Did we all vote UKIP today

[pap]

Some interesting views here.

 

It is rather sad that UKIP are the only political party really grasping the EU nettle. Don't get me wrong; it's good that someone is - but the party attracts more than its fair share of nutjobs, which is a bit of a shame. What is telling is that no major political party seems interested when able to do something about it.

 

I've heard Conservatives asked a few times whether they'd call an in/out referendum prior to the election. Their excuse? Our coalition partners would never go for it. Would these be the same coalition partners that took both parties to task over the political sleight-of-hand over referenda during the EU Constitution/Lisbon Treaty debacle? Why yes they most certainly would.

[Wes Tender]

We don't know whether UKIP's policies would lead to "economic disaster". We do know that Labour's and now the other 2's have done so.

 

What is so ludicrous about a flat tax? Surely a % is a %. If you earn more, you will pay more. Why should someone on 100k have to pay a higher % than someone on 30K? What is "fair" about that? Tax policy should be designed to bring the most money in, not punish people for earning more. As the Thatcher Government showed, you can lower taxes for the higher paid and generate more money into the revenue.

 

They would merge tax and NI and also take the lowest paid out of tax altogether.

 

You can see this. I can see this. Joensuu encapsulates in into his pithy little phrase beloved of the left, that it is robbing the poor to pay the rich. Fairness doesn't come into it.

[Joensuu]

The irony here is delicious. You accuse me of ducking and diving as your response to my request that you accept that everything you have posted is based purely on conjecture. And your position is illustrated by examples of how competitive pencil sharpeners would be if a trade tariff were to be added to them? LOL.

Irony can be a beautiful beast eh. I suggest the policy might not hold up to scrutany, and provide examples of flaws I can see; you 'defend' by dodging the points; I point this out to you; you (with examples); and you of course provide something tangible to back up your claims? Er, nope, you instead try to use comedy and attack the type of my arbitary selection of retail commodity.

 

I have to admit, it is a successful debating style, used to great effect by such notables as Boris. Duck the tough questions with soundbytes and oblique attacks to force your opponent to defend themselves on all manner of peculiar side issues, rather than let them challenge you on the issue at hand.

Why should anybody draw any sensible conclusions on the outcome of us leaving the EU or renegotiating a trade only membership from this thread?

Good point, they shouldn't. Feel it's important to allow the 'boring, but accurate' side of the debate to get a hearing though - it so often gets overlooked by the red top papers shouting out their disgust.

I'm sure that before we or our European partners decide on anything, they will look at the opinions on this forum as compulsory reading before they accept that the outcome would be disasterous. And they should also bear in mind that any decision taken by the electorate in a referendum is fundamentally flawed to begin with and can be ignored on the basis that the electorate are basically a bit thick and don't have the expertise to make a sensible judgement.

 

Okay, let's give you another tenuous example. Mr Tender is in a hospital being diagnosed; he can chose whether he would like to have him sympoms analysised by a team of experts; or throw it out the the public to see what they democratically think would be the best course for him. Who would you trust to give you the best chance of survival - the specialists; or the general public.

 

Enjoy your homopathic treatment Wes.

[Joensuu]

You can see this. I can see this. Joensuu encapsulates in into his pithy little phrase beloved of the left, that it is robbing the poor to pay the rich. Fairness doesn't come into it.

 

5% tax rise for anyone earning less than £40k pa.

 

Who's in?

 

Of course it's for their own good isn't it - they should look up to those who earn more money and aspire eh? All sound's very Victorian.

 

In what way is a tax rise for people on less than £40k pa, coupled with a tax cut for anyone over £40k pa not taking from "the poor to pay the rich"?

 

As you quite rightly say "Fairness doesn't come into it"

[Wes Tender]

German exports to UK 6.4% of c. £1000bn pa = c. £64bn pa. UK exports to Germany c. £30bn pa.

 

So, yes, if Germany acted idependenty of the EU the impact on them would exceed the impact on us.

 

A couple of points:

 

1) I am not suggesting Germany would act independent of the EU - the union would act as a whole.

2) The above numbers assume that trade would continue at the current levels - changing import duty would change the amount of trade conducted. It's impossible to substantiate, but I honestly believe the UK would have more requirement to continue importing from Germany than Germany would from the UK.

 

Also see my response to goneawol above.

 

 

 

Put yourself in Merkel's shoes. The UK have just caused you a massive problem. Germany has invested in the EU up to the hilt; and now someone has to make up the shortfall. How do you react? Denmark, say, are threatening similar - do you roll over and face the wrath of your angry voters, or send a message to the UK and others that you won't be messed with?

 

I can't see a way that any German leader could possibly let us walk without some form of reprecussions. Their voters simply wouldn't stand for it.

 

Can you see anything else that a German leader could sensibly do?

 

I'm pretty sure that equally the German workers who are involved in manufacturing those products which we import from them will be very careful about hoping that their Government doesn't slap trade tariffs on our exports to them, encouraging us to reciprocate by slapping trade tariffs on their goods, thus making them less competitive against products from their rivals in the Pacific rim and the USA, etc.

 

We will want to contiue trading with them, and they with us. A compromise arrangement will be found to the mutual benefit of all. This talk about reprisals and retribution, disgruntled voters in the EU not accepting things, is all conjecture. Every country in the EU looks first at their own national interests rather than at the EU as a whole.

[pedg]

I'm pretty sure that equally the German workers who are involved in manufacturing those products which we import from them will be very careful about hoping that their Government doesn't slap trade tariffs on our exports to them, encouraging us to reciprocate by slapping trade tariffs on their goods, thus making them less competitive against products from their rivals in the Pacific rim and the USA, etc.

