The Nature Of Taxation

[ComradeBadger]

Right, this is mainly aimed at UKers, and those of us who pay tax. Is anyone else bloody outraged that they're paying 25% of their income in tax?

I disagree with the principle of a tax on income, essentially it discourages me from contributing to the economy - and then on top of that, almost everything I buy I pay extortionate VAT, and often import duties etc..

And for what?

I'm in the group least likely to be unemployed, to rely on the NHS, or to claim benefits.

I don't like this tax malarky one bit.

 

[kirovman]

It's way higher than 25%.

 

[Llama]

No, it isn't.



40% tax applies only to high earners. The rest are on about 25%

 

[The Monkey]

We have roughly 40% tax far low-incomers here, and 50% for high earners. If you count the "social fees" that every employer pays, and which is essentially a tax because that money would've gone to the employed, we have an average tax rate in Sweden of 70-75%. And that's with a so-called "right-wing" government.

 

[repiV]

No, it isn't.



40% tax applies only to high earners. The rest are on about 25%

Deceptive, because of national insurance. Middle tax band (most people) is 22.5%, and then add 10% NI on top - that's a third of your income in tax straight away.

40%'ers are actually paying 50% when you include NI.

Then, as ComradeBadger pointed out to some extent, we pay extortionate taxes on everything we spend or save.

As illustration of how little money you actually get to keep under some circumstances, imagine that you're a high earner and you want to spend ?100 of your earnings on petrol. Once the tax is taken off your paycheque, that ?100 has become ?50.

So you put ?50 worth of petrol in your tank - or do you? 80% of that is actually tax, so you're giving another ?40 to the government and only actually get to keep 10%. So 90% of that money you earned goes straight back to Gordon Brown.

Wonderful, eh?

 

[Solaris]

Yep I think it's shit too.

It's such a bloody hassle getting your taxation sorted right too.

At the memoment I'm getting taxed a third of what I won becuase my bloody employer are soo inefficient in getting my tax code corrected. I've been to the tax office and it should be sorted by my next pay check but it's ****ing annoying.

Oh well, I suppose it goes to good things but a strong part of me is very angry that my money is going to sustain loosers on unemployment. Why should I - a full time student - have to pay for someone elses unemployment pay check.

What if tax was voluntary? Say you could tick a box on your paycheck that said - war on iraq, and other "NHS" where if you didn't tick it you lost coverage for 6 months evert time you didnt click. That would be fairer and more democratic.

 

[repiV]

But that's what socialism is all about. You can't have it both ways.

 

[Solaris]

I think no-one in the employment of the state should pay taxes and all should be in the employment of the state.

 

[repiV]

So how does this wonderful all-knowing, all-loving, mother-and-father-for-life state function if nobody pays taxes?

Why should I - a full time student - have to pay for someone elses unemployment pay check.

What if tax was voluntary? Say you could tick a box on your paycheck that said - war on iraq, and other "NHS" where if you didn't tick it you lost coverage for 6 months evert time you didnt click. That would be fairer and more democratic.

Imagine how those wealthy people you loathe so feel. Most of their hard-earned goes back to the government and they get absolutely nothing in return as they don't generally drain on state resources.

 

[theotherguy]

I think income tax is a necessary evil. The alternatives are much worse. Tarrifs and import taxes ruin national and international economies, luxury taxes don't generate enough revenue, and sales taxes disproportionately fall on the poor.

 

[Solaris]

Yeah otherguy makes a fair point.

 

[Ennui]

I stand with Thoreau on this one, Civil Disobedience is one of my favorite pieces of prose ever.

 

[Qonfused]

I think income tax is a necessary evil. The alternatives are much worse. Tarrifs and import taxes ruin national and international economies, luxury taxes don't generate enough revenue, and sales taxes disproportionately fall on the poor.

This.

Income tax is indeed a necessary evil.

 

[ComradeBadger]

I think the less government, the better. Local councils are prime examples of bloated over-beaurocractic systems that suck in money, and do very little.

The problem is, theotherguy, we have tarrifs, import taxes and sales taxes as well.

The tax burden is just silly. As someone who will (hopefully) end up being a high earner, I don't want to see 40% of my wages vanishing into thin air.

I'm just gonna vote for whatever part promises 'less government'

 

[PvtRyan]

Is a small government a realistic idea though? I mean, has there ever been a complex nation that had a small government?

