Simpliying Taxation

#1
There has been much talk of simplifying the tax system, and this lead to a debate at work.

So can we replace every tax we have with a flat rate of income tax, and if so what would that rate concievably be??

Would you pay let say 50% tax if there was no VAT or fuel duty or beer duty etc

Fuel at 60p/litre
Beer at £1:50 /pint
every thing you buy cheaper.

Benefits to include the reduction in the tax collecting and administering depts of government.

Reducing the Welfare bill in line with the new cost of living. (i'd leave pensions alone).

Possibly a disinsentive to Benefit migrants to come here for handouts (lower levels of disposable cash)

Any thoughts??
 
#6
If there was a high rate of income tax to subsidise VAT and various duties, those on benefits will have more to spend on booze and fags.
I agree with simplifying taxes but I don't think thats the right way to do it.
 
#7
stacker1 said:
If there was a high rate of income tax to subsidise VAT and various duties, those on benefits will have more to spend on booze and fags.
I agree with simplifying taxes but I don't think thats the right way to do it.
A few of the Eastern European Countries have gone to Flat rate tax codes with seemingly improved revenue.

Russia's tax take shot up by 25% for 2 years running with a 15% increase in the 3rd year.

http://en.wikipedia.org/wiki/Flat_tax goes through the ins and outs.

It would appear that, once you've thrashed out what you pay tax on , Admin costs fall by a fair amount whilst collection goes up.
 
#8
stacker1 said:
If there was a high rate of income tax to subsidise VAT and various duties, those on benefits will have more to spend on booze and fags.
I agree with simplifying taxes but I don't think thats the right way to do it.
Why do we worry about the effect of tax on keeping benefit claimants in booze and fags?

It all depends what behaviours you want to encourage. If you want a nation of people who want to work, raise families and save sensibly:

High tax threshold, retain tax breaks for marriage/children and low taxation of savings/pension/investments.

Of course we all know this then encourages pay in options in order to avoid tax. However you set it up, there are people who have enough nous to find a way around it. And if they can't, they'll go elsewhere.

Edited for mongness
 
#9
Kitmarlowe said:
stacker1 said:
If there was a high rate of income tax to subsidise VAT and various duties, those on benefits will have more to spend on booze and fags.
I agree with simplifying taxes but I don't think thats the right way to do it.
A few of the Eastern European Countries have gone to Flat rate tax codes with seemingly improved revenue.

Russia's tax take shot up by 25% for 2 years running with a 15% increase in the 3rd year.

http://en.wikipedia.org/wiki/Flat_tax goes through the ins and outs.

It would appear that, once you've thrashed out what you pay tax on , Admin costs fall by a fair amount whilst collection goes up.
This is such a simplification of the truth it beggars belief. It is reminiscent of a child saying "babies come from mummy's tummy". Partly correct, but it misses all the fcuking about involved.
 
#10
miles_gloriosus said:
Why do we worry about the effect of tax on keeping benefit claimants in booze and fags?

It all depends what behaviours you want to encourage. If you want a nation of people who want to work, raise families and save sensibly:

High tax threshold, retain tax breaks for marriage/children and low taxation of savings/pension/investments.

Of course we all know this then encourages pay in options in order to avoid tax. However you set it up, there are people who have enough nous to find a way around it. And if they can't, they'll go elsewhere.

Edited for mongness
No, no, no.

EVERYBODY knows that people only avoid tax because the rate is too high. If the tax rate was low everybody would happily pay it without complaint.

WAH
 
#11
miles_gloriosus said:
stacker1 said:
If there was a high rate of income tax to subsidise VAT and various duties, those on benefits will have more to spend on booze and fags.
I agree with simplifying taxes but I don't think thats the right way to do it.
Why do we worry about the effect of tax on keeping benefit claimants in booze and fags?
Because taxpayers will be paying taxes for their benefits as normal but now will also be paying higher taxes so those that don't work can buy even more booze and fags.
 
#12
Baz - I share your cynicism.

Edited for relevance
 
#14
stacker1 said:
miles_gloriosus said:
stacker1 said:
If there was a high rate of income tax to subsidise VAT and various duties, those on benefits will have more to spend on booze and fags.
I agree with simplifying taxes but I don't think thats the right way to do it.
Why do we worry about the effect of tax on keeping benefit claimants in booze and fags?
Because taxpayers will be paying taxes for their benefits as normal but now will also be paying higher taxes so those that don't work can buy even more booze and fags.
Stacker1 - we're talking at cross purposes. I agree with you. It was my frustration on the frequent line that VAT rises should be avoided as it disproportionately affects the low-income population. With the notable exception of fuel (for most of us), it's either a luxury or it isn't. If you can't afford it, don't buy it.
 
#15
johnboyzzz said:
Get rid of Road Tax and put it on the price of petrol/diesel, the more you drive the more you pay
I can buy into this.

Between us, me and the missus have 4 cars and 4 motorbikes.
 
#16
I think a system where the tax free personal allowance is raised but most (if not all) benefits are stopped would be good, Ive never seen the point in paying taxes to receive some of it back, just pay less tax.
 
#17
Semper_Flexibilis said:
johnboyzzz said:
Get rid of Road Tax and put it on the price of petrol/diesel, the more you drive the more you pay
I can buy into this.

Between us, me and the missus have 4 cars and 4 motorbikes.
4 of each? In that case I have a great tax savings scheme for you that will cut down how much you pay in road tax and it doesn't require waiting on a change in the law!
 
#18
Simplifying the tax system is a start perhaps, but what we actually need to do is link taxes to what they pay for in a much clearer way. If I want something or have bills to pay, I budget and put my money into accounts that are ringfenced for that purpose. At the minute we have a tax pot that is simply divvied up and we never know what value we are getting for our contributions. So link local services much more to local taxes, national services to nationally set taxes etc. etc. etc.
 

Mr_Fingerz

LE
Book Reviewer
#19
BlueDanubeWalt said:
zippy483 said:
BlueDanubeWalt said:
More to life than getting in the car to go to the Pub/Offie/Tescos for 'white Lightning' or if your a 'Jock' Buckfast...
And your point is?
Mean't to be humerous(see what I did there.. 8) ) but obviously wasted on you..!!
You mean it was a bone comment? (see what I did there? :D )


As for abolishing VAT and Excise Duties - Never happen for as long as we're in the EU. They're requirements of a couple of EU Directives - can't remember the numbers and I don't have my "Purple Book of Law (TM)" to hand.
 
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