 

We will want to contiue trading with them, and they with us. A compromise arrangement will be found to the mutual benefit of all. This talk about reprisals and retribution, disgruntled voters in the EU not accepting things, is all conjecture. Every country in the EU looks first at their own national interests rather than at the EU as a whole.

 

Notice any coincidence in the highlighted bits?

[Wes Tender]

5% tax rise for anyone earning less than £40k pa.

 

Who's in?

 

Of course it's for their own good isn't it - they should look up to those who earn more money and aspire eh? All sound's very Victorian.

 

In what way is a tax rise for people on less than £40k pa, coupled with a tax cut for anyone over £40k pa not taking from "the poor to pay the rich"?

 

As you quite rightly say "Fairness doesn't come into it"

 

Firstly as pointed out before, it is a proposal from an individual, not their party policy.

Secondly it suggested that income tax and National Insurance payments be combined.

Thirdly it was proposed that the threshold beyond which people started paying tax be set at a level that precluded the poor.

 

And yes, your rent a quote left wing language of robbing the poor to pay the rich is inflamatory and wrong.

 

Define poor.

[Joensuu]

We don't know whether UKIP's policies would lead to "economic disaster". We do know that Labour's and now the other 2's have done so.

Partially agree. Labour overspent, when if they were following Keynes (as the claim to) they would have been saving for the rain days. The Tories haven't been very effective - they are cutting enough to receive the public flack, and enough to kill growth; but not enough to actually be austere. They have IMO both done bad jobs.

 

UKIP's proposal on tax would take much of the spare income away from the lower and middle paid. The wealthy would have more liquid cash; but I'm sure you'll agree, the wealthy you are the more you save, while convesly the poorer you are the more you need to spend (as a proportion of your income). In other words, if the wealthier have more of the liquid capital, how many shops will stuggle to survive as spending is reduced? I'd suggest the extra tax UKIP propose might leave our high streets even less varied (supermarkets + pawn brokers). How do you think that might effect the economy? If shops are closing, will employment stay flat?

 

What is so ludicrous about a flat tax? Surely a % is a %. If you earn more, you will pay more. Why should someone on 100k have to pay a higher % than someone on 30K? What is "fair" about that? Tax policy should be designed to bring the most money in, not punish people for earning more. As the Thatcher Government showed, you can lower taxes for the higher paid and generate more money into the revenue.

 

They would merge tax and NI and also take the lowest paid out of tax altogether.

 

I agree that the lowest paid should be taken out of tax altogether. If nothing else it would make working vs benefits fare more economically viable.

 

Flat taxes are used to great effect to kick start small or relatively young economies. Often, once kick-started, countries add additonal tiers to their tax system, normally because the divide between rich and poor has escalated (c.f. Iceland; Slovakia; Czech Republic).

 

The problem with flat taxes is really quite simple. Set the bar too high and the least wealthy suffer; set it too high and govenment revenues collapse.

 

UKIP's proposed 25% would be one of the highest flat tax rates in the world. In the UK c. 25million of our 30 million workforce would see a tax rise; only around 4 million of the top paid would see a tax cut. UKIP might argue that doing this will encourage people to innovate more; opponents will argue that the majority will have to work longer hours (if they can), or accept a drop in income.

 

So would more entrepreneurs spawned if we make life tougher for the least wealthy? Surely if there are less people walking around with disposable cash lining their pockets, who are these entrepreneurs going to sell to? (the EU? cough?)

[Joensuu]

I'm pretty sure that equally the German workers who are involved in manufacturing those products which we import from them will be very careful about hoping that their Government doesn't slap trade tariffs on our exports to them, encouraging us to reciprocate by slapping trade tariffs on their goods, thus making them less competitive against products from their rivals in the Pacific rim and the USA, etc.

 

We will want to contiue trading with them, and they with us. A compromise arrangement will be found to the mutual benefit of all. This talk about reprisals and retribution, disgruntled voters in the EU not accepting things, is all conjecture. Every country in the EU looks first at their own national interests rather than at the EU as a whole.

 

Fair enough. I hope that in the eventuality that we leave the EU the German workers are indeed as benevolvent as you think they will be. They of course won't see it as those troublesome Brits trying to have their cake (German) and eat it will they? I'm sure their press will be urging restraint and good will to the Brits. I'm sure no citizen of mainland Europe would be even slightly miffed at Blighty whatsoever. If the shoe were on the other foot, I'm sure the Sun and Mail would be full of praise for whichever country had acted in their own self-interest and cost us a truckload wouldn't they?

[Joensuu]

Firstly as pointed out before, it is a proposal from an individual, not their party policy.

Of course it is, that's why the proposal is in the UKIP policy section. As covered previously, UKIP know that they can't actually make this offical policy at it wouldn't stand up to scrutiny; but leaving it hanging in there with the policies will win them a few votes with the super wealthy.

 

Secondly it suggested that income tax and National Insurance payments be combined.

Interesting aside this one - which I don't think we've covered on here much. I know National Insurance is a fudge - it's just Income Tax by stealth. But when polled, our voters have a far more positive view of National Insurance than they do of Income Tax - hense why parties of all political persuasion have retained it. Genuinely don't know why UKIP want to scrap it - any ideas why?

 

Thirdly it was proposed that the threshold beyond which people started paying tax be set at a level that precluded the poor.

Right okay (did it mention what this theshold would be set at?).

 

And yes, your rent a quote left wing language of robbing the poor to pay the rich is inflamatory and wrong.

