Sponsor Message:
Non Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
UK Budget Abolishes 10% Income Tax Rate  
User currently offlineDisruptivehair From United Kingdom, joined Mar 2007, 598 posts, RR: 0
Posted (7 years 4 months 1 week 3 days 16 hours ago) and read 1386 times:

I'm not affected by this but I know a lot of people who are. I think it's outrageous that the tax cut I've been handed has been stolen from them. I don't want the tax cut if it has to come from their pockets; it's B.S.

What do you guys think?

38 replies: All unread, showing first 25:
 
User currently offlineFlyLondon From United Kingdom, joined Feb 2004, 377 posts, RR: 0
Reply 1, posted (7 years 4 months 1 week 3 days 16 hours ago) and read 1367 times:

Doing some back-of-an-envelope calculations the neutral salary for the 10% band loss/2% cut seems to be about £20,000.
Therefore if you earn more than this you are better off under the changes, if you earn less you are worse off. So strangely it seems that the poor are subsidising the middle class and wealthy. Seems comrade Brown is trying to win back the dissaffected middle class voters who will send him packing come the next election.


User currently offlineTheSonntag From Germany, joined Jun 2005, 3516 posts, RR: 29
Reply 2, posted (7 years 4 months 1 week 3 days 15 hours ago) and read 1355 times:

I have no insight in UK taxation laws, but to me it seems that many states in Europe as well as other industrial states are seeing a dangerous tendency towards a diminishing middle class.

It is the middle class that bears the society. If it goes under, a state is getting in serious trouble. This already happened in the roman republic before christ, and it still is valid.

Therefore, I think it cannot be that the middle class has to pay for everything in the way they do today. Otherwise, I fear that crime rates will rise extremely and the stability of many states will be endangered.


User currently offlineDisruptivehair From United Kingdom, joined Mar 2007, 598 posts, RR: 0
Reply 3, posted (7 years 4 months 1 week 3 days 15 hours ago) and read 1351 times:

If I could vote here, it definitely wouldn't be for Grabby Gordon.

Or for that liar David Cameron. He sucks too.

I think I'd just stay home.


User currently offlineJwenting From Netherlands, joined Apr 2001, 10213 posts, RR: 18
Reply 4, posted (7 years 4 months 1 week 3 days 15 hours ago) and read 1340 times:

you had an entry rate that low?
WOW. Lowest rate here is over 30%...

Abandoning the lowest rate is usually accompanied by the introduction of all kind of special measures to make sure people paying that rate aren't going to pay more taxes while people paying higher rates WILL pay more.
For example a higher free amount for people with low incomes, special deductions for people with low incomes, etc. etc.

It WILL come out of the pockets of the middle class most of all, the people with incomes just over that limit who will get to pay higher taxes yet receive less taxcuts.



I wish I were flying
User currently offlineBanco From United Kingdom, joined Oct 2001, 14752 posts, RR: 53
Reply 5, posted (7 years 4 months 1 week 3 days 14 hours ago) and read 1313 times:

Quoting Jwenting (Reply 4):
Lowest rate here is over 30%...

That's not far of our highest, which is 40%.

Anyway, as I wrote elsewhere, those of us with small businesses are also getting clobbered, with an increase in Corporation Tax from 19% to 22%. Great.  Yeah sure



She's as nervous as a very small nun at a penguin shoot.
User currently offlineNighthawk From UK - Scotland, joined Sep 2001, 5126 posts, RR: 34
Reply 6, posted (7 years 4 months 1 week 3 days 14 hours ago) and read 1297 times:

Quoting FlyLondon (Reply 1):
Doing some back-of-an-envelope calculations the neutral salary for the 10% band loss/2% cut seems to be about £20,000.
Therefore if you earn more than this you are better off under the changes

Woo hoo. Thanks for the subsidy you working class peasents  Silly



That'll teach you
User currently offlinePope From , joined Dec 1969, posts, RR:
Reply 7, posted (7 years 4 months 1 week 3 days 13 hours ago) and read 1287 times:

Quoting TheSonntag (Reply 2):
I have no insight in UK taxation laws, but to me it seems that many states in Europe as well as other industrial states are seeing a dangerous tendency towards a diminishing middle class.

