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How much Tax should the rich pay ?   [Copy link] 中文

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Post time 2012-11-10 05:56:28 |Display all floors
How much tax should the rich pay?

By johnredwood | Published: September 24, 2012

The top 1% of income earners in the Uk pay 28% of the total income tax take. As they earn 13% of all the income, that means they pay twice as big a share of the tax as their share of the income.

The bottom half of all earners in the UK pay 10% of the total income tax. The sum they pay in total is less than the amount paid out in Housing Benefit, which goes to this wide group of people.

You could say this is a very “progressive system”. the bottom half paying less than the benefits they receive back, whilst the top 1% pay twice their share of the income.

However, at a time of economic difficulty, when the government wishes to spend so much more than it is currently collecting in revenue, there are many cries to tax the rich more. To do this successfully you need to have a tax system which attracts more very rich people here, and which tempts rich people to invest, venture and spend in ways which trigger more tax revenue from them.

The higher rates introduced by the outgoing Labour and incoming Coalition governments have led to a predictable continuing drop in revenues. Taxes on wealth and income yielded 3.5% less to August 2012 than the same period the previous year.

The USA has lower tax rates on the very rich than the UK. Top rate federal income tax is 35%, compared to 50% (plus 2% NI) here. State income tax varies from 0% to 11%. Allowing an average of around 5% means the US top tax rate is more than 10% lower than the UK one.

Despite this- or more likely because of it – the US top 1% earn 17% of all the income. More importantly , they pay 37% of all the Income Tax paid. So with lower tax rates the USA achieves the goal of getting the rich to pay much more. It also has more seriously rich people, which some will dislike and others will see as helpful to pay all that extra tax. In the US the rich pay more than twice their incoem level. They make an overall bigger contribution than in the UK.

My advice to Mr Clegg is simple. By all means aim to get more money off the rich. The way to do it is to set rates that they will stay to pay. Get the right tax rates and more will come to pay.

By all means get the tax burden down on those on middle incomes as well. We are all overtaxed. That is one of the reasons the eocnomy is not performing as well as we would like.

Your own mind is a sacred enclosure into which nothing harmful can enter except by your permission. Arnold Bennett

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Post time 2012-11-10 09:14:24 |Display all floors
Statistics can be very misleading, George.

But I ask you this....... If the rich are paying such a high proportion of their income in tax, how come they are getting richer, and the poor getting poorer?

Furthermore, I suspect that those statistics only refer to taxable earnings. If the total earnings of the rich were to be considered, then their tax contribution would appear minuscule.

The poor spend a higher proportion of their income than the rich just to survive. So when you consider all the taxes, direct and indirect, paid by the poor, you will arrive at a different figure.

Things are not as black and white, as clever politicians would have you believe.
The world needs more idiots like me, all the others think they are clever.

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Post time 2012-11-10 10:43:19 |Display all floors
one thing I can never work out is when they do "Free trade agreemnets' is that they never come to an agreement on tax levels to stop companies from shopping around internationally for lower taxes.
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Post time 2012-11-10 13:25:23 |Display all floors
laincoubert Post time: 2012-11-10 10:43
one thing I can never work out is when they do "Free trade agreemnets' is that they never come to an ...

Tax payments by the rich are voluntary....... and should be viewed as charitable contributions.

At least........ that is how he author of the article sees it.
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Post time 2012-11-10 13:33:13 |Display all floors
seneca Post time: 2012-11-10 12:35
What an aphorism of truthfulness!

By the same token then the "1% versus the 99%" stats so readily ...

Communists do not have the option of not paying taxes you..... bone head....taxes are collected at source. It is only the business elite, and Barons of questionable repute who have that option...
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Post time 2012-11-10 13:50:24 |Display all floors
TheHermit Post time: 2012-11-10 09:14
Statistics can be very misleading, George.

But I ask you this....... If the rich are paying such a  ...

Redwood isn't somebody i like particularly, he's on the right in the Tory party. But he has a decent brain and his arguments are usually very sound, he's certainly right to say that scaring the rich off to somewhere else isnt a good idea because their spending is then taken out of the local economy

Its NOT true to say the rich pay miniscule Taxes, we know this from Treasury figures.

Its the ' offshoring ' they need to go after, some businesses do this as well to escape duty.
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Post time 2012-11-10 13:54:04 |Display all floors
TheHermit Post time: 2012-11-10 09:14
Statistics can be very misleading, George.

But I ask you this....... If the rich are paying such a  ...

how come they are getting richer, and the poor getting poorer?

Its simple enough-they've been paying themselves too much at the top end for years thereby increasing the differentials.

At the bottom most people arn't even keeping up with inflation.
Your own mind is a sacred enclosure into which nothing harmful can enter except by your permission. Arnold Bennett

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