Fair enough, could you provide me with an accurate alternative? Who is paying more to fund the tax cut for the richest?

 

Also, in the context of your above statement - please justifty how I'm wrong?

 

Define poor.

 

Relative term - I'm not going to bore you with the offical definitions (happy to if you insist).

 

In the context of this debate - UKIP's 'proposal' is it raise the basic rate of tax to 25%, while simultausly scrapping higher rates of tax. So for 'poor' you could more accurately read, anyone earning less than c. £40k pa. I guess I should have more accurately said tax cut for the c. 4million wealthiest; funded by a tax rise for the 25million least wealthy workers. Would that be fair enough?

[View From The Top]

You can see this. I can see this. Joensuu encapsulates in into his pithy little phrase beloved of the left, that it is robbing the poor to pay the rich. Fairness doesn't come into it.

 

So it'a fair for someone who is earning £30k to pay 5% more whilst someone earning £100k pays 10% less?

 

Yep, real fair that. Won't hit the poorest and families the hardest but hey, it's "fair" to the folk earning big ££.

[Wes Tender]

UKIP's proposed 25% would be one of the highest flat tax rates in the world. In the UK c. 25million of our 30 million workforce would see a tax rise; only around 4 million of the top paid would see a tax cut. UKIP might argue that doing this will encourage people to innovate more; opponents will argue that the majority will have to work longer hours (if they can), or accept a drop in income.

 

I will just quote this part of the UKIP proposals by Godfrey Bloom to demonstrate that the flat rate tax includes Income Tax, NI contribution and corporate tax.

 

Therefore all of your comparisons with the tax rates of other developed countries is totally spurious, unless of course you are going to include their equivalents of NI in their rates too. Do try and read things a bit more carefully and objectively before spouting forth.

 

A standard, or flat, rate could then be applied.

Since the resulting tax would replace employees’ income tax, NI (still unrepealed) and

corporate tax, the effect would be raise output; make work more attractive than

unemployment; and reduce dependency of individuals and businesses on the state. We

could safely anticipate a steady fall in taxation as a proportion of GDP, together with a

corresponding increase in taxation as an amount.

[solentstars]

i can,t believe anyone thinks that ukip are going to be they next government,it will not happen it mainly a protest vote for a lot of people.its bad news for the conservatives has it splits the right of the party supporters hard core who are drifting of to ukip which will be no big loss in the long term.it will mean that labour or liberals winning seats has the conservative vote splits.it happened in the 80s to the left.i hope the economy recovers allowing the coalition a second term has i believe they have done a good job under the circumstances they inherited.

[Verbal]

If you are low-paid, earning say £15,000, your net income (after tax and NI) is presently £13,019.

 

Apply UKIP's flat rate 25% all-in and that falls to £11,250

 

If you are relatively well paid, earning, say, £70,000, your net income is presently £47,564

 

Apply UKIP's flat rate and your net income rises to £52,500.

 

The gap widens the more income you make. In other words, UKIP's "proposal" is for a massive redistribution of wealth from the poor to the rich.

[Joensuu]

I will just quote this part of the UKIP proposals by Godfrey Bloom to demonstrate that the flat rate tax includes Income Tax, NI contribution and corporate tax.

 

Therefore all of your comparisons with the tax rates of other developed countries is totally spurious, unless of course you are going to include their equivalents of NI in their rates too. Do try and read things a bit more carefully and objectively before spouting forth.

 

Right, so UKIP are genuninely proposing a tax cut for all then? Sounds amazing. Everyone's a winner eh?

 

So who pays for this?

 

[NB, last time I challenged you with that, you suggested savings made from not being a member of the EU; which I've argued would be a loss at best. Of course I predict you'll suggested that the 20bn 'saved' will be enough to fund a tax break for all without considering the impact on the economy of leaving the EU. For sake of arguement lets go with the increadibly optimistic £20billion saved (without any knock on issues or losses scenario). If so, as Income tax levies are going down (funded by the £20billion saved from the EU), where does the money to ramp up spending on defence come from?]

[Lord Duckhunter]

So it'a fair for someone who is earning £30k to pay 5% more whilst someone earning £100k pays 10% less?

 

Yep, real fair that. Won't hit the poorest and families the hardest but hey, it's "fair" to the folk earning big ££.

 

 

Sorry I'm totally confused with your argument.

 

Clearly someone earning 100k paying less of a % out of their earnings than someone someone earning 30K is clearly unfair.

 

Surely the "fairest" method is for everybody to pay the same %.

 

Would you think it fair that the wealthy pay more duty on their pint of beer, or pay VAT at 25%. Perhaps we could have a two tier petrol pump system, those with big cars could top up at more expensive pumps. It's clearly not fair that Harry Redknapp fills up at the same petrol station as me and pays the same price as me. He's a millionaire for gods sake, why should I pay the same duty as him?

[View From The Top]

Sorry I'm totally confused with your argument.

 

Clearly someone earning 100k paying less of a % out of their earnings than someone someone earning 30K is clearly unfair.

 

Surely the "fairest" method is for everybody to pay the same %.

 

 

To tories perhaps, but not to me.

 

To offer big tax cuts to the wealthy whilst upping the % take from Joe Average is morally wrong IMHO but as you're a tory, you'll not understand that.

[Lord Duckhunter]

To tories perhaps, but not to me.

 

To offer big tax cuts to the wealthy whilst upping the % take from Joe Average is morally wrong IMHO but as you're a tory, you'll not understand that.

 

Number 1, I'm not a Tory.