Every American individual taxpayer has seen their marginal tax rates cut during the past 6 years.


User currently offlineBA747YYZ From Canada, joined Mar 2006, 377 posts, RR: 0
Reply 8, posted (7 years 4 months 1 week 3 days 6 hours ago) and read 1238 times:

It's called help who you want to vote for you. Who votes the most? The old and the middle class. The poor don't vote so its not in your interest to help them. Besides 10% is rediculously low. Well not as bad the a tax free Native.

User currently offlineDisruptivehair From United Kingdom, joined Mar 2007, 598 posts, RR: 0
Reply 9, posted (7 years 4 months 1 week 2 days 20 hours ago) and read 1204 times:

Quoting BA747YYZ (Reply 8):
It's called help who you want to vote for you. Who votes the most? The old and the middle class. The poor don't vote so its not in your interest to help them. Besides 10% is rediculously low. Well not as bad the a tax free Native.

I still think it's rubbish to demand more taxes from the people least able to pay them, and less from the people most able to pay them. It's regressive and it's a crock. I just can't believe I heard such garbage coming out of a Labour politician's mouth. They've truly shown their Thatcherite colors now.


User currently offlineBanco From United Kingdom, joined Oct 2001, 14752 posts, RR: 53
Reply 10, posted (7 years 4 months 1 week 2 days 20 hours ago) and read 1198 times:

Quoting Disruptivehair (Reply 9):
They've truly shown their Thatcherite colors now.

Mmm, well that's a bit over the top, considering how much help they've offered the low paid over the last decade. Still, it is a bit of a surprising move given that history to make tax changes that make the least affluent worse off. The whole point of the 10% starting rate was to give the least well-off the opportunity to keep more of their money. The ones that benefit most are those earning above 20k but below the 40% threshold, which isn't a bad thing in itself, since that group are hardly in the stinking rich bracket. But I think the point is well-made, that group are one of the biggest and most likely to vote, it's just that changes like this usually happen just before an election.



She's as nervous as a very small nun at a penguin shoot.
User currently offlineDisruptivehair From United Kingdom, joined Mar 2007, 598 posts, RR: 0
Reply 11, posted (7 years 4 months 1 week 2 days 20 hours ago) and read 1196 times:

Quoting Banco (Reply 10):
Mmm, well that's a bit over the top, considering how much help they've offered the low paid over the last decade.

They brought in a minimum wage, which needed to happen; it was appalling that people were working for as little as £1 an hour. My mother-in-law knows people who made 60p an hour as recently as 1995. Bringing in a minimum wage simply brought the UK into line with most other civilized countries. I think they're Thatcherites in other ways, i.e. bleeding the middle class dry, ignoring education issues, and privatizing left right and center.

Quote:
Still, it is a bit of a surprising move given that history to make tax changes that make the least affluent worse off. The whole point of the 10% starting rate was to give the least well-off the opportunity to keep more of their money. The ones that benefit most are those earning above 20k but below the 40% threshold, which isn't a bad thing in itself, since that group are hardly in the stinking rich bracket. But I think the point is well-made, that group are one of the biggest and most likely to vote, it's just that changes like this usually happen just before an election.

I don't see how this will help Labour in the next election; please explain it to me. (I'm not being sarky, I'm genuinely curious.)


User currently offlineBanco From United Kingdom, joined Oct 2001, 14752 posts, RR: 53
Reply 12, posted (7 years 4 months 1 week 2 days 19 hours ago) and read 1185 times:

Quoting Disruptivehair (Reply 11):
think they're Thatcherites in other ways, i.e. bleeding the middle class dry, ignoring education issues, and privatizing left right and center.

Well, I don't really see how Thatcher bled the middle class dry, to be honest. They did very well indeed out of her. I don't disagree with you that this is what this government have been doing, just that I don't really recognise the similarity with Thatcher, who if anything, did the opposite.

