Why do the least well off still have the highest tax rate in the UK?

[blacksunday]

The latest data on household incomes and tax paid produced by the ONS has been neatly summarised in the Independent this morning and I am going to use their graphs here to summarise the message.

www.taxresearch.org.uk/Blog/2015/06/30/why-do-the-least-well-off-still-have-the-highest-tax-rate-in-the-uk/

The author is mostly funded by unions of one type or another which obviously puts a left wing slant to his article. Which, of course, is why you chose it.

Interestingly the poorest's contribution to Tax, NI etc is lowest at 9.70 and the overall figure is massively skewed by their 28.1% share for VAT, alcohol, tobacco and petrol. Wonder what most of that goes on?

By 'left-wing' and 'unions' you mean the working public?

Those graphs are a bit ridiculous! Of course people on a lower income will pay proportionately more indirect tax (VAT etc) simply because they have less income!

Surely the most important is the direct tax, the one you cannot avoid paying? And people on lower income pay proportionately less.

I worked for 44 years until I retired. At no time did I ever join a union, even when one was available. I cannot believe I am the only person in the country never to have joined so no, you cannot lump me and other non members in with unionists as 'working public'. Unions are, as far as I am aware, 100% left wing. If they are not I'm sure you will provide a link to prove otherwise.

I agree 80s Mum the graphs are ridiculous.

If you are on a low income it's quite easy to avoid paying excessive VAT. There's no VAT on proper food. If you don't want to pay lots of tax don't buy tobacco, lots of alcohol or junk food!

I think the point of the graphs are to show how regressive a high VAT tax rate is.

If VAT were lowered and compensated by a wealth tax or more progressive income tax, then the Total portion of income paid to taxation not just from (income tax) would not be regressive, as it is now.

The first graph shows the total portion of income paid in taxes vs. income decile. In that sense, our taxation system is regressive.

Silver-

I worked for 44 years until I retired. At no time did I ever join a union, even when one was available. I cannot believe I am the only person in the country never to have joined so no, you cannot lump me and other non members in with unionists as 'working public'. Unions are, as far as I am aware, 100% left wing. If they are not I'm sure you will provide a link to prove otherwise.

Perhaps if you had joined a union, you might today be tens of thousands of pounds richer.

Secondly, you misunderstand how unions help the working public.

It is not simply a matter of directly helping their members negotiate better terms under their particular employers. By helping members fight for a better wage and better rights at work, they are, by implication, helping ALL paid workers everywhere.

That is the nature of Capitalism. In the same way that if employers are allowed to get away with paying below a minimum wage, they avoid paying workers a legal wage and find workers willing to pay a poverty wage, if employees manage to fight for better pay and conditions, then the standard for rises everywhere.

Besides which, union are responsible for:

• Overtime pay

• Child Labour laws

• The weekend

• Health and safety laws at work

• 40 Hour week

• Paid vacations

etc. etc.

So, yes, you have benefited from unions, if you are a paid worker. And yes, you are mistaken. They're not "100% left-wing" - whatever that means. They benefit all members of the working public.

There are lies, damn lies and statistics

Thanks for that meaningless contribution, niceguy.

To be fair, it's not less meaningful than the article you've linked to.

Surely the most important is the direct tax, the one you cannot avoid paying?.

Yes. It's so very easy to avoid wearing clothes and shoes.

Batman-

What part of 'The poorest pay the highest portion of their total income in tax' do you disagree with?

I don't disagree with it as such. But you hardly need a report and some fancy column charts to work out that the vat on a bloody loaf of bread is going to be a larger percentage of a nmw workers income than it is a 40% tax payers. Give over.

But you hardly need a report and some fancy column charts to work out that the vat on a bloody loaf of bread is going to be a larger percentage of a nmw workers income than it is a 40% tax payers.

A loaf of bread is zero rated for VAT

Yeah, wrong example but hope the message was conveyed.

Just think how regressive our tax system was;

In 2009/10 the Income Tax personal allowance under a Labour government was £6,475, whereas under a Conservative coalition administration onwards, it is currently £10,600, will be £11,000 next year, with a target over £12,000 by the end of this parliament - so how many millions of THE poorest will have been taken out of income tax altogether?

As to the TRUE 'millionaires tax', Capital Gains Tax, when under a Labour government in the early years it was dropped to a tapered low of 10% before going up to a 'lofty' 18% for those with Private Equity companies and property porrfolios liquidating assets.

Oct 2007; "A speculator's budget?"
www.bbc.co.uk/blogs/thereporters/robertpeston/2007/10/a_speculators_budget.html

*Labour screwing the poorest workers, looking after the millionaires with assets, yet ONLY NOW taxes by government policy design are regressive???? lolol

Those graphs are a bit ridiculous! Of course people on a lower income will pay proportionately more indirect tax (VAT etc) simply because they have less income!

I think the point is that in a fairer society there would be less taxation through indirect regressive taxes, and more taxes based on income. The way things are in the UK is unfair and regressive and caused by successive governments desire to not put up (income) taxes. People on allowed income should obviously not pay proportionally more.