 

And number 2, I've never written anywhere that I support this policy. I was merely pointing out that the "fairest" system is for everybody to pay exactly the same % of their wages. It seems that some people's definition of fair is slightly different than mine. I understand fair to be "the same for everyone".

[JN9]

Number 1, I'm not a Tory.

 

And number 2, I've never written anywhere that I support this policy. I was merely pointing out that the "fairest" system is for everybody to pay exactly the same % of their wages. It seems that some people's definition of fair is slightly different than mine. I understand fair to be "the same for everyone".

 

I would consider "fair" to be more along the lines of "Everyone benifits equally"... I might be wrong (I probably am), but a flat rate tax would not be "fair" (at least not from my definition)

[Minty]

And number 2, I've never written anywhere that I support this policy. I was merely pointing out that the "fairest" system is for everybody to pay exactly the same % of their wages. It seems that some people's definition of fair is slightly different than mine. I understand fair to be "the same for everyone".

 

I would consider "fair" to be more along the lines of "Everyone benifits equally"... I might be wrong (I probably am), but a flat rate tax would not be "fair" (at least not from my definition)

 

So, now we come to the crux of the matter IMO... and it's all based on the starting point.

 

If setting up a tax rate from scratch, I broadly agree that a flat-rate tax would be fair. Everyone pays the same % of their earnings.

 

But many people view it from a relative position, i.e. to move to a flat-rate tax from the current tiered system, some will have to pay more, some will pay less. These people don't necessarily view the flat-rate tax itself as being unfair, but the CHANGE from current tiered tax levels to proposed flat-rate tax to be unfair.

 

A key distinction, and I kind of agree with both sides as a result. I think a flat-rate tax would broadly be fair, *if* starting from scratch, but having had different tiers for so many years, it would be nigh on impossible to move to it now IMO, and clearly it would be perceived as moving money from those earning less to those earning more, because that will be the net effect.

Edited 7 May, 2013 by Minty

[JN9]

So, now we come to the crux of the matter IMO... and it's all based on the starting point.

 

If setting up a tax rate from scratch, I broadly agree that a flat-rate tax would be fair. Everyone pays the same % of their earnings.

 

But many people view it from a relative position, i.e. to move to a flat-rate tax from the current tiered system, some will have to pay more, some will pay less. These people don't necessarily view the flat-rate tax itself as being unfair, but the CHANGE from current tiered tax levels to proposed flat-rate tax to be unfair.

 

A key distinction, and I kind of agree with both sides as a result. I think a flat-rate tax would broadly be fair, *if* starting from scratch, but having had different tiers for so many years, it would be nigh on impossible to move to it now IMO, and clearly it would be perceived as moving money from those earning less to those earning more, because that will be the net effect.

 

Thats what I meant... Just not articulate enough to put it into words... Thanks Minty

[Wes Tender]

Right, so UKIP are genuninely proposing a tax cut for all then? Sounds amazing. Everyone's a winner eh?

 

So who pays for this?

 

[NB, last time I challenged you with that, you suggested savings made from not being a member of the EU; which I've argued would be a loss at best. Of course I predict you'll suggested that the 20bn 'saved' will be enough to fund a tax break for all without considering the impact on the economy of leaving the EU. For sake of arguement lets go with the increadibly optimistic £20billion saved (without any knock on issues or losses scenario). If so, as Income tax levies are going down (funded by the £20billion saved from the EU), where does the money to ramp up spending on defence come from?]

 

Look, it's not me making these proposals. But if I recall correctly (I really can't be that bothered to read it again) the proposer of this tax policy said that it could be costed without any cuts in services.

 

Why don't you write to him and ask him how he proposes to do it, rather than asking me?

 

I have no more expertise in these matters than you do.

[anothersaintinsouthsea]

So, now we come to the crux of the matter IMO... and it's all based on the starting point.

 

If setting up a tax rate from scratch, I broadly agree that a flat-rate tax would be fair. Everyone pays the same % of their earnings.

 

But many people view it from a relative position, i.e. to move to a flat-rate tax from the current tiered system, some will have to pay more, some will pay less. These people don't necessarily view the flat-rate tax itself as being unfair, but the CHANGE from current tiered tax levels to proposed flat-rate tax to be unfair.

 

A key distinction, and I kind of agree with both sides as a result. I think a flat-rate tax would broadly be fair, *if* starting from scratch, but having had different tiers for so many years, it would be nigh on impossible to move to it now IMO, and clearly it would be perceived as moving money from those earning less to those earning more, because that will be the net effect.

 

But what about the taxation on people's spending? VAT is largely regressive in nature when related to income. What about the taxation on other earnings e.g. dividends and savings?

 

The system in the Uk almost certainly needs to be made simpler and more transparent but I'm not sure such proposals are as simple or fair as they make out.

[Minty]

But what about the taxation on people's spending? VAT is largely regressive in nature when related to income. What about the taxation on other earnings e.g. dividends and savings?

 

The system in the Uk almost certainly needs to be made simpler and more transparent but I'm not sure such proposals are as simple or fair as they make out.

 

Good point, and I agree entirely. None of these things are ever as simple as anyone would like, and perhaps more importantly, they're rarely as simple as the public ideally *need* them to be, to fully understand the implications of what we're voting for.

 

Anyway, I was just trying to highlight the distinction between what others were saying was fair or not... I try not to get into these threads!

[Lord Duckhunter]

So, now we come to the crux of the matter IMO... and it's all based on the starting point.

 

If setting up a tax rate from scratch, I broadly agree that a flat-rate tax would be fair. Everyone pays the same % of their earnings.

