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Is a Zero personal income tax system possible?

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Ribenapigeon
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PostPosted: 09:54 - 15 Jun 2019    Post subject: Is a Zero personal income tax system possible? Reply with quote

Given wealth is ultimately produced by business activity, could a government simple raise all its tax revenues from corporation tax, VAT and duties?

It might be a stupid question but it occured to me after thinking how the tories always try to buy votes through promising income tax breaks. So I wondered why not remove the possibility by giving up on personal income tax completly.
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Im-a-Ridah
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PostPosted: 10:25 - 15 Jun 2019    Post subject: Re: Is a Zero personal income tax system possible? Reply with quote

Ribenapigeon wrote:
Given wealth is ultimately produced by business activity, could a government simple raise all its tax revenues from corporation tax, VAT and duties?

It might be a stupid question but it occured to me after thinking how the tories always try to buy votes through promising income tax breaks. So I wondered why not remove the possibility by giving up on personal income tax completly.


Yes, but there are two main issues:

1) Your proposal mainly benefits those already rich. They can grow their wealth through investment and pass it on, all completely tax free. Those without wealth would have to earn it in business so the gap between rich and poor would grow extremely fast. VAT would hit 100% of the wealth of the poor, but much less of the wealth of the rich.

2) Business taxation is competitive. Under your proposal Britain would have the worlds highest business taxation by a long way, so businesses would move outside the UK.

Britain's problem isn't so much that the taxes are too high, but that the economy just isn't growing fast enough, yet everything is still getting more expensive. As I've pointed out previously on here the tuition fee debt and house prices are a big problem because they make millennials and younger less economically active because they don't have enough disposable income. At the minute we are still overly dependent on the boomers for economic growth.
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Jewlio Rides Again LLB
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PostPosted: 13:52 - 15 Jun 2019    Post subject: Reply with quote

Simplify the tax system again so there's less wiggle room for businesses and the self employed to take the piss, tiered income tax rates like now, and put the VAT back down to 17.5.
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Ste
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PostPosted: 13:55 - 15 Jun 2019    Post subject: Re: Is a Zero personal income tax system possible? Reply with quote

Ribenapigeon wrote:
always try to buy votes through promising

They all make promises in an attempt to buy votes and in turn people vote for whichever party they think will make their life better.

Everyone is selfish. Laughing
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Easy-X
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PostPosted: 14:32 - 15 Jun 2019    Post subject: Reply with quote

It's arguable that we would see more benefit by doing away with Corporation Tax entirely.

The simplest system would just be to tax goods and services (VAT & Duty) as everyone needs to eat! However, this would lead to people just accumulating wealth and doing nothing with it. So... let's tax savings! Okay, but then you have to massively hit people moving money in and out of the country. We've seen this with the likes off Apple and Google having large piles of cash outside the US. And so we start down the path...

Basically any system of taxation can be simple in isolation but as so many governments have wildly different ideas about how to go about stealing money raising taxes it's very easy for powerful corporations and individuals to shop around and take advantage of the best deals.
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Nobby the Bastard
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PostPosted: 15:27 - 15 Jun 2019    Post subject: Reply with quote

Interest on savings is already taxed.
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Nobby the Bastard
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PostPosted: 16:54 - 15 Jun 2019    Post subject: Reply with quote

mpd72 wrote:
Nobby the Bastard wrote:
Interest on savings is already taxed.


Very few will pay tax on savings interest now. A basic rate tax payer can earn up to £1000 a year in interest tax free.

That's over £60,000 of savings at the best rate for easy access savings.


Depends on the account. All potentially taxable interest is declared to hmrc.
(i know, I used to chase benefit claimants for undeclared savings based on the interest banks notified to hmrc...)
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Im-a-Ridah
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PostPosted: 02:13 - 18 Jun 2019    Post subject: Reply with quote

Nobby the Bastard wrote:

Depends on the account. All potentially taxable interest is declared to hmrc.
(i know, I used to chase benefit claimants for undeclared savings based on the interest banks notified to hmrc...)


