Discussion in 'Diamond Lil's' started by slim, Mar 14, 2008.

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  1. Just can't wait for the next election, however my MPs a tory so just have to cross my fingers and hope he gets a lot more oppos in the house.


    STEALTH: Alistair Darling

    Friday March 14,2008
    By Macer Hall, Political Editor Have your say(15)
    Hard-working families will suffer most under Alistair Darling’s stealth-tax Budget, it emerged yesterday.

    Meanwhile, lone parents and households where no one works will be rewarded with a significant boost to their incomes.

    As experts began to analyse the small print, Philip Hammond, Shadow Chief Secretary to the Treasury, summed it up as “a bad news Budget for Britain’s middle-income familiesâ€. They will bear the brunt of Labour’s tax burden, according to the Institute for Fiscal Studies. In total, the average family is expected to be £110 a year worse off.
  2. Call me a bluff old traditionalist, but tax is a penalty for putting in the effort, in a graded tax system those who earn more pay more tax. It could be argued that higher pay isn't a recognition of delivering more from ones work, but in the main the harder one works, the more one gets payed.

    The middle range is always going to be worse off, although the increase in the indirect taxation load does seem to be oriented towards middle and higher income groups. Easier to manage ones tax liability in the higher income or more complex income categories, so the majority of the pain hits the middle income. Indirect taxes are more difficult to work around though.
  3. I agree with the reality that the more you get the more you pay, even so we do seem to be getting more and more into a situation where the midle income band is not only paying for the poor but for the rich too. Just how many tax loopholes exploited by the top 10% have been closed in the last ten years, almost none, how much extra tax has been piled on the middle incom payers, I reckon that I am paying out about 5% extra in paye than I did before Gordon started playing banker for us.
  4. And that is not counting all the INDIRECT taxes that have been brought in :thumright:
  5. However indirect taxation hits everyone, unless you happen to have a Private Limited mechanism to reduce your commitment. That allows a lot of ostensibly middle income generators to avoid a fair amount; your independent trades like plumbers and the like.

    HMRC are becoming a bit more rigid about misuse of that though, it appears to be more difficult to VAT register for example.
  6. I'm not convinced that I could realistically compare, my gross income has increased considerably in the last ten years so I've jumped a tax band, OTOH I understand the problem better now and have a few offsets in place. It doesn't recover much.

    The majority of the increases appear to be indirect, and in areas where the spend isn't discretionary; fuel probably being the biggest one. I know the cost for me to actually get to work is huge.
  7. Having managed to remain just in the standard band the comparison is easy, and is likely also to apply to every one. This of course does not detract from the reality that there are still too many loophles for those who can affor to use them. Simpler less leaky tax rules work and in reality allow the mainstream tax payer to pay less whilst those can afford more pay their allotted share, rather than avoid paying much of their share.

    Indirect taxes can be avoided, travelling to work costs me nothing, I use my bus pass, I have the satisfaction of saving the planet, reading whilst my chaufeur drives, and saving my money for more enjoyable things. Most indirect taxes are like speeding fines discretionary in that you can to a certain extent controll how much you pay. Gordon really should have learnt from the Tories, they lost favour as much as anything else because they effectively increased the tax burden on the middle classes, yes the headlinerates fell but too many other things went up, like university costs for example.
  8. Talking of increased fuel duty, and car tax, were we not told that the extra money raised would be spent on improving public transport? Trains are still slow, delayed, packed, outside of peak times in many places non-existant, and most of all expensive.

    As long as I can get from A-B for less than or even slightly more as public transport, without some chav threatening to stab me, with my own seat, and often quicker then why would I change? Example being from Medway to Portsmouth, I can drive that in less than two hours, and petrol costs being under £10 for my car (I've worked out my car has cost me £6.50 a day in costs). On a train there is no bus where I live, so £10 for a cab, over three hours on the train and changing, and a ticket cost of £33.60! Bit of a no-brainer really, train is slower, more than double the cost and not when I want to go!)
  9. chieftiff

    chieftiff War Hero Moderator

    I shouldn't laugh because this has just hit me very hard, but since I left the mob I seem to be laughing a lot :thumright:

    For those on the boundary of 20% and 40% tax bracket (middle income earners?) you have to ask if it's really worth it! My income is only just below the 40% tax bracket, add my company car tax, home office allowance etc and the fact that I pay 40% on my entire pussers pension (although I do get 40% tax benefit on my new contributory pension).

    It seems like a game to me, my HR department (it's like a proper HR department where people listen, help and know stuff; they enter your details into the computer and they tell you what you can claim on expenses, no need to scrape and crawl followed by looking through books yourself for the answers...... amazing!)have already advised me to self assess for 2008/2009 with a list of tax reclaimable items (some of which I'm sure I could have reclaimed when I was in!)

    The fact is I am financially better off than I was (and emotionally a lot better off, I even smile now) but not by as much as I thought, I guess you have to earn it to pay it as they say!
  10. Seaweed

    Seaweed War Hero Book Reviewer

    For years now we have been losing valuable talent in this country because of the disincentive effects of the tax structure on early retirees. I took early retirement from my 'afterlife' job mostly because I could see this was the last paid lifeboat to leave my particular version of the Titanic, which had managed to mislay $6bn dollars worldwide without its accountants noticing (it has perked up since). It therefore tried to pay everybody over 50 to go away as clearly they had caused the problem.

    I then had a look at what I might do to supplement my sudden transformation to pensioner. It soon became apparent that, whereas the State would pay my stamp up to age 65, if I took a job I should lose that and have to pay 50% of any new salary in tax and NI. Chuck in costs of travel to work and other expenses and the great light dawned - cut costs, be a gentleman of lesure, enjoy life all day.

    At a guess I should think there are a few million people 50-65 at any time who could be doing a useful job for the UK economy but are deterred by the tax system, let alone those who have donw a bunk to the sunshine and have their pensions paid outside the UK (not for me that one though, I've seen enough of abroad to agree with King George VI that it's [email protected]).
  11. Simplification would also reduce the cost of collection and reduce the opportunity for fraud, allowing a reduction in the size of HMRC as well. Win-win.

    I suspect we're just going to differ on the how much one needs to have to pay to be governed, and how that payment is extracted from us. If I didn't see so much waste in government I'd perhaps be more comfortable about the need.

    Some can, some can't, it's a choice, and in some cases the decisions are fairly major.

    I have the choice to live where I do, or move closer to the office. I'm not convinced that the saving in transport cost would make up for the increase in housing cost and general cost of living though. Of course the hour on the train each way tends to be quite productive.
  12. chieftiff

    chieftiff War Hero Moderator

    Whatever happened to the Telegraph's promised "March of the Flat Tax across Europe?" I seem to remember reading an article some time ago that the country would be significantly better off by a flat tax rate of 25% across the board (no excuses, no exclusions no squirming accountancy rules) In addition to the increased income there would be little need for the 99,000 tax collectors and clerks employed within the tax system. Apparently the PM hated the idea when he hung out at the treasury as it would get rid of his "tax credit" system, sounds like a good idea for no other reason than that to me.
  13. I suspect though we both see there are good reasons to reduce what government take from us to squander on it's own pomposity etc, though I realise your desire to see even smaller government than I would think desireable.
  14. Some discussion of tax in the UK in the Economist, here and here on tax harmonisation.

    One specifically on Estonia which was the model for flat tax regimes.
  15. Found it. Economist, although it's a year old
  16. Well as a single thing, I'll be worse off by several pence a month. What irritates me is that someone on over double my salary will actually be better off! :evil:

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