 

But many people view it from a relative position, i.e. to move to a flat-rate tax from the current tiered system, some will have to pay more, some will pay less. These people don't necessarily view the flat-rate tax itself as being unfair, but the CHANGE from current tiered tax levels to proposed flat-rate tax to be unfair.

 

A key distinction, and I kind of agree with both sides as a result. I think a flat-rate tax would broadly be fair, *if* starting from scratch, but having had different tiers for so many years, it would be nigh on impossible to move to it now IMO, and clearly it would be perceived as moving money from those earning less to those earning more, because that will be the net effect.

 

Therefore any movement of the top rate of tax downwards, providing there is no increase in the lower rate, is actually making the tax system fairer.

 

I am a basic rate taxpayer by the way.

[oldskoolsi]

If you are low-paid, earning say £15,000, your net income (after tax and NI) is presently £13,019.

 

Apply UKIP's flat rate 25% all-in and that falls to £11,250

 

If you are relatively well paid, earning, say, £70,000, your net income is presently £47,564

 

Apply UKIP's flat rate and your net income rises to £52,500.

 

The gap widens the more income you make. In other words, UKIP's "proposal" is for a massive redistribution of wealth from the poor to the rich.

 

I'm hoping your stats are right because, ignoring everything else, someone's earing going form 13019 to 11,250 would have a much bigger affect on their quality of life than someone's increasing from 47k to 52k. And that is the basic problem i have with it.

[Wes Tender]

If you are low-paid, earning say £15,000, your net income (after tax and NI) is presently £13,019.

 

Apply UKIP's flat rate 25% all-in and that falls to £11,250

 

If you are relatively well paid, earning, say, £70,000, your net income is presently £47,564

 

Apply UKIP's flat rate and your net income rises to £52,500.

 

The gap widens the more income you make. In other words, UKIP's "proposal" is for a massive redistribution of wealth from the poor to the rich.

 

Pardon me for pointing out what seems to be the obvious flaw in your argument.

 

It takes no account of the threshold below which one doesn't pay any tax at all. I have no idea at what level UKIP propose to place that threshold, but it is possible that the low paid worker of your example pays either no tax at all, or very little.

[trousers]

So, now we come to the crux of the matter IMO... and it's all based on the starting point.

 

If setting up a tax rate from scratch, I broadly agree that a flat-rate tax would be fair. Everyone pays the same % of their earnings.

 

But many people view it from a relative position, i.e. to move to a flat-rate tax from the current tiered system, some will have to pay more, some will pay less. These people don't necessarily view the flat-rate tax itself as being unfair, but the CHANGE from current tiered tax levels to proposed flat-rate tax to be unfair.

 

A key distinction, and I kind of agree with both sides as a result. I think a flat-rate tax would broadly be fair, *if* starting from scratch, but having had different tiers for so many years, it would be nigh on impossible to move to it now IMO, and clearly it would be perceived as moving money from those earning less to those earning more, because that will be the net effect.

 

This.

 

It's human nature to look at "fairness" as a relative measure against something else rather than look at "fairness" as an absolute measure.

 

Another example: some see the current 45p top rate of tax as "unfair" because they are comparing it with the 50p rate that Labour introduced in their last month of office in 2010 whereas others will see it as "fair" because they are comparing it with the 40p rate that Labour stuck with between 1997 and 2010.

 

As the phrase goes.... "It's all relative"

[Verbal]

Pardon me for pointing out what seems to be the obvious flaw in your argument.

 

It takes no account of the threshold below which one doesn't pay any tax at all. I have no idea at what level UKIP propose to place that threshold, but it is possible that the low paid worker of your example pays either no tax at all, or very little.

 

Not a flaw in my argument, Lord T - a flaw in UKIP's back-of-a-fag-packet policy-making.

 

Of course, if you factor in tax allowances, that makes the proposal even more bonkers. Even so, it doesn't alter the simple fact that a flat rate would be a massive redistribution of wealth away from the working poor to the well-off.

[Joensuu]

Good post Minty (as ever).

 

Guess 'fairness' depends upon what people see as the fairer outcome. Is it fairer that everyone is taxed at the same rate, or fairer that those who can afford to contribute more pay extra to support those who can't?

 

Irrespective, when compared to our current tax system, a flat tax would see the richest pay less. As such, either those who are poorer will need to pay more, or the total tax revenue has to be reduced. I can't see people who are already stretched at the bottom or middle of the system being able or willing to pay more, I can only conclude that a flat cap system would result in cuts to public services.

 

Which services do people think we should cut to give the richest their 'fair' extra cash?

 

Anyhow, here's an interesting read for anyone interested: http://www.huffingtonpost.com/mobileweb/dave-johnson/is-a-flat-tax-fair_b_1027601.html

[Verbal]

This.

 

It's human nature to look at "fairness" as a relative measure against something else rather than look at "fairness" as an absolute measure.

 

Another example: some see the current 45p top rate of tax as "unfair" because they are comparing it with the 50p rate that Labour introduced in their last month of office in 2010 whereas others will see it as "fair" because they are comparing it with the 40p rate that Labour stuck with between 1997 and 2010.

 

As the phrase goes.... "It's all relative"

 

You're trivialising this - not looking, or wanting to look, at the underlying reality. One of the reasons employers are able in many cases to pay such low wages is because of the nominally progressive effects of the tax allowance system. Simply abolishing it and replacing everything with a flat rate, as UKIP appears to want to do (although who knows; they're a comedy party) would have one effect beyond all others - to hand a large slice of the poor's income to the well-off.