Benefits claimants with 60k in the bank? Bet thats a short list Laughing

mpd72 wrote:
Nobby the Bastard wrote:
Interest on savings is already taxed.


Very few will pay tax on savings interest now. A basic rate tax payer can earn up to £1000 a year in interest tax free.

That's over £60,000 of savings at the best rate for easy access savings.


Which is a good thing as it reduces the burden on the state.
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Jewlio Rides Again LLB
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PostPosted: 07:43 - 18 Jun 2019    Post subject: Reply with quote

Im-a-Ridah wrote:
Nobby the Bastard wrote:

Depends on the account. All potentially taxable interest is declared to hmrc.
(i know, I used to chase benefit claimants for undeclared savings based on the interest banks notified to hmrc...)


Benefits claimants with 60k in the bank? Bet thats a short list Laughing

mpd72 wrote:
Nobby the Bastard wrote:
Interest on savings is already taxed.


Very few will pay tax on savings interest now. A basic rate tax payer can earn up to £1000 a year in interest tax free.

That's over £60,000 of savings at the best rate for easy access savings.


Which is a good thing as it reduces the burden on the state.


Except the savings threshold is a lot lower when it starts to affect benefits.
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doggone
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PostPosted: 20:04 - 06 May 2021    Post subject: Reply with quote

In other news.
https://www.cityam.com/taxman-chasing-gary-lineker-for-5m-over-ir35-dispute/

Laughing
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Nobby the Bastard
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PostPosted: 20:26 - 06 May 2021    Post subject: Reply with quote

And the last time they dragged a TV presenter into court over ir35 they lost.
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Fat Angry Scotsman
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PostPosted: 11:28 - 07 May 2021    Post subject: Re: Is a Zero personal income tax system possible? Reply with quote

Ribenapigeon wrote:
Given wealth is ultimately produced by business activity, could a government simple raise all its tax revenues from corporation tax, VAT and duties?

It might be a stupid question but it occured to me after thinking how the tories always try to buy votes through promising income tax breaks. So I wondered why not remove the possibility by giving up on personal income tax completly.


Personally I am gutted at the amount of income tax I pay. I understand that society needs to pay for services through the levying of taxes but I am still kind of gutted to see the money I earned evaporate away Crying or Very sad
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Ribenapigeon
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PostPosted: 12:16 - 07 May 2021    Post subject: Re: Is a Zero personal income tax system possible? Reply with quote

Fat Angry Scotsman wrote:


Personally I am gutted at the amount of income tax I pay. I understand that society needs to pay for services through the levying of taxes but I am still kind of gutted to see the money I earned evaporate away Crying or Very sad


You have to console yourself with the fact you have an income in the first place and something like a democraticly elected government that collects the tax. Contrast that with the US which promotes itself as a low income tax society but hides the fact that US employers remunerate employees with a smaller proportion of the wealth their labour creates than employers in other western democracies. Effectively taxing the employee before the state gets to levy an income tax.
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Fat Angry Scotsman
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PostPosted: 13:53 - 07 May 2021    Post subject: Re: Is a Zero personal income tax system possible? Reply with quote

Ribenapigeon wrote:
Fat Angry Scotsman wrote:


Personally I am gutted at the amount of income tax I pay. I understand that society needs to pay for services through the levying of taxes but I am still kind of gutted to see the money I earned evaporate away Crying or Very sad


You have to console yourself with the fact you have an income in the first place and something like a democraticly elected government that collects the tax. Contrast that with the US which promotes itself as a low income tax society but hides the fact that US employers remunerate employees with a smaller proportion of the wealth their labour creates than employers in other western democracies. Effectively taxing the employee before the state gets to levy an income tax.


