Tax ''thiefing Scumbags''

[Dead Eye]

I can't see that tax model working unless there were drastic changes to other taxes to compensate. Since NI is 11% we are already taxed 31% on anything above 10k (as of the latest tax allowance). So raising that tax free allowance to, what? £20k maybe? For a living - which is doable. I would then expect to see income tax skyrocket to 50%+

The richer do get a bonus though - at the moment the tiered system means its 20% on anything between your tax allowance and £32k, then 40% on anything from £32k to £150k and then 45% on anything above £150k

So; assuming a 'rich' person is on £200k per year (gross - before tax), under the current system this is how it breaks down;
£200k minus tax free allowance (assume £10k) = £190k

20% Tax = £32k * 0.20 = £6400
40% Tax = £118k * 0.40 = £47200 (118k is 150k minus the 32k that tax has already been paid on)
45% Tax = £40k * 0.45 = £18000 (40k is the remainder of the total 190k income minus 150k that tax has already been paid on)

Total Tax = £71,600


Under your new system, we would raise the tax free allowance - for the sake of this lets go over the top and make that £12k (the higher this is, the less tax this 'individual' would pay)
So, taxable income is now 200k - 12k = 188k

With a flat rate of 30%, this means;

Total Tax = £188k * 0.30 = £56,400

That's a 15k drop in tax payments for the 'rich' - a 20% difference for this made up individual


This becomes more of a problem for the government the more you earn plus by raising the tax free allowance they lose out on a huge amount of money because a very large majority will be paying in to that first 20% base rate at the moment...


Sorry this went on a bit, I'm just trying to see if there is any way that that system could every work properly? A staged setup (like our current one) is the only way to distribute the volume of taxation such that everything doesn't fall to pieces, as far as I can see.