 

Still what do you expect? This is not a party of protest, but one whose supporters - over 70% longterm Tory voters; over 70% over 50 years old - are intent on doing nothing more than sitting on their hands in a huge harumph until someone comes along who pleases them. It's wonderfully self-defeating, of course. Just as the Republicans were undone by demographics in the US, and will continue to be so as they are forced to over-represent a shrinking, unappealing rump of white, right-wing voters, so the Tories are being pulled in the same direction by the UKIP brain-freeze. After UKIP, Cameron's attempts at modernisation are dead, and a party that hasn't won a general election outright in more than two decades will continue to slide into another iteration of uselessness.

[bridge too far]

You're trivialising this - not looking, or wanting to look, at the underlying reality. One of the reasons employers are able in many cases to pay such low wages is because of the nominally progressive effects of the tax allowance system. Simply abolishing it and replacing everything with a flat rate, as UKIP appears to want to do (although who knows; they're a comedy party) would have one effect beyond all others - to hand a large slice of the poor's income to the well-off.

 

Still what do you expect? This is not a party of protest, but one whose supporters - over 70% longterm Tory voters; over 70% over 50 years old - are intent on doing nothing more than sitting on their hands in a huge harumph until someone comes along who pleases them. It's wonderfully self-defeating, of course. Just as the Republicans were undone by demographics in the US, and will continue to be so as they are forced to over-represent a shrinking, unappealing rump of white, right-wing voters, so the Tories are being pulled in the same direction by the UKIP brain-freeze. After UKIP, Cameron's attempts at modernisation are dead, and a party that hasn't won a general election outright in more than two decades will continue to slide into another iteration of uselessness.

 

As someone far more poetic than me said - "BNP in blazers"

[Wes Tender]

Not a flaw in my argument, Lord T - a flaw in UKIP's back-of-a-fag-packet policy-making.

 

Of course, if you factor in tax allowances, that makes the proposal even more bonkers. Even so, it doesn't alter the simple fact that a flat rate would be a massive redistribution of wealth away from the working poor to the well-off.

 

A flaw in your argument, but you won't admit it.

[Lord Duckhunter]

Good post Minty (as ever).

 

Guess 'fairness' depends upon what people see as the fairer outcome. Is it fairer that everyone is taxed at the same rate, or fairer that those who can afford to contribute more pay extra to support those who can't?

 

Irrespective, when compared to our current tax system, a flat tax would see the richest pay less. As such, either those who are poorer will need to pay more, or the total tax revenue has to be reduced. I can't see people who are already stretched at the bottom or middle of the system being able or willing to pay more, I can only conclude that a flat cap system would result in cuts to public services.

 

 

They will pay extra if they earn more. 25% of 100k is more than 25% of 50k.

 

You seem to have fallen for the Establishments line that reducing the tax rate will reduce the tax take, this is not neccesarily the case. When the Torys came to power in 1979 the top rate of tax was 83% and the lowest rate was 33%. By 1988 it was 40% & 25% yet tax contributions went up.

 

The Establishment set tax rates for political or comestic reasons, when the only thing that matters is which rates generates the most income. If you reduce the top rate to 30% and it brings in more money than a 45% rate surely that's a good thing. Although I'm sure there would be plenty of people like you howling about fairness and how individuals like Harry Redknapp had received a tax break, just like there was when Geoffrey Howe reduced it and Labour cuased the commons to be suspended by kicking up such a fuss.

[Joensuu]

They will pay extra if they earn more. 25% of 100k is more than 25% of 50k.

 

You seem to have fallen for the Establishments line that reducing the tax rate will reduce the tax take, this is not neccesarily the case. When the Torys came to power in 1979 the top rate of tax was 83% and the lowest rate was 33%. By 1988 it was 40% & 25% yet tax contributions went up.

 

The Establishment set tax rates for political or comestic reasons, when the only thing that matters is which rates generates the most income. If you reduce the top rate to 30% and it brings in more money than a 45% rate surely that's a good thing. Although I'm sure there would be plenty of people like you howling about fairness and how individuals like Harry Redknapp had received a tax break, just like there was when Geoffrey Howe reduced it and Labour cuased the commons to be suspended by kicking up such a fuss.

 

No, Lord D, I haven't fallen for any 'lines'. As you well know, when the tax is set far too high (say above 60%) reducing the rate will often see an increase in revenue. However, when the rate is below 50%, the incentive for tax avoiding is that much less, so reducing the rate is unlikely to see an increase in overall revenues, and will almost always lead to a fall in the total revenue.

 

If we were talking about a 70% upper rate as opposed to a 40% one, I'd be inclined to agree with you. We're not, and reducing a 40% rate will see a fall in the overall revenue.

Edited 8 May, 2013 by Joensuu

[Wes Tender]

No, Lord D, I haven't fallen for any 'lines'. As you well know, when the tax is set far too high (say above 60%) reducing the rate will often see an increase in revenue. However, when the rate is below 50%, the incentive for tax avoiding is that much less, so reducing the rate is unlikely to see an increase in overall revenues, and will almost always lead to a fall in the total revenue.

 

If we were talking about a 70% upper rate as opposed to a 40% one, I'd be inclined to agree with you. We're not, and reducing a 40% rate will see a fall in the overall revenue.

 

Show me the figures that prove that below a 40% tax rate, the taxman will receive a fall in revenue.

 

There is another factor not taken into account when tax rates are reduced. Apart from the likelihood that the tax revenue will increase, there is also the fact that those individuals paying less tax will probably spend that additional money in their pockets in the British economy, not only helping all sorts of businesses, service industries and manufacturers, but also increasing VAT revenue too. But I understand that it is a leap of imagination too far for most of the left to make, envisaging this extra expenditure in the economy increasing employment and thus raising additonal tax revenue. It also probably rankles that the expenditure of that extra money in the pockets of the higher earners can be decided by them and not by bureacrats of the Nanny State.