I don't think the amount of tax payed is even relevant, what's relevant is how much is squandered and what you see in return. If you can uphold a high standard of living with 75% taxes (Sweden comes to mind) then I wouldn't feel strongly about it.

A streamlined government should be the aim, not necessarily a small one.

 

[repiV]

Hong Kong manages just fine with small government.

Big government is about control freakery and bleeding people's successes dry to pay for other people's failures. Little else.

 

[Mr Stabby]

The USA had very small government up till the 1920's.

Government is inherently an inefficient system, but some things do require government and those things need to be payed for by taxes, but I certainly think, we need less government and less taxes.

 

[theotherguy]

I think the less government, the better. Local councils are prime examples of bloated over-beaurocractic systems that suck in money, and do very little.

The problem is, theotherguy, we have tarrifs, import taxes and sales taxes as well.

The tax burden is just silly. As someone who will (hopefully) end up being a high earner, I don't want to see 40% of my wages vanishing into thin air.

I'm just gonna vote for whatever part promises 'less government'

Yes, but the government must get its revenue from somewhere if it wants to continue funding programs. Tarrifs and sales taxes are much lower than they would be if you did not have an income tax. The sad fact is, the government cannot fund its programs without high income taxes, and they cannot increase tarrifs and sales taxes without wrecking the economy.

It's fine if you want a smaller government, but you must consider the implications of a smaller government. If income taxes were significantly lower, you would have to kiss NHS, student aid, and social welfare goodbye.

 

[theotherguy]

Hong Kong manages just fine with small government.

Big government is about control freakery and bleeding people's successes dry to pay for other people's failures. Little else.

Hong Kong is also a very small country with very few services and an economy almost entirely linked to foreign trade.

 

[repiV]

Hong Kong is also a very small country with very few services and an economy almost entirely linked to foreign trade.

Few services is not necessarily a bad thing. While physically the country is small, its population is similar to Sweden and Finland.

The sad reality is that nowadays living in this country is so prohibitively expensive that the majority of people are struggling just to get by. You would expect a country as wealthy as the UK to provide a good standard of living for most people, but that's just simply not the case anymore. You can have a better lifestyle by going to a third world country and teaching English. Now, something is clearly wrong here.

 

[theotherguy]

The USA had very small government up till the 1920's.

Government is inherently an inefficient system, but some things do require government and those things need to be payed for by taxes, but I certainly think, we need less government and less taxes.

The US economy was also wrought with huge monopolies, trusts, economic bubbles and speculation until the end of the Great Depression. The reason we have larger government today is because private industry made life so miserable in those times.

"less government" inherently means "more corporate" these days, and if you started deregulating industries and cutting government services, private monopolies would inevitably take over, resulting in inflated prices and unfair practices. Energy here in Texas is a very good example of this, as well as telecommunications. In both those industries, the retreat of government resulted in severe price-gouging and a steep increase in living costs.

 

[Mr Stabby]

Monopolies cannot exist without the government to support them, the great depression was caused by the federal reserve undermining confidence in the money supply and government tariffs on imports, not the free market.

The US government is heavily in bed with corporate America, it's not due to non-regulation that America has a corporation problem, but due to the wrong sort of deregulation pushed by special interest groups. The government can work in the interests of corporatism, look at the American health care industry.

 

[theotherguy]

Monopolies cannot exist without the government to support them, the great depression was caused by the federal reserve undermining confidence in the money supply and government tariffs on imports, not the free market.

The US government is heavily in bed with corporate America, it's not due to non-regulation that America has a corporation problem, but due to the wrong sort of deregulation pushed by special interest groups. The government can work in the interests of corporatism, look at the American health care industry.

Excuse me, but unregulated free markets inevitablyresult in monopolies. They are a natural feature of markets. One of the biggest jobs of the government in the economic sector is to break up monopolies and prevent them from forming. It's true that governments can be influenced greatly by monopolist interest groups, but monopolists almost always call for less government involvement and less regulation, because it threatens their position in the market. Certain nationalized monopolies cannot exist without the government, like Russia's Gazprom, but this is merely the case when the government picks a company to distribute its resources and services, and bans all others. Regular, run-of-the-mill monopolies, like the "classic" monopolies of the 1870's, pop up naturally without any interference from the government.

I agree that the problem of deregulation is largely the result of government contracting. It can be difficult for the government to leave a sector without awarding contracts to bidders to take over their resources.

And I hope you realize that "corporatism" refers to a system of government which has nothing to do with corporations, but labor syndicates.