I am not so sure that holds across the board because recently I saw an opening in an equivalent job to what I am doing now and the salary posted was significantly higher than what I earn in the UK (when converting the USD salary to GBP). If it wasn't for the fact I am a shareholder and Director of my current company, I would have considered applying (and taking a punt that the American company would sponsor me on an H-1B visa).
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Ribenapigeon
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PostPosted: 14:06 - 07 May 2021    Post subject: Re: Is a Zero personal income tax system possible? Reply with quote

Fat Angry Scotsman wrote:


I am not so sure that holds across the board because recently I saw an opening in an equivalent job to what I am doing now and the salary posted was significantly higher than what I earn in the UK (when converting the USD salary to GBP). If it wasn't for the fact I am a shareholder and Director of my current company, I would have considered applying (and taking a punt that the American company would sponsor me on an H-1B visa).


What I'm relating to is this https://www.epi.org/productivity-pay-gap/

It's easy to find an exception but my point is that at least income tax deduction is an honest one compared to the US where for most workers on balance they're getting a pretty poor deal. It's like to he old saying about death and taxes.
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Fat Angry Scotsman
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PostPosted: 14:18 - 07 May 2021    Post subject: Re: Is a Zero personal income tax system possible? Reply with quote

Ribenapigeon wrote:
What I'm relating to is this https://www.epi.org/productivity-pay-gap/

It's easy to find an exception but my point is that at least income tax deduction is an honest one compared to the US where for most workers on balance they're getting a pretty poor deal. It's like to he old saying about death and taxes.


Fair enough, just finished reading the article it was actually pretty insightful.
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Ribenapigeon
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PostPosted: 14:31 - 07 May 2021    Post subject: Reply with quote

I think it blows open the myth of the US as some great bastion of free market capitalism. Wall St rules like some kind of Financial Politburo dictating to the masses while looking after a privileged elite.
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Easy-X
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PostPosted: 15:06 - 07 May 2021    Post subject: Reply with quote

There's always a moan up somewhere in the UK about long hours in a particular profession. Last time I think it was junior sales people at a big corporate.

Anyhoo, from what I can tell instead of being occasional that work ethic is endemic in the US. Every drop of productivity is wrung out of the American worker. For example the statutory holiday we all take for granted is a mythical beast across the water and unions are like unto Unicorns Shocked

But with regards to Lineker and IR35 I'm a bit conflicted. On the one hand the "standard" is so poorly laid out you couldn't even get a Revenue Man to explain it but then again... it's Gary Lineker, fuck 'im. Bit like watching a France vs Italy game: I'm not supporting either side but it would be nice to see someone get stretched off Twisted Evil
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Nobby the Bastard
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PostPosted: 16:17 - 07 May 2021    Post subject: Reply with quote

IR35 is relatively simple to understand.

If the contract with your personal services indicate a particular person has to do the work and the times are stunner the contract then you are a disguised employee and should be on paye.
There are other factors involved but those are the main ones.
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Nobby the Bastard
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PostPosted: 18:03 - 07 May 2021    Post subject: Reply with quote

Jmoan wrote:
Lineker should disappear and a new line of soylent green flavoured walkers crisps should be released.

Jewlio Rides Again LLB wrote:

Except the savings threshold is a lot lower when it starts to affect benefits.


About 6 to 12K IIRC which is a kick in the nuts for sensible people and a benefit to those pissing there money away on foreign holidays and tat.


3k for working age and then you lose a quid benefit for every 250 held. 8k max and benefit ceases

Pension age it's £6k and 500. I think 16k for the ceasing of benefit.
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Ste
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PostPosted: 19:08 - 07 May 2021    Post subject: Reply with quote

Universal Credit
If you or your partner have £6,000 or less in savings this will not affect your claim for these benefits.

If you and/or your partner have £16,000 or more in savings, you will not be entitled to Universal Credit.

If you and/or your partner have any savings or capital of between £6,000 and £16,000, the first £6,000 is ignored.

The rest is treated as if it gives you a monthly income of £4.35 for each £250, or part of £250.
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