[bridge too far]

Most high earners will save any additional tax gains or invest in e.g. property.

 

Most low earners will use any additional tax gain to buy things e.g. food, clothes

[Lord Duckhunter]

Show me the figures that prove that below a 40% tax rate, the taxman will receive a fall in revenue.

 

There is another factor not taken into account when tax rates are reduced. Apart from the likelihood that the tax revenue will increase, there is also the fact that those individuals paying less tax will probably spend that additional money in their pockets in the British economy, not only helping all sorts of businesses, service industries and manufacturers, but also increasing VAT revenue too. But I understand that it is a leap of imagination too far for most of the left to make, envisaging this extra expenditure in the economy increasing employment and thus raising additonal tax revenue. It also probably rankles that the expenditure of that extra money in the pockets of the higher earners can be decided by them and not by bureacrats of the Nanny State.

 

The Labour party seem to have tentatively accepted the principle that you can reduce taxes to boost the economy and in the medium to long term bring in more revenue. That's exactly what they're proposing in their call for a cut to VAT. Personally, I think they've picked the wrong tax but unless (and it's a big unless) they're just playing gesture politics, it's not a massive jump from encouraging people to spend by reducing VAT and encouraging them to do so by leaving more of their money in their own pockets.

[Minty]

But I understand that it is a leap of imagination too far for most of the left to make, envisaging this extra expenditure in the economy increasing employment and thus raising additonal tax revenue. It also probably rankles that the expenditure of that extra money in the pockets of the higher earners can be decided by them and not by bureacrats of the Nanny State.

 

Why do people (not just you, and on both sides) make these sweeping generalisations about 'The Right' and 'The Left', and petty comments like 'it probably rankles' etc, etc, and still hope to have a constructive conversation? It's why I don't join in such threads, because the actualy (quite interesting IMO) issues get clouded in veils of insults and put-downs.

 

Here I go nonetheless.

 

Without specific facts, it is hard to say exactly who would spend what, if they are given a tax break. I suspect, as BTF said, that low-earners would be more likely to spend any extra money they get, because they feel they need to, rather than high-earners who may save that money, or possibly even move it offshore altogether. But that's only my personal hunch.

 

I think the subtleties of this, and Lord D's point about VAT, are generally over-analysed... the net effects of these kinds of changes are relatively small on an individual basis, but it is the political message it sends that seems more important to both those coming up with the policies, and those whose political ideologies it identifies/clashes with. If we spent more time looking at our own personal finances, rather than commenting on others', I suspect we'd be a lot better off, and probably less stressed in the process.

[Joensuu]

Show me the figures that prove that below a 40% tax rate, the taxman will receive a fall in revenue.

 

Really Wes? I'm actually a bit shocked that you think this is a point worthy of challenging me on.

 

I'll point you in this direction: http://en.wikipedia.org/wiki/Laffer_curve

 

I'll also give you a helpful scenario. At 80% tax someone earning £60k pa could easily find they save money if they hire an accountant. At 40% tax that same person would be spending more on account's fees than they could ever hope to save. As such, when you lower the tax rate, you are simultaneously increasing the amount of income you someone needs to be on before they would benefit from trying to avoid tax.

 

As such, at a 80% tax rate, millions of people will find it worth their while to hire accountants and try to avoid tax; at 40% tax rate, only a few hundred thousand would benefit by doing the same. The problem is, as you push the top rate down much further, any savings that are made by a few thousand less people trying to avoid tax, would be dwarfed by the fact that you are asking millions of people to pay less overall.

 

Seen as you like throwing challenges my way, can you point me to any evidence that cutting taxes below 45% can actually increase tax revenue? Examples from large mixed economies only please - and no tax havens don't count.

 

 

There is another factor not taken into account when tax rates are reduced. Apart from the likelihood that the tax revenue will increase, there is also the fact that those individuals paying less tax will probably spend that additional money in their pockets in the British economy, not only helping all sorts of businesses, service industries and manufacturers, but also increasing VAT revenue too. But I understand that it is a leap of imagination too far for most of the left to make, envisaging this extra expenditure in the economy increasing employment and thus raising additonal tax revenue. It also probably rankles that the expenditure of that extra money in the pockets of the higher earners can be decided by them and not by bureacrats of the Nanny State.

 

Yes, you are right, but it is something that is being taken into account. The less money people have to spend, the higher the percentage of their income they spend. Conversely, the wealthier you are, the more you save. As such, reducing tax for the richest would see a ripple of investment (and a heck of a lot of 'assets' purchased); reducing tax for those in the middle or bottom would see a surge in spending.

 

Of course, in your scenario, there's a magical tax cut for everyone. Which would see overall tax revenues rise (because of course in Wes-world tax revenues always increase the more they are cut eh?). Why don't we tax at 0% eh Wes? Surely in your view that would yield maximum revenues?

 

NB, I'm finding this debate less and less interesting, primarily because you've got rather bitter in your language e.g "I understand that it is a leap of imagination too far for most of the left to make". This isn't helpful Wes. It doesn't add to the debate. It sounds suspiciously like someone lashing out in frustruation at being debated into a corner.

[pap]

The tax burden for the average individual is approaching something like 50% anyway, once you add in council tax, fuel duty and VAT.

 

There are taxes everywhere and an entire industry to support it. The progressive taxation argument only really works if people at the top end are paying their fair share. That doesn't always happen.

