The 20:20 Tax Plan - WTF

Discussion in 'Finance, Property, Law' started by BFG 9000, Sep 28, 2008.

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  1. Greetings All,

    I saw this advert in the paper today & as much as I love the idea of paying less tax - I really cannot see how on earth it's supposed to work - any ideas?

    Top half (click for larger version)

    & Bottom half (click for larger version)



  2. I think everyone wears coloured shirts and trackie bottoms, and they use a white ball. It will be all over very quickly, and there will be winners and losers.
  3. It looks like the extra money comes from the elimination of tax relief on pension payments, and also the small increase in VAT and CGT. (The scheme is right to claim that pension tax relief is skewed towards higher-rate tax payers.)

    Note that this is pretty much a Flat Tax proposal, because there's a single rate of income tax (20%). Look up Flat Tax on Wikipedia: like most flat tax schemes, there's really a lower rate as well, 0%, but with a very wide tax band.

    I'm not an economist but I think the fact that income tax and CGT are harmonized at 20% is a very good idea. Rich people waste a lot of time/money trying to dodge income tax by 'converting' it to CGT.

    There are powerful arguments that corporation tax should be eliminated altogether (rather than reduced to 20% as in this plan), because it's a form of double taxation. But this plan seems a pretty pragmatic way to shake up the tax system without rocking the boat too much.
  4. First point that much is sure: You definitely ain't an economist

    Second point: You think that people who are/were on a low wage than the national average should be paying more in extra tax while some rich barsteward gets away with paying eff all because of his ability to employ top accountants etc.

    PS: The Liarbour party conference has finished go back to them.

  8. I assumed that they just didn't understand how income tax is actually implemented for individuals, and have a poor comprehension of algebra.