As for education, we can argue till the cows come home over the merits or otherwise of what they've done, but they've undoubtedlly massively increased spending on education, again, different to the Thatcherite approach. And finally, with privatisation, I think that's just down to Thatcher winning the argument more than anything. Few people wish to see a mass return to nationalisation, except perhaps, where it has gone horribly wrong, like the railways.

Quoting Disruptivehair (Reply 11):
I don't see how this will help Labour in the next election; please explain it to me

Whether it will or won't help Labour at the next election is debatable, but here's how the thinking goes: The middle-classes have a feeling that they have been used as cash cows by Labour throughout their administration, with the 40% tax band catching ever more people due to the holding of thresholds. Equally, the iniquitous inheritance tax, which used to just encompass the well-off, now hits large numbers of people because of the increase in property prices, as does stamp duty.

So, the strong belief is that rather than getting money from the affluent, it's hitting the ubiquitous "man in the street". There have been ever greater screams of protest about over-taxation from this group more than any other, and they do form the core of the country. Now, this group also tend to be comprised of floating voters to a greater degree than any other, and much more likely to pay attention to which party is not going to hammer them tax-wise (what people say is important to them, like the environment, is somewhat different to how they vote, which is often on which group of bastards will hurt me least). Because of the nature of the electoral system (and the US is the same in this respect) many of the seats are to all intents and purposes pre-determined, and a swing one way or the other will have little impact. So you tend to get something like 150 that are critical to the outcome of an election.

In terms of who votes and who doesn't bother, the young, poorly educated and poorly paid vote in fewer numbers than the middle-classes or the elderly, so it's in the interests of any government hoping to be re-elected not to piss them off too much, which is why you often find the parties falling over themselves to appeal to "Mondeo-man" for example.

The Conservatives have made great strides over the last year or so in appealing to this constituency, and that's undoubtedly causing great concern to Labour - after all, it was this group switching away from the Tories who put them in power in the first place. As to the question of whether or not it would work, I somehow doubt it. This group have been hit hard by successive tax rises, and a small sop to them isn't going to erase the memory of all the others. Of these, I still think stamp duty and inheritance tax are the biggest problems, because to all intents and purposes, they are new taxes for them - they never had to pay them in the past.

Does that help?



She's as nervous as a very small nun at a penguin shoot.
User currently offlineDisruptivehair From United Kingdom, joined Mar 2007, 598 posts, RR: 0
Reply 13, posted (7 years 4 months 1 week 2 days 19 hours ago) and read 1171 times:

Quoting Banco (Reply 12):
Does that help?

Yes it does...basically it comes down to common sense and class warfare.


User currently offlineBanco From United Kingdom, joined Oct 2001, 14752 posts, RR: 53
Reply 14, posted (7 years 4 months 1 week 2 days 19 hours ago) and read 1168 times:

Quoting Disruptivehair (Reply 13):
Yes it does...basically it comes down to common sense and class warfare.

Common sense, yes. Class warfare, not really. "Middle class" really just refers to the strata of society who work hard and live reasonably well. It's the same in every country, just as in the US it would be insane to annoy them too much.



She's as nervous as a very small nun at a penguin shoot.
User currently offlineDisruptivehair From United Kingdom, joined Mar 2007, 598 posts, RR: 0
Reply 15, posted (7 years 4 months 1 week 2 days 18 hours ago) and read 1162 times:

Quoting Banco (Reply 14):
Common sense, yes. Class warfare, not really. "Middle class" really just refers to the strata of society who work hard and live reasonably well. It's the same in every country, just as in the US it would be insane to annoy them too much.

Yes, but Bush doesn't seem to have a problem with it. I think maybe they don't realize they're getting screwed; otherwise they might be more upset.  Confused


User currently offlineBanco From United Kingdom, joined Oct 2001, 14752 posts, RR: 53
Reply 16, posted (7 years 4 months 1 week 2 days 18 hours ago) and read 1160 times:

Quoting Disruptivehair (Reply 15):
I think maybe they don't realize they're getting screwed;

I thought Bush's tax cuts also benefitted the middle classes? Am I wrong?  Confused



She's as nervous as a very small nun at a penguin shoot.
User currently offlineDisruptivehair From United Kingdom, joined Mar 2007, 598 posts, RR: 0
Reply 17, posted (7 years 4 months 1 week 2 days 18 hours ago) and read 1155 times:

Quoting Banco (Reply 16):
I thought Bush's tax cuts also benefitted the middle classes? Am I wrong?

