Reply to: Fecking mess

[wendigo100]

Back on topic

The executive Chairman of HM Revenue and Customs, David Varney, disagreed with some of the criticisms (of the tax credits system): "We reject any assertion that overpayments have occurred because the tax credit system is either unduly complex or hard to implement" he said.

"This is a system benefiting over 6 million families, the vast majority of whom have faced no difficulties with their payments. We have already put in place many improvements to deal with the problems raised."

But hold on Mr Varney:

The Public Accounts Committee (PAC) chairman, Edward Leigh MP, subjected the HM Revenue and Customs to some of the most scathing criticisms it has ever received.

Describing the system as a "nightmare" and "frustratingly arcane" he said: "The Revenue has yet to produce reliable evidence that the flood of public money being wasted under the previous tax credits scheme through fraud and error has been stemmed to any degree."

Blair's legacy is unprecedented incompetence throughout government in the UK.

[Churchill]

I think this discussion is closed after that. Maybe you should be thinking of some solutions instead of calling people communists. I don't pretend this idea is perfect, but at least it's an idea.

Noddy is Niall and I claim my five pounds - non taxable of course!

[NoddY]

No thanks, comrade.

I think this discussion is closed after that. Maybe you should be thinking of some solutions instead of calling people communists. I don't pretend this idea is perfect, but at least it's an idea.

[Scaroth of the Jagaroth]

Banded VAT sounds like madness - an even greater enforcement cost.

Yes VAT is regressive with respect to income but not consumption. But because the poor generally consume less, use State services more and what they do consume is generally exempt anyway e.g. food they should be better off.

It's really about the transfer of money, choice and resposibility from government to the indiviual. The incentive to earn is still there - you keep it all. This gives people security and the choice to save, invest or spend.

But VAT is, in effect, banded now. There are different rates for different goods. What you are propounding is that the state decides what poor people should be allowed to buy (and hence is made VAT exempt) and what items should be deemed as conspicuous consumption for the rich only and heavily taxed.

No thanks, comrade.

[NoddY]

Unless you are suggesting that VAT becomes banded, with the price you pay for goods dependent on how much you earn?

Banded VAT sounds like madness - an even greater enforcement cost.

Yes VAT is regressive with respect to income but not consumption. But because the poor generally consume less, use State services more and what they do consume is generally exempt anyway e.g. food they should be better off.

It's really about the transfer of money, choice and resposibility from government to the indiviual. The incentive to earn is still there - you keep it all. This gives people security and the choice to save, invest or spend.

[Scaroth of the Jagaroth]

But VAT is a harshly regressive tax, affecting those on lowest incomes the most. Unless you are suggesting that VAT becomes banded, with the price you pay for goods dependent on how much you earn?

[NoddY]

Tax credits are effectively a subsidy to top-up wages (as are many benefits) administered by a massive bureaucracy. Ideally the money that is locked up in this crazy system is given back to the real economy - thus negating the need for the wage subsidy in the first place.

As for a fair tax - the only 'fair' tax is one on consumption aka VAT!
This is turn raises an interesting scenario where people are ONLY taxed on consumption. Earners are left with an untaxed income in their pocket - thus transfering responsibility for spending and investment from government to the individual. Tidy thought I think, but the cost of enforcement could be as much as maintaining the current bureaucracy.

[Scaroth of the Jagaroth]

Such a high rate doesnt encourage people to contribute though. There is basically no change to what they are paying now. Also having such a low baseline (£12k) still means that people will look for ways of cheating. The beauty of a low tax rate and a high threshold is that there is no point in trying to evade paying tax.

Thus once again my ideas have shown themselves to be far superior to anything you goons have come up with yet

Mailman

Mailman, the idea behind a flat tax is not that everybody pays less tax, although for those on the bottom of the ladder this will be the case. The idea is that the system is simplified making it more difficult to evade or avoid tax. If all income, regardless of source, is taxed at the same flat rate with no exceptions, evasion/avoidance becomes much more difficult.

[Churchill]

Such a high rate doesnt encourage people to contribute though. There is basically no change to what they are paying now. Also having such a low baseline (£12k) still means that people will look for ways of cheating. The beauty of a low tax rate and a high threshold is that there is no point in trying to evade paying tax.

Thus once again my ideas have shown themselves to be far superior to anything you goons have come up with yet

Mailman

Your ideas?

I have proof that the mighty(in stature and ability) Threaded first discussed this proposal in 1289BC

[Mailman]

Such a high rate doesnt encourage people to contribute though. There is basically no change to what they are paying now. Also having such a low baseline (£12k) still means that people will look for ways of cheating. The beauty of a low tax rate and a high threshold is that there is no point in trying to evade paying tax.

Thus once again my ideas have shown themselves to be far superior to anything you goons have come up with yet

Mailman

[Churchill]

As far as I recall it was "all in", yes, hence the higher rate kicking in lower. Germany in particular is having an anguished time over the concept of it not being "progressive" (i.e. not penalising big earners).

Petty Jealousy...

If you earn more, why should you pay a greater percentage... Where's the incentive?

Oh, errr, sorry, we've already gone through this bit, haven't we?

[Scaroth of the Jagaroth]

Will the flat rate of 35% include their Social Security payments?

As far as I recall it was "all in", yes, hence the higher rate kicking in lower. Germany in particular is having an anguished time over the concept of it not being "progressive" (i.e. not penalising big earners).

[Churchill]

The think tank proposal was for a flat rate of 25% kicking in at £12k to raise more or less the same revenue as currently. Germany and Holland are both looking at the idea but favour a much higher flat rate, as you might expect: 35%.

Will the flat rate of 35% include their Social Security payments?

[Scaroth of the Jagaroth]

The think tank proposal was for a flat rate of 25% kicking in at £12k to raise more or less the same revenue as currently. Germany and Holland are both looking at the idea but favour a much higher flat rate, as you might expect: 35%.

[tim123]

Not true, case studies of all countries with flat rate taxes has shown that tax collection has increased since the introduction. However, if you read the paper released by Gordo, where he had all the good points about flat rate systems removed, you would think flat rate tax systems are a bad thing

Mailman

For a flat tax starting at 5K perhaps, but one starting at 28K doesn't have a hope.

Just how many people earn more than 28K?

tim