Higher income tax levels have been shown to be counter productive, as less tax is paid into the Exchequer, which ideology aside, is the purpose - especially if a government has a huge annual budget deficit.

If the poorest non workers using the likes of food banks didn't smoke, drink, or have Sky, where else would they pay tax?

On clothes they would be wearing, even if from Primark.
On fuel or transport.
On soup, detergents, cleaning material.
On computers, software, printing inks if they have school going children.

May be occasionally on cakes, chocolates and Coke - the luxuries for the poor.

Redkite .... in other words, the SAME things they could buy from Aldi when their personal allowance was £6,475 under Labour, or if not working, not much of a travel cost.

Are those computers(s) including Playstations, Xboxes a bigger flat screen TV than my 5-year old 26' LCD, an Apple product I've never cared to own, or phones more current than the one I've have for 4-years - but I chose to eat (too) well instead?

My point being, on spending citizens have more choices if taxed on consumption.

Real incomes FELL from 2008, the last governments solution to help those in need was keep putting up the likes Council Tax and National Insurance; just think how far up shit creek the poorest would have been under Labour, as around now, even THEY would have realised they needed to do something about their fat, over taxed, welfare/benefits State - getting one of those 'round to-its' - so seeing cuts WITHOUT the lower taxes, thats just not in their vocab. It wasn't from 2008, now was it????

The poorest pay the highest portion of their total income in tax.....

Its always been this way. And the rich are adapt at muddying the waters so that the poor don't even realise the extent of the unfairness.

The rich would leave the country if they were taxed too much.
So why don't we just do that and get rid of them? Would there not be a vacuum to be filled if they left? And perhaps the vacuum would be filled by those who remember being poor and so have gratitude.
Then we would all be in it together

What a shame the facts never get in the way of ideology.

Under Labour the rich were given a 10% low Capital Gains Tax while millions of the poorest were dragged into Income Tax just at just over £6k - with their Council Tax going up in England an average105% as real earning fell from 2008.

Under the Conservative administration, the CGT rate is twice that Labour left in 2010 to big investors, several million of the poorest will be dragged out of income tax altogether as their allowance nearly doubles - while trying to freeze their Council Tax and raise the Minimum Wage into a growing economy, not the private sector slump in 2010.

Now tell me again, who had the poorest in society as their priority?

It is such a shame that the internet is used to write ill-informed ideological rollocks, rather than to seek the facts. IMNSHO.

Isitme- you mean seek the facts with a surgical precision to forward a rabid agenda? Perhaps for every fact you plaster over posts, academics could be procured who would agree with each and every one of them. But at the same time academics could be procured who would poor scorn on them. Your facts could be debated by legions of economic and political experts and they would never reach a consensus.

Numbers and statistics don't matter to most people. Food banks do. In ability to heat homes do. Children with no clothes without holes in do. Zero hour contracts do. University fees do. Crumbling social safeguards that protect children do. Libraries turned into car parks do. Employees only willing to take people on part time in order to avoid paying pensions do. People dying because they have been told they are fit for work when they are not do. I really, really could go on and on and on and on.

As I'm sure you could with your cut and paste brow beating. You should get a job putting up billboards. You seem to have a fetish for filling up space with stuff that people instinctively disregard as soon as they glimpse it. You really have as dim a view of us plebs as the Tories if you think your carpet saturation furthers your agenda.

This thread is incredible - the vacuum would be filled by the poor who would 'be grateful' because they remember their poverty?

What about the education of all these poor people - are they going to be the best of the best? Do they know the stress and hours involved in being a director or senior manager for a top white-collar business?

All the best paid suck up a lot in VAT too, you know - they can just dilute it more. I can't believe people think that as well as paying what amounts to wages for those on benefits, we should also be subsidising their consumer purchases. People have no fucking idea what it's like having a high-powered (and paid) job; I think they imagine these people are all getting mega bonuses for betting banks' money, like the headline grabbing brokers, but in reality lots of people have to put in lots of effort to get to the top positions. I expect the old boys' network does help a few, but my DH and thousands like him have got where they are by working bloody hard. No one will want to go for those top positions if they aren't seeing payback for their sacrifices, such as never being home when their children are awake, and then critical parts of the structure of employment will go and big businesses won't be able to stay here.

wannabe - you are right too though. The things you mention are awful, I just really do think that perpetually taxing the wealthy is not always the answer. Even looking prosaically at the fact that people able to support their family on one wage free up a partner who can volunteer in things that help communities. I am involved in lots and there are lots more things that run where I live that couldn't, if people did not have time to invest. Honestly, if my DH was taxed more I think he would give up and say what's the point? He is habitually out of the house 14 hours a day. He checks emails and trouble shoots when we are on holiday; he often does a few hours at home in the week and at the weekend. He struggles to sleep. He physically couldn't do that for a normal working life of, say, 40-50 years; he does this because he knows he is compensated for it and will be able to stop earlier.

Sorry if I'm being simple minded, but that is our reality.