A bit, but it doesn't do them much good with income insecurity way way up. By income insecurity I mean white collar people losing their jobs (mainly to outsourcing) and having trouble getting another one that pays as well. The jobs that they get after being laid off almost always pay worse...often much worse. So in that way, yes...middle class people are getting screwed.


User currently offlinePope From , joined Dec 1969, posts, RR:
Reply 18, posted (7 years 4 months 1 week 2 days 17 hours ago) and read 1137 times:

Quoting Disruptivehair (Reply 17):
A bit, but it doesn't do them much good with income insecurity way way up. By income insecurity I mean white collar people losing their jobs (mainly to outsourcing) and having trouble getting another one that pays as well. The jobs that they get after being laid off almost always pay worse...often much worse. So in that way, yes...middle class people are getting screwed.

Assuming for the sake of argument what you are saying is true, how is that impacted by tax policy? A job goes overseas not because there are tax incentives to do so, but because the comparative cost advantage that the foreign jurisdiction provides? Isn't this just a result of a freemarket functioning?

I would argue that there are substantial tax disincentives for moving jobs offshore. Remember the cost of labor is fully deductible against income whether the job is in the US or abroad. If the US disallowed the deduction for foreign labor it would probably be in violation of GATT. Whenever markets become free-er the market equilibrium will cause short-term adjustments until resource allocation achieves an optimal result. Are you against free markets?


User currently offlineDisruptivehair From United Kingdom, joined Mar 2007, 598 posts, RR: 0
Reply 19, posted (7 years 4 months 1 week 2 days 17 hours ago) and read 1134 times:

Quoting Pope (Reply 18):
I would argue that there are substantial tax disincentives for moving jobs offshore. Remember the cost of labor is fully deductible against income whether the job is in the US or abroad. If the US disallowed the deduction for foreign labor it would probably be in violation of GATT. Whenever markets become free-er the market equilibrium will cause short-term adjustments until resource allocation achieves an optimal result. Are you against free markets?

That's kind of NOT the point I was making.

I'm against rampant outsourcing because it threatens my financial well-being. If you want to interpret that as being anti-free market, fine; I don't really care.


User currently offlinePope From , joined Dec 1969, posts, RR:
Reply 20, posted (7 years 4 months 1 week 2 days 17 hours ago) and read 1132 times:

At least in the US, the fundamental problem with our income tax system actually has nothing to do with income taxes. It has to do with our payroll tax which is imposed at the rate of 7.65% on all wages up to about $92,000/yr (the figure is annually indexed for inflation). Above $92,000 the rate falls to 1.65%. As such the tax is extremely regressive and many families (even those earning up to $50,000/year) pay more in payroll taxes than income taxes. (The payroll tax is also matched by the company for a total of 15.3% tax on payrolls).

With the variety of credits and deductions available to people whose AGI is less than $50,000/year, the federal income tax burden in the US is relatively light.

If either political party really wanted to provide a middle income tax cut, they'd reform the payroll tax system by flipping it on its head. Exempt the first $50,000 of wages and tax everything above it.


User currently offlinePope From , joined Dec 1969, posts, RR:
Reply 21, posted (7 years 4 months 1 week 2 days 17 hours ago) and read 1129 times:

Quoting Disruptivehair (Reply 19):
I'm against rampant outsourcing because it threatens my financial well-being. If you want to interpret that as being anti-free market, fine; I don't really care.

Whether you intended to make that point or not, it is the point that was made. How would you propose stopping outsourcing without restricting the free-market? I believe that the two are theoretical impossibilities.


User currently offlineDisruptivehair From United Kingdom, joined Mar 2007, 598 posts, RR: 0
Reply 22, posted (7 years 4 months 1 week 2 days 17 hours ago) and read 1127 times:

Quoting Pope (Reply 20):
If either political party really wanted to provide a middle income tax cut, they'd reform the payroll tax system by flipping it on its head. Exempt the first $50,000 of wages and tax everything above it.

