Unknown

[MrJudgeyPants]

I've been banging on about the punitive levels of taxation levied on businesses and the poor for quite some time. Today, whilst reading an article in the Telegraph I read this.

"Dr Dan Boucher of the charity Care points out that the marginal effective tax rate paid by a single-income, two-child couple who earn 75 per cent of the average wage is 73 per cent - the highest in the OECD."

So let me see if I get this right. 75% of the average salary (assuming that is around £26.5k averaged out across the country) is going to be around £20k. If a person is earning £20k and decides to do some overtime / take a pay rise etc., when the loss of benefit, combined with an increase in tax, is taken into account, the poor sod is only 27p in the pound better off. Have I got that right or is my maths off target?

If my maths is correct, how can the system possibly promote independence? Surely, the situation would be improved by not taxing as much in the first place allowing, a) a higher net income from any remuneration and b), less interference from the state to reimburse the individual with money they've previously confiscated?

This system, as it stands, is utter madness.

Damnit - I forgot to add a title. Try something like "Evil Capitalist Baby Eater Has the Effrontery to Question Why Poor People Can?t Keep More of Their Own Money - The Bastard"!

at the second post obv.

You've never supported poor people, JudgeyPants. Almost everything you've defended or supported on these talkboards would make poor people worse off or already are making poor people worse off.

I've been banging on about the punitive levels of taxation levied on businesses and the poor for quite some time. Today, whilst reading an article in the Telegraph I read this.

As I've shown you before, the tax burden (as a percentage of total tax revenue) has steadily shifted in the past three decades away from corporations and towards private individuals.

So your disingenuous lamenting of the plight of the poor is incoherent. People, especially poor people, are paying more taxes overall because corporate taxation rates have steadily decreased.

And yet you still complain about corporate taxation rates.

Utter crap Ttosca. I've consistently pointed out that the living wage (after tax) as advocated by the Rowntree Foundation is actually less than the current minimum wage before tax. I have consistently questioned why the poor are taxed so heavily - I challenge you to find any post I've written where I day otherwise. There is no way that this will do anything but benefit the poor so your first post is a barefaced lie.

As for your second post, I suggest you read up on tax incidence. In a nutshell, the theory is that businesses don't 'pay' tax - the burden of taxation is split between employers, customers and shareholders. The current mess of a system encourages multinationals to set up in tax jurisdictions other than the UK because our rates are not competitive. A better solution would be to tax dividends - at least with this model, businesses would be encouraged to invest their profits back into the business without getting knobbled by the tax man. It would also mean that the burden would clearly fall on the shareholder and not the employee.

As for your point that the burden of taxation is falling more on people than companies you are probably correct but this is a function of the point I've made above. Governments can more easily tax individuals than businesses which are far more mobile in this globalised world. The real and underlying issue is that the state now confiscates half of the wealth that this country produces. We can argue until the cows come home about how much tax the government should take and what it should be doing with that money but half of the wealth of the nation is, in my opinion, far too much.

Utter crap Ttosca. I've consistently pointed out that the living wage (after tax) as advocated by the Rowntree Foundation is actually less than the current minimum wage before tax. I have consistently questioned why the poor are taxed so heavily - I challenge you to find any post I've written where I day otherwise. There is no way that this will do anything but benefit the poor so your first post is a barefaced lie.

Yes you do consistently question why the poor are taxed so heavily, but that isn't because you're motivated to help the poor, it's because you're a low-tax ideologue. If you were motivated by wanting to help the poor, you wouldn't consistently crap on social security and other measures which help the poor and, in fact, keep them from dying.

I don't think anyone earning the minimum wage should be taxed at all, and this is perfectly compatible with wishing to raise the minimum wage to a living wage.

A fair days work for a fair day's page is the very least we can expect from an economy.

As for your second post, I suggest you read up on tax incidence. In a nutshell, the theory is that businesses don't 'pay' tax - the burden of taxation is split between employers, customers and shareholders. The current mess of a system encourages multinationals to set up in tax jurisdictions other than the UK because our rates are not competitive. A better solution would be to tax dividends - at least with this model, businesses would be encouraged to invest their profits back into the business without getting knobbled by the tax man. It would also mean that the burden would clearly fall on the shareholder and not the employee.

Yes I know that theory, and it's stupid. If it were true, corporations wouldn't bother to lobby governments worth billions of pounds every year in order to lower their tax 'burden' (i.e. responsibility). The reality is that in any reasonably competitive economy, businesses cannot simply 'pass on the tax burden' to the customer, because competition means that the price will be undercut.

As for your point that the burden of taxation is falling more on people than companies you are probably correct but this is a function of the point I've made above. Governments can more easily tax individuals than businesses which are far more mobile in this globalised world. The real and underlying issue is that the state now confiscates half of the wealth that this country produces. We can argue until the cows come home about how much tax the government should take and what it should be doing with that money but half of the wealth of the nation is, in my opinion, far too much.

I think it's more likely that the reason corporations pay little tax is because of a corrupt political system and a lack of political will to collect and enforce taxes.

It wouldn't be that difficult to enact international tax laws which force companies who sell to customers or operate in an economic zone, like the EU, to pay a certain percentage of their profits, regardless of where they are based. This is perfectly feasible.

An example of this is the so-called 'Robin Hood' tax, which many EU states have already enacted, but the pygmy Osborne resisted because he wants to protect his friends in the banking sector.