 

[Raziaar]

Fascim is the government type that focuses on corporate economic practice if I'm not mistaken...

 

[BabyHeadCrab]

Just to correct a few people, Hong Kong is not considered a country. Hong Kong is actually a separately governed province of the People's Republic of China, it's considered and recognized internationally as a part of China. It's quite easy to get it confused, though, because it operates almost entirely independent from other areas of mainland China.

 

[Eejit]

Few services is not necessarily a bad thing. While physically the country is small, its population is similar to Sweden and Finland.

The sad reality is that nowadays living in this country is so prohibitively expensive that the majority of people are struggling just to get by. You would expect a country as wealthy as the UK to provide a good standard of living for most people, but that's just simply not the case anymore. You can have a better lifestyle by going to a third world country and teaching English. Now, something is clearly wrong here.

Get out of London man, all you ever do is complain about how expensive it is

 

[Llama]

Deceptive, because of national insurance. Middle tax band (most people) is 22.5%, and then add 10% NI on top - that's a third of your income in tax straight away.

40%'ers are actually paying 50% when you include NI.

Then, as ComradeBadger pointed out to some extent, we pay extortionate taxes on everything we spend or save.

As illustration of how little money you actually get to keep under some circumstances, imagine that you're a high earner and you want to spend ?100 of your earnings on petrol. Once the tax is taken off your paycheque, that ?100 has become ?50.

So you put ?50 worth of petrol in your tank - or do you? 80% of that is actually tax, so you're giving another ?40 to the government and only actually get to keep 10%. So 90% of that money you earned goes straight back to Gordon Brown.

Wonderful, eh?

Oh snap, my good man. Fair enough, I was only considering the rate of income tax without NI.

 

[repiV]

Just to correct a few people, Hong Kong is not considered a country. Hong Kong is actually a separately governed province of the People's Republic of China, it's considered and recognized internationally as a part of China. It's quite easy to get it confused, though, because it operates almost entirely independent from other areas of mainland China.

Yes I know, but it's not particularly important really. It's not relevant to the discussion and it's easier to just call it a country.

Get out of London man, all you ever do is complain about how expensive it is

I'm going to - moving to Exeter hopefully by January. Just a case of getting the money together and hopefully I'll be able to walk properly by then.

The whole country is stupidly expensive though, it's not just London. Pubs in Exeter are actually more expensive than round here in many cases...although property is certainly cheaper.

Oh snap, my good man. Fair enough, I was only considering the rate of income tax without NI.

Aye, the big problem really is all the hidden taxes. Income tax is OK because it's transparent, but you pay tax on absolutely everything you save, spend or even leave to your kids when you die. The government spends 45% of the nation's GDP, and the annual tax take has doubled since 1997!

 

[Mr Stabby]

Excuse me, but unregulated free markets inevitablyresult in monopolies.

Examples of monopoly that exist without government?

They are a natural feature of markets. One of the biggest jobs of the government in the economic sector is to break up monopolies and prevent them from forming. It's true that governments can be influenced greatly by monopolist interest groups, but monopolists almost always call for less government involvement and less regulation, because it threatens their position in the market. Certain nationalized monopolies cannot exist without the government, like Russia's Gazprom, but this is merely the case when the government picks a company to distribute its resources and services, and bans all others. Regular, run-of-the-mill monopolies, like the "classic" monopolies of the 1870's, pop up naturally without any interference from the government.

The market is far better at undermining monopolies than the government. The US government has a history of labeling very successful companies monopolies like Microsoft, even though they are not. It's not deregulation that favors corporatism, it's certain deregulations, that allow corporations an unfair advantage in certain actions and the corporation being the first to know when to take advantage of the deregulation. If for example an oil company pushed for drilling ANWR, they also may know when exactly drilling ANWR was legal.

Also the government has a habit of bailing out big companies mistakes, ie Bear Sterns, Enron etc. that encourages recklessness in the market, such as the sub prime mortgage issue.


All monopolies require the government to somehow limit the monopolies competitors to compete with them or give one competitor an unfair advantage.

I agree that the problem of deregulation is largely the result of government contracting. It can be difficult for the government to leave a sector without awarding contracts to bidders to take over their resources.

The government is way more likely to undermine the market with it's own incompetence than any company.

And I hope you realize that "corporatism" refers to a system of government which has nothing to do with corporations, but labor syndicates.

Corporatism refers to corporate influence on government, a corporation can be a big company or a trade union, and ranges from minor influence to full blown fascism.

