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Who wants flat rate taxation?

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Who wants flat rate taxation?

Old 20th Aug 2005, 17:34
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Who wants flat rate taxation?

Well, we know that Gordon Brown isn't terribly keen on the idea. What does everybody else think?

The proposal that I've heard for this country is that the personal allowance should be increased to 12,000 and a flat rate of 22% of any income after that. This means any income, be it from dividends, wages or savings interest and all the current allowances and credits will be removed.

Aside from the fears of accountants, (who could find something productive to do) what do you lot reckon?
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Old 20th Aug 2005, 17:55
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Where do I sign?! In a tax office in dreamland, I presume.
 
Old 20th Aug 2005, 18:49
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It sounds like a dream come true for most people on moderate incomes..............and you know what they say: if it's sounds too good to be true, that's what it probably is.

I read the article about it in the paper earlier this week and I must say it all sounds really good in theory. I can't imagine our present government implementing anything remotely like this - it would be far too lenient on higher income earners and people who work hard and are successful. They prefer to grind us all down instead - it's much more politically correct.
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Old 22nd Aug 2005, 17:52
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Sounds great!!!

I haven't seen any discussion on it before - so how will it be paid for?

Raising the personal allowance will reduce the Govt income by huge amounts and getting rid of the higher rate will reduce it much futher.

The taxpayer wins but what does Gordon get out of it?

(OK so tax credits etc go - but do they really cost that much?)
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Old 22nd Aug 2005, 18:24
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It will more than pay for itself! There is increasing evidence that decreased tax rates increase total tax takes, at levels even lower than previously thought. Ask the Americans, who gave tax breaks to the rich, and tax takes went up when everyone predicted they would go down.
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Old 22nd Aug 2005, 18:44
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More info here:

http://www.thisismoney.co.uk/tax-adv...&in_page_id=77


http://www.blackenterprise.com/yb/yb...lackenterprise
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Old 22nd Aug 2005, 19:10
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Bunch of people over here in the STates have been hankering for a flat tax for years. Never going to happen, because there's too much money invested in the current byzantine and ever-changing system.

Those in favor of flat-rate-taxes:
- low income
- middle class
- upper middle class
(based on income, say people earning from $0 up to about $120,000)

Those against it:
- the wealthy (would end up paying more than they do)
- tax lawyers and accountants (there's good money to be made every year charging people to prepare their taxes)
- IRS (a simpler tax code would reduce the size of the bureaucracy needed to administer said laws)
- software companies (lots of money made every year updating payroll/home tax/acounting software for changes in the tax code)

Given that laws are made by elected officials, and those elected officials are almost criminally beholden to those what donated heavily to their campaigns, and those heavy donations are made by the rich, the powerful, the lawyers and lobbying groups representing same... well, I'm not holding my breath.
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Old 22nd Aug 2005, 20:24
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I'd like to take the idea much further, and put forward the idea of a single-point tax system.

At the moment, we're taxed in so many different places - income tax when you earn your money, then national insurance, plus the employers' NI contribution (conveniently hidden from your payslip) - these already add up to around 40% before you even see any of your money.

Then there's council tax to pay - out of your already taxed earnings.

If you've got any left after that lot then there's VAT when you try to spend it . . . and if you're daft enough to spend it on fuel then, well... you only have yourself to blame. (They even charge VAT on the duty - taxing your tax !).

You can't even escape it at the end... from beyond the grave, Gordon will claw back another 40% in inheritance tax.

Why not collect it all in the one place, as income tax with a flat rate ? Of course, then everyone would see just how much of it goes, and we'd end up with a flat rate of about 95%
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Old 22nd Aug 2005, 20:53
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gross taxable payable net tax rate %
10,000 0 0
20,000 8,000 1,760 18,240 8.80%
30,000 18,000 3,960 26,040 13.20%
40,000 28,000 6,160 33,840 15.40%
50,000 38,000 8,360 41,640 16.72%
60,000 48,000 10,560 49,440 17.60%
70,000 58,000 12,760 57,240 18.23%
80,000 68,000 14,960 65,040 18.70%
90,000 78,000 17,160 72,840 19.07%
100,000 88,000 19,360 80,640 19.36%
110,000 98,000 21,560 88,440 19.60%
120,000 108,000 23,760 96,240 19.80%
130,000 118,000 25,960 104,040 19.97%
140,000 128,000 28,160 111,840 20.11%
150,000 138,000 30,360 119,640 20.24%
160,000 148,000 32,560 127,440 20.35%
170,000 158,000 34,760 135,240 20.45%
180,000 168,000 36,960 143,040 20.53%
190,000 178,000 39,160 150,840 20.61%
200,000 188,000 41,360 158,640 20.68%
210,000 198,000 43,560 166,440 20.74%
220,000 208,000 45,760 174,240 20.80%
230,000 218,000 47,960 182,040 20.85%
240,000 228,000 50,160 189,840 20.90%
250,000 238,000 52,360 197,640 20.94%
260,000 248,000 54,560 205,440 20.98%
270,000 258,000 56,760 213,240 21.02%
280,000 268,000 58,960 221,040 21.06%
290,000 278,000 61,160 228,840 21.09%
300,000 288,000 63,360 236,640 21.12%
310,000 298,000 65,560 244,440 21.15%
320,000 308,000 67,760 252,240 21.18%
330,000 318,000 69,960 260,040 21.20%
340,000 328,000 72,160 267,840 21.22%
350,000 338,000 74,360 275,640 21.25%
360,000 348,000 76,560 283,440 21.27%
370,000 358,000 78,760 291,240 21.29%
380,000 368,000 80,960 299,040 21.31%
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Old 22nd Aug 2005, 22:11
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Hi Grainger,

I'm very keen on the single point tax system! However I think I would rather see it applied as VAT rather than income tax.

That would give the treasury a better chance of taxing anyone who derives their income from illegitimate means.

SoB
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