The Rich According to the Guardian

[Judy1234]

www.guardian.co.uk/money/2008/aug/04/workandcareers.executivesalaries

Potoroo - Very sensible to have done nil rate band planning. it is simple to do and anyone who is married should make sure they change the way they own their house to tenants in common (as opposed to joint tenants) so that the first to die is able to utilise their nil rate band.

In fact Dittany and MsDemeanor surely think a Will is tax avoidance at its most cynical?

And I pay the maximum amount that I can into my pension - which is also a form of tax avoidance I guess.

ftr: can I just express my admiration at your perseverance on this thread today. You have far more patience than I have!

Dittany: you said at 16:59 that you would like to 'move towards a fairer society' Could you explain what this woolly phrase means? Also could you explain precisely what your tax policy would be that would create such a society?

(Although in many cases since the latest tax changes nil rate band planning isn't needed now by the way which I hope if you did it recently your lawyer explained as you now on the second death the spouse has both spouses's bands although sometimes it's still wise - in a sense inheritance tax is a tax on the stupid who choose not to tax plan and give money away earlier than 7 years of death and unlucky, just as the lottery is a tax on the poor)

This is the point - everyone does what they can lawfully to minimise their tax bills. What some people resent is others having very high incomes I suspect at heart and they would like some correction, a return to the £60 - 99% upper rate tax bands we had in the 70s. I remember my father an NHS consultant (so not massively rich) paying 66% upper rate tax on earned NHS salary at the top rate plus an extra 15% on top of that - investment income surcharge on interest on his building society savings which were taxed at over 80%. At that point people started leaving the UK for tax reasons. I think some very high earners were on 99% tax on their top earnings. This is the pure socialist position - tax the rich until the pips squeaks so it feels fairer. But the result is less tax is paid and the rich just leave.

Charge us all a flat rate 10% or 20% and say once you've paid over £50k a year tax no more tax and perhaps dole out £200 a week to all over 18s and abolish benefits, tax reliefs etc of all kinds (and obviously cut back what the state provides massively too) and things would be a lot simpler and there would be more incentive to work.

So Jane stays home with her baby and gets the £200 a week. Julie earns £20k a year and pays £4k 20% tax. Jenny earns £100k a year and pays £20,000 tax. Jemima earns £500k a year and pays £50k tax and £100k of her income she pays no tax.

but Xenia you fail to answer the question, do you really want to go and live in Bulgaria, where they have a 10% tax rate? Do you have any idea what the infrastructure is like there, what public services are like?
Sweden has a top tax rate of 55%, but public services are top rate, free childcare and long paternity and maternity leave, etc. I know which country i would rather live in.
I don't like the kind of things are taxes are spent on but i don't really see how a 10% flat rate could actually work.

riven: if you were more interested in money you would probably have found out about these things, like the more wealthy do. You have just admitted that you don't know what you are talking about!!
It rather invalidates your arguments.

Here is the moneysavingexpert page on ISAs. I'll send my bill for financial advice in the post.

Getting paid £200 a week for staying at home is a nonsense. Completely unworkable. If the main wage earner wasn't taxed so highly then a second person could afford to stay at home. It's bureaucrats you want to cut back on.

Riven your husband can pay into a pension and then avoids 100% of the tax on that part of his salary. He can buy an ISA which is tax free. you could ensure each of you work and therefore both can earn more paying 20% tax than just one of you paying 40%. You can covenant to charity and claim back the tax on your tax return. That's the tip of the iceberg. He may be able to set himself up in business instead of having an employer and save more tax.

If you were paid £200 a week whether you work or not benefit cheats would be abolished, all the wasted public sector money spent on tracking them down would go, admittedly some accountants would lose their jobs. NI could be abolished. State pensions and benefits could go. It's not my idea. Many many people have proposed a guaranteed minimum income.

Would I live in Bulgaria? Possibly if UK tax were too high because I am not really someone who needs infrastructure and I would earn enough to insulate myself from problems and I would obviously travel around the world anyone so get my luxury and infrastructure on trips. Mind you I am the one who bought the island with no infrastructure on it - I don't really seek or desire luxury or infrastructure, simplicity is better.

You have to switch your lights off in the evening because they don't have enough leccie.

In Bulgaria

You could get a farm and get back down to earth

Haven't read much of this thread but two points:

1)Many rich people try to do the "right thing" but many also earn money "immorally".

2)You might say that the is a "deserving poor" and an "undeserving poor".

So I can't see how you will resolve this debate. But surely policticians and journalists should monitor stats such as the numbers of people in fuel poverty (absolute poverty) and the disparity between rich and poor (relative poverty).

have a good weekend folks.

Xenia - If you or a member of your family were in a car crash or fell out of a tree, you would need infrastructure. A decent road for the ambulance to whizz you to a hospital containing decent staff and equipment. Or perhaps an air ambulance to pick you up and take you? Nobody can live their life in a bubble.

And about that nil rate band planning. It is wise as your spouse might remarry after your death - will he then get two spousal IHT exemptions? I don't think so.

I'm not nitpicking, dittany. I was trying to point out that it's woolly thinking to cry, "it's not fair!" without actually defining what is fair . It's not 'zooming in on one thing'. On the contrary, it is the very heart of the matter.

By the way, for one last time...
The tax avoiders do pay the tax that they owe according to the laws of the land. They just don't pay the tax that you think they should. Can you not see the difference?

Tax is not fair. Wake up and smell the coffee. We're being robbed blind.

I despair.

Dittany you said

"My "attack" has been levelled at the wealthy in this country who avoid income tax ...." But you are confusing so many different things when you talk about avoidance. To you, avoidance is represented by simply using the laws for the purposes they were intended.

"... and on those wealthy people (of whom there are many) who believe that their wealth somehow makes them superior to those of us who live on average incomes or are poor." Ah this is the real issue, isn't it? You imagine that wealthy people believe they are superior. Maybe some wealthy people do, just as some poor people indulge in feelings of superiority on grounsd of looks, sporting ability, intellect ... whatever. But it is not fair to tar all the rich with this brush. It makes you sound just a little bit, well, chippy.

Dittany - Nobody who pays PAYE tax has much control over the tax they pay except for in a very small way by choosing whether or not and how much to invest in ISAs or pension funds. People who do not have tax collected on a PAYE basis are given a set of rules to which they must adhere. I don't think people should be penalised for using those rules efficiently. How rude of you to suggest that it's morally reprehensible.