YEAH! I agree with that. People always forget about the payroll tax and how regressive it is.

Quoting Pope (Reply 21):
Whether you intended to make that point or not, it is the point that was made. How would you propose stopping outsourcing without restricting the free-market? I believe that the two are theoretical impossibilities.

Your question assumes that I believe in unregulated, unfettered capitalism, hence it's a loaded question.

I don't believe there is a way to stop it REALISTICALLY, which is why I'm going to leave the I.T. field even though I enjoy it. I'm just sick of having this hanging over my head.


User currently offlinePope From , joined Dec 1969, posts, RR:
Reply 23, posted (7 years 4 months 1 week 2 days 16 hours ago) and read 1122 times:

Quoting Disruptivehair (Reply 22):
Your question assumes that I believe in unregulated, unfettered capitalism, hence it's a loaded question.

My question doesn't assume anything. For every level of regulation a move to a less regulated market results in a more rational allocation resources. That's true whether you move from 100% regulation to 0% regulation or from 89% to 70% (these are just relative figures) the market adjusts. In modern society it is impossible to have a completely unregulated market. I just can't happen.

Quoting Disruptivehair (Reply 22):
I don't believe there is a way to stop it REALISTICALLY, which is why I'm going to leave the I.T. field even though I enjoy it. I'm just sick of having this hanging over my head.

We have 3 IT persons on staff at my company. When the most junior one joined us, he asked me what recommendation I would give him with respect to career development. I'll pass along that same advice to you. Technically competent IT professionals are fairly common. I wouldn't characterize them as a dime a dozen but it's not far from that. Technically competent IT professionals who understand how IT functionality can affect business operations are very few and far between.

Too often IT professionals view technology as a goal onto itself. In the business context the sole purpose technology serves is to help achieve corporate goals - which in my mind is maximize long-term shareholder value. We make it a requirement that someone from IT sit in on business meetings because we want them to understand what we are trying to accomplish. By doing this we've been able to leverage our technology to conduct business quicker and more efficiently than ever before. I'm proud to say that we've tripled revenues in 5 years and not had to add a single person in our back office operations. That's only achievable because our IT department has done an amazing job of aligning our technology with our business processes (or reshaping our business processes to maximize the benefits of technology). I assure you I wouldn't trade any of my IT professionals for an outsource worker even if it saved me 100%. Good people are always accretive to income.


User currently offlineDisruptivehair From United Kingdom, joined Mar 2007, 598 posts, RR: 0
Reply 24, posted (7 years 4 months 1 week 2 days 16 hours ago) and read 1119 times:

Quoting Pope (Reply 23):
My question doesn't assume anything. For every level of regulation a move to a less regulated market results in a more rational allocation resources. That's true whether you move from 100% regulation to 0% regulation or from 89% to 70% (these are just relative figures) the market adjusts. In modern society it is impossible to have a completely unregulated market. I just can't happen.

I think your statement assumes that if I'm opposed to outsourcing, I must be opposed to the free market. Even people who say they're in favor of the free market often behave as if they're opposed to it; just look at how protectionist some industries are. So this is a question I'm not going to waste any more time on because I don't see how it's relevant.

Quoting Pope (Reply 23):
We have 3 IT persons on staff at my company. When the most junior one joined us, he asked me what recommendation I would give him with respect to career development. I'll pass along that same advice to you. Technically competent IT professionals are fairly common. I wouldn't characterize them as a dime a dozen but it's not far from that. Technically competent IT professionals who understand how IT functionality can affect business operations are very few and far between.

This is true, but if you don't understand how IT functionality affects business ops then you shouldn't be in the industry in my opinion.