 

I'm in favour of a flat tax, if everything else went. Harder on the smaller incomes? It's debatable. Stuff like VAT, Fuel Duty and tobacco taxation hit everyone. A minimum wage 40 hour a week job doesn't get you a place to live without government help. Progressive tax isn't being applied across the board.

[Lord Duckhunter]

You seem to have accepted the principle that lower taxes don't nessesarily mean less money going into the exchcheur Joensuu, now you are just debating the levels at which maximum revenue can be achieved. Is that really so far from Nigel Farage's position?

 

Pap makes a good point regarding a minimum wage. It is a political gesture designed to con the people into thinking the establishment care about low paid workers.

[pap]

You seem to have accepted the principle that lower taxes don't nessesarily mean less money going into the exchcheur Joensuu, now you are just debating the levels at which maximum revenue can be achieved. Is that really so far from Nigel Farage's position?

 

Pap makes a good point regarding a minimum wage. It is a political gesture designed to con the people into thinking the establishment care about low paid workers.

 

Most taxation terminology is positively Orwellian.

 

Value Added Tax? I bet they still laugh about that in the Revenue every day.

[View From The Top]

The tax burden for the average individual is approaching something like 50% anyway, once you add in council tax, fuel duty and VAT.

 

There are taxes everywhere and an entire industry to support it. The progressive taxation argument only really works if people at the top end are paying their fair share. That doesn't always happen.

 

I'm in favour of a flat tax, if everything else went. Harder on the smaller incomes? It's debatable. Stuff like VAT, Fuel Duty and tobacco taxation hit everyone. A minimum wage 40 hour a week job doesn't get you a place to live without government help. Progressive tax isn't being applied across the board.

 

That's a fair point. If it was just a flat rate of income tax then no, I'm opposed. If, however, it's a flat rate that abolishes the "stealth" taxes then I'm all in favour.

[Lord Duckhunter]

Most taxation terminology is positively Orwellian.

 

Value Added Tax? I bet they still laugh about that in the Revenue every day.

 

No surprise in was invented by the French.

 

Whilst we are in the EU the standard rate is not allowed to fall below 15% and the EU must approve any cut in VAT. Still some people seem happy to let foreign bureaucrats dictate every aspect of British life, so that wont bother them.

[bridge too far]

That's a fair point. If it was just a flat rate of income tax then no, I'm opposed. If, however, it's a flat rate that abolishes the "stealth" taxes then I'm all in favour.

 

I'm not sure - what about, for example, the fact that revenues raised by motoring taxes (Road Fund) would necessarily need to be included. That wouldn't be very fair on people who don't / can't drive. I'm sure there would be other examples.

[Patrick Bateman]

Most taxation terminology is positively Orwellian.

 

Value Added Tax? I bet they still laugh about that in the Revenue every day.

 

Brilliant, now I'm reading at properly and slowly as "Value Added Tax" ... that's made me chuckle.

 

It should be stripped back to what it really was supposed to be - a tax on luxury items. If I went and spunked £1000 on a new TV, which to be honest, who needs to do as you could get a smaller/cheaper one, pick one up for free etc., it's just keeping up with everyone else on an item we don't actually NEED. But anyway, if I were to do that, then yes, it's a luxury item and should (in my opinion) be subject to extra tax.

 

It's like stamp duty and inheritance tax - they weren't intended to get everyone, they were taxes on the properly wealthy landowners - just that they never evolved as the cost of living and house prices increased. Which to my mind is extremely unfair.

 

Let's face it, what does £250k get you in most of the South in terms of housing? Naff all really. Certainly not a house big enough to bring a family up and have space to work from home, but yes, even in the mid-80s, that would have got you a sizeable pad with big garden. So to pay 3% stamp for an average family house and then have your kids pay inheritance tax on it when you die and give it to them is outrageous.

 

Anyway, moan over.

 

As you were.

[Joensuu]

You seem to have accepted the principle that lower taxes don't nessesarily mean less money going into the exchcheur Joensuu, now you are just debating the levels at which maximum revenue can be achieved. Is that really so far from Nigel Farage's position?

In so much as we are both starting with a basic understanding of economics (at least I hope that is the case, but we can't be entirely certain, especially as the evidence in his own party's 'proposal' points to the contrary.

 

Pap makes a good point regarding a minimum wage. It is a political gesture designed to con the people into thinking the establishment care about low paid workers.

And I fully agree with Pap on that point. VAT especially is a very counter intuitive tax; I'd happily see it scrapped except on products like alcohol, tobacco, gambling, fizzy drinks etc.

[Lord Duckhunter]

And I fully agree with Pap on that point. VAT especially is a very counter intuitive tax; I'd happily see it scrapped except on products like alcohol, tobacco, gambling, fizzy drinks etc.

 

You do realise that while we remain part of the EU, we can not scrap VAT. If you want the British people to set their own VAT rates, put a big X next to UKIP next time you enter the polling station.

[buctootim]

VAT especially is a very counter intuitive tax; I'd happily see it scrapped except on products like alcohol, tobacco, gambling, fizzy drinks etc.

 

VAT is a good tax to pull in money from those who live or visit here but don't pay tax here (non doms, tourists, visitors etc). Its also pretty hard to avoid paying. Given VAT pulls in £103bn pa (about the same as National insurance) and far more than other taxes, say corporation tax (£39bn). If you didn't have some kind of consumption tax you would have much higher income taxes and be pushing up to the levels where it becomes a disincentive to work.

 

You can argue endlessly about which individuals should pay a bit more and who should pay a bit less, but the real issue is that corporate tax receipts have been declining as a share of the total tax take for decades.