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Old 14th May 2010 | 13:23
  #49 (permalink)  
Skipping Classes
 
Joined: May 2007
Posts: 161
Likes: 0
From: Dark Side of The Moon
Dear Max,

Now you have completely lost credibility in my eyes: if you think that "tax-deductible" means "free" then we are really missing some very basic knowledge here.

Just before anybody gets an idea that BALPA membership is free, let me explain what tax-deductible is.

First, you have to pay 1% of your income to BALPA (or anybody else) with *real money*.

Then, *depending on your personal tax situation* your taxable income will be reduced by the amount that you have paid in tax-deductibles.

In other words, you don't pay tax over your entire income, but over your income minus the tax deductibles.

Depending on your personal situation, especially if you have a debt or other tax deductibles, this will not help you much. You would not pay that much tax anyway.

If you happen to make loads of money, then depending on the country you are in and in which tax-rate scale you are, you will pay less tax.

Example:

Lets say you earn 1000 EUR a month and pay 50% tax.

Without Balpa:
Salary 1000 EUR
Taxable income 1000 EUR
Tax 50% 500 EUR
Net 500 EUR

With Balpa:
Salary 1000 EUR
BALPA membership 10 EUR
Taxable income 990 EUR
Tax 50% 495.00 EUR
Net 495.00 EUR
You paid to BALPA: 5 EUR

Now if you happen to pay less tax, lets say 25%:

Without Balpa:
Salary 1000 EUR
Taxable income 1000 EUR
Tax 25% 250 EUR
Net 750 EUR

With Balpa:
Salary 1000 EUR
BALPA membership 10 EUR
Taxable income 990 EUR
Tax 25% 247.50 EUR
Net 742.50 EUR
You paid to BALPA: 7.50 EUR

Your membership therefore is ABSOLUTELY NOT FREE.
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