying 51.5% tax/NI is such a disincentive. All it incentivises is reducing income and ensuring income becomes capital taxed at 10% or 18%.

I have an island. I am not saying I will move there necessarily, but a lot of the work I do just requires email. Bulgaria has a 10% flat tax. Also all the chopping and changing for businesses simply has the effect of making them not trust the government. 51.5% now(or 2011) and perhaps next year the remove the upper NI cap so it's then 61% upper rate tax/NI and as your allowances and pension tax reliefs go it's in effect higher.

The government have admitted that from the tax on high earners, they only expect to collect 30% of the projected revenue that was stated in the budget. The 70% will be lost to perfectly legal tax avoidance measures. Politics of envy is all it is.

What? The mighty Bulgaria, toast of the civilised world, has 10% flat rate tax? Bulgaria, whose public services are famously second to none? Easyjet - a ticket for the next flight to Sofia, please! Let me at that plane!

Litchick

I only mentioned my attendance at Oxford because I had been accused of stupidity.

I did not intend to imply the reverse ie that if you hadn't been to Oxford you weren't clever.

Sorry if it was open to being read that way.

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

There is an annual CGT-free personal allowance (the same for everyone regardless of your marginal tax rate) and then a flat rate of 18% (the same for everyone regardless of your marginal tax rate) with no indexation or taper relief. In what way is that not a flat rate?

btw the only person I see being rude on this thread is MIFLAW.

It's ridiculous to conclude that anyone opposing the new higer rate of tax on high earners is opposed to a more equal society.

Why didn't the Labour government put some money by during the good times? For the vast vast majority of their tenure they have seen unprecedented revenues? It's basic good housekeeping isn't it?