Quote:
Too often IT professionals view technology as a goal onto itself. In the business context the sole purpose technology serves is to help achieve corporate goals - which in my mind is maximize long-term shareholder value. We make it a requirement that someone from IT sit in on business meetings because we want them to understand what we are trying to accomplish. By doing this we've been able to leverage our technology to conduct business quicker and more efficiently than ever before. I'm proud to say that we've tripled revenues in 5 years and not had to add a single person in our back office operations. That's only achievable because our IT department has done an amazing job of aligning our technology with our business processes (or reshaping our business processes to maximize the benefits of technology). I assure you I wouldn't trade any of my IT professionals for an outsource worker even if it saved me 100%. Good people are always accretive to income.

Too often, managers are only interested in increasing profit in the short term rather than having a robust I.T. solution, so they outsource. The company I work for, while it has brought back some offshored work, has recently offshored critical database administration functions. According to the DBAs, it is going to be an unmitigated disaster. They're probably being a tad dramatic (they're biased) but we'll just have to wait and see what happens. My guess is that service and quality will suffer, since it almost always does.


25 Oli80 : This is going off topic, but... I work in I.T. for a local government in the UK. We separate our I.T. department into 3 sub divisions for exactly thi
26 Banco : Aside from all the issues about a nation being responsible for all its people, at the most basic level you have to to avoid chaos at all levels up to
27 Post contains images Oli80 : So why are the lib dems suggesting that we should have local income tax? This would prevent the wealthy in London subsidising the relatively poorer p
28 Banco : How so? Their idea of local income tax is as a replacement for council tax, the funds going to the local authorities. It's just a way of raising the
29 Pope : Once again, I assume nothing. I'm just asking how one can oppose outsourcing without opposing free markets. You say that it is possible, I'm just ask
30 Post contains images Disruptivehair : I visited North Wales...it was lovely, and the people were friendly. My neighbor is Welsh, and when his parents visit I just love listening to them t
31 Braybuddy : Hmmm . . . Gordon Brown: didn't the Stranglers write a song about him back in the '70s? Gordon Brown texture like sun Lays me down with my mind he run
32 BHMBAGLOCK : The only way the middle class here may be screwed is if Congress doesn't raise the threshold for AMT. Bush has been asking for this for years btw. No
33 Disruptivehair : Heh...with a Republican congress willing to do anything he wanted them to from 2001 to early 2007, there's no excuse for it IMHO. The threshhold shou
34 BHMBAGLOCK : Unless you have 60 solid votes in the Senate it just doesn't work that way here. You need a super-majority in the Senate to have true control; things
35 Post contains links Banco : LOL. Yes, I think we'd all like something like that! Here's as good an simple a summary as you'll find. The trouble is, personal taxation as an emplo
36 Post contains images BHMBAGLOCK : I was hoping for something in English, not government BS. Pound # 34,601 is f*cking expensive! Is there not a graduated increase? Otherwise, that add
37 Banco : The higher rate is only charged on earnings above that level. The rest is taxed at the lower rate, currently 22%, falling to 20% after the budget. It
38 Post contains links BHMBAGLOCK : Here's a nice table from Forbes that is a couple of years old: http://images.forbes.com/images/global/2004/0524/074chart2_720_725.gif
Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
UK Budget To Hit Gas Guzzlers posted Mon Mar 19 2007 16:58:47 by Disruptivehair
A Stupid Income Tax Question. posted Thu Mar 8 2007 01:54:21 by LOT767-300ER
I'm Cancelling My Home Telephone (75.6% Tax Rate!) posted Wed Jul 5 2006 20:07:46 by Brick
Income Tax Question - Loss On Stock Exchange... posted Tue Oct 11 2005 02:51:00 by A332
Income Tax Question posted Fri Aug 12 2005 15:17:15 by UAL Bagsmasher
How Much Exactly Is Income Tax posted Thu Dec 9 2004 01:34:26 by Jfkaua
What Is Your Sales Tax Rate? posted Sat Oct 9 2004 05:27:49 by TheGov
Income Tax posted Sat Mar 2 2002 03:36:54 by Jm-airbus320
Top 10 Books Unlikely To Be Finished Reading In UK posted Mon Mar 12 2007 17:34:35 by Jimyvr
UK Mobile Phone Network 3 Abolishes Roaming Fees. posted Tue Jan 16 2007 11:17:45 by Cumulus