 

[V-Man339]

I smell revolution...

Why do you think America rebeled against England in the first place?
Mostly those damn taxes.

In any case, you should see our government. While we don't have overdone taxes like yours, we more than make up for it by taxing every possible and conceivable action known to man.
Having a wedding? Extra taxes!
Just married? More taxes for life!
Looking at documents in the government? Taxes!
Smoking? Taxes!
Own a house? Taxes!
Making money? Taxes!
Taking a shorter road (toll booth)? Taxes!
Buying anything in general? Taxes!
Won the lottery? Taxes!
Own or buying a car? Taxes!

I could go on and on, and other countries have some of these taxes, but we have just about every conceivable tax known to man.
Look where all of it gets spent though: Iraq War.
Where half the vehicles aren't even used.
Seriously America needs to rethink their budget entirely if they're going to tax us so much.
Like healthcare (if we had it for free, we'd have it better than Canada), or education, or maybe even putting it towards a good cause, such as buying less cheap crap from China or Taiwan (etc.) that almost always finds it's way towards Walmart and other big names.

 

[CptStern]

You would expect a country as wealthy as the UK to provide a good standard of living for most people, but that's just simply not the case anymore. You can have a better lifestyle by going to a third world country and teaching English. Now, something is clearly wrong here.

you're not in the top ten for standard of living but you're certainly not on the bottom rung of the HDI scale and in good company in position #17

http://en.wikipedia.org/wiki/Human_Development_Index#2007_report

 

[repiV]

you're not in the top ten for standard of living but you're certainly not on the bottom rung of the HDI scale and in good company in position #17

http://en.wikipedia.org/wiki/Human_Development_Index#2007_report

Why use the HDI as a measure of how far your money goes? Morever, things are becoming more difficult by the month. The cost of food has gone up 70% in the past year and the price of petrol has gone up 30% in six months. It's madness.

 

[CptStern]

Why use the HDI as a measure of how far your money goes?

what? you said:

You would expect a country as wealthy as the UK to provide a good standard of living for most people

the HDI measures standard of living


and food prices are up everywhere, because of gas prices ..shit is getting more expensive to ship

 

[repiV]

what? you said:

the HDI measures standard of living

Yes, yes, but I was clearly talking about finances.

and food prices are up everywhere, because of gas prices ..shit is getting more expensive to ship

It's worse here, because we're bled dry by fuel duty and VAT. Diesel (aka truck fuel) is over US$11 a gallon here now, and the vast majority of that is tax.

 

[CptStern]

canada is not the US, we get taxed to shit at the pumps as well

 

[repiV]

canada is not the US, we get taxed to shit at the pumps as well

Not as much as we do, I guarantee. We pay the highest taxes on fuel in the world - and we also pay extortionate taxes on all other aspects of owning and using vehicles too. Topically, you now have to pay 200 quid per day to drive a van or HGV that doesn't meet new emissions standards in or near London (which is and will drive all but the biggest firms out of business).
Most people drive 1.2-1.6 litre shitboxes here, it's too expensive to drive anything decent.

 

[Mr Stabby]

I found this site on government expenditure.

31bn on debt interest is an interesting expenditure. I'd like to know what exactly social protection (159bn) means.

 

[theotherguy]

Corporatism refers to corporate influence on government, a corporation can be a big company or a trade union, and ranges from minor influence to full blown fascism.

Nope.

the theory and practice of organizing society into ?corporations? subordinate to the state. According to corporatist theory, workers and employers would be organized into industrial and professional corporations serving as organs of political representation and controlling to a large extent the persons and activities within their jurisdiction. However, as the ?corporate state? was put into effect in fascist Italy between World Wars I and II, it reflected the will of the country?s dictator, Benito Mussolini, rather than the adjusted interests of economic groups.

Modern corporatist states include Mexico, which requires its citizens to join large, state-run "corporations" or syndicates. It is literally illegal in corporatist states to lobby the government without being part of a state-run corporation. In corporate states, the goal of the "corporations" is not profit, but political representation. Corporate influence on democratic states with free markets is known as corporate pluralism, or corporate hyperpluralism, which is what we have in the US. In these states, corporations are privately owned and run to create a profit, but they can also lobby the government for their interests. In a hyperpluralist state, there are so many competing corporate interests that nothing can ever get done.

 

[JFry]

well that was enlightening.

 

[kazsymonds]

Basic rate of tax - 22%
Class 1 national insurance - 11%