BS: UK General Election

Subject: RE: BS: UK General Election
From: Nigel Parsons
Date: 20 Apr 17 - 09:20 AM

Sorry - Should make myself clearer. All I am saying is that instead of telling the 95% of us that own 5% of the wealth we should tighten our belts and give up our social care the government should be concentrating on the 5% who can well afford to give up a portion of what they have to maintain a good system. The theory of wealth 'filtering down' just does not work.
Yes, but there is only so much that can be done. Never mind the top 5%, the top 1% already pay more than 1/4 of the nation's income tax.


As for Jim Carroll's "Ding ding, I'm on the bus". I've already stated that I'm not anywhere near what could be considered 'wealthy'. so his comments can't be meant for me. (I'm part of the '95%' too)
But he does seem to respond (at length) without caring to read what he's responding to.

Subject: RE: BS: UK General Election
From: Raggytash
Date: 20 Apr 17 - 09:29 AM

Then just try and imagine how large their income must be ..........

............... poor little darlings.

Subject: RE: BS: UK General Election
From: Raggytash
Date: 20 Apr 17 - 09:35 AM

We must also realise that income tax is a direct taxation.

We are taxed irrespective of our income on all manner of other things, by indirect taxation.

We all need food, part of the cost of that food is the cost of transportation, fuel costs. That fuel is taxed and we as individuals all pay for that cost. If someone earns £100 a week or £10,000 a week we are all taxed the same.

VAT on items is non variable for instance, many other examples could be given.

The taxation system is not entirely fair or equal.

Subject: RE: BS: UK General Election
From: Dave the Gnome
Date: 20 Apr 17 - 09:36 AM

the top 1% already pay more than 1/4 of the nation's income tax.

That really does sum up what I am on about. Just consider how much they have left after paying their taxes. Do you really think and extra few pence on their tax will make a difference to their lives? Will they not be able to afford to buy food or medicine or heat their home? If they are contributing 25% of the total tax revenue, just how much do you think they are earning?

DtG

Subject: RE: BS: UK General Election
From: Nigel Parsons
Date: 20 Apr 17 - 09:57 AM

We all need food, part of the cost of that food is the cost of transportation, fuel costs. That fuel is taxed and we as individuals all pay for that cost. If someone earns £100 a week or £10,000 a week we are all taxed the same.

VAT on items is non variable for instance, many other examples could be given.

Not strictly true, nor accurate.
VAT is not non-variable. It can be (in UK) at rates of 20%, 5%, or Zero%. (Exempt VAT is another matter)
To a great extent VAT replaced purchase tax, or luxury tax. As such basic foodstuffs are zero-rated for VAT, so you don't pay VAT on them. Nor do you pay VAT on the transportation costs on that food.
Luxuries still attract VAT, and one would expect the poorest paid to be spending a higher percentage of their disposable income on necessities, rather than luxuries. So even the impact of VAT will be greater on the 'better off'.

Subject: RE: BS: UK General Election
From: Raggytash
Date: 20 Apr 17 - 10:21 AM

Nigel I am aware that most food is not taxed, however the company that produce the food pay tax, they pass on that cost to the consumer, the transportation of that food uses diesel, that diesel is taxed and the cost passed onto the consumer, all the on-costs of producer and distributor, even the shops own costs are passed onto the consumer.etc etc.

VAT is non variable in terms that we ALL pay the same amount for any given item. Simples.

Subject: RE: BS: UK General Election
From: Nigel Parsons
Date: 20 Apr 17 - 10:43 AM

This may need a little simplification.
VAT is 'Value Added Tax'. Each business in the chain accounts for tax on the value they have added to the transaction.
This is done by reclaiming the VAT they have been charged by their suppliers (from HMRC), and paying the VAT that they charge to their customers (to HMRC).
Where the supply they eventually make is zero-rated (basic foodstuffs, children's clothes, books etc.) they have no VAT to pay across to HMRC, but this does not prevent them reclaiming the VAT they have been charged by their suppliers. As such, there is no VAT included in the sale, even in the costs of making that sale.

Subject: RE: BS: UK General Election
From: Raggytash
Date: 20 Apr 17 - 10:51 AM

Agreed, but the producer, distributor, shopkeeper all pay other taxes. In order to make a profit, those costs are passed onto the consumer.

Subject: RE: BS: UK General Election
From: punkfolkrocker
Date: 20 Apr 17 - 11:02 AM

Welll.. thanks to brexit we will be paying vat on musical instruments and equipment
that are at the moment vat free from affordable European Music gear discount warehouse shops...

Of course... all this means SFA to millionair/investment vintage guitar collectors
like that ex pat Brit spiv git living in Monaco who bought Mick Ronson's Les Paul... 🙄

Subject: RE: BS: UK General Election
From: Jim Carroll
Date: 20 Apr 17 - 11:04 AM

"I've already stated that I'm not anywhere near what could be considered 'wealthy'. "
Doesn't matter Nigel - it's become a knee-jerk defence against a glaring social anomaly
Your own position is immaterial - that's what you are defending and that's what I'm criticising
It's not as if we haven't been here a thousand times.
Criticism of inequality is not, and never has been envy politics - it is simply a description of what is increasingly wrong with our society.
Jim Carroll

Subject: RE: BS: UK General Election
From: Nigel Parsons
Date: 20 Apr 17 - 11:42 AM

From: punkfolkrocker - PM
Date: 20 Apr 17 - 11:02 AM

Welll.. thanks to brexit we will be paying vat on musical instruments and equipment
that are at the moment vat free from affordable European Music gear discount warehouse shops...

How does Brexit affect that?
And why are they VAT free at present?

The only VAT free musical instruments I know of are for students.

Subject: RE: BS: UK General Election
From: Stanron
Date: 20 Apr 17 - 12:53 PM

punkfolkrocker wrote: Welll.. thanks to brexit we will be paying vat on musical instruments

I had to pay VAT on a guitar I bought in the USA a couple of years ago. Well before Brexit.

Subject: RE: BS: UK General Election
From: Backwoodsman
Date: 20 Apr 17 - 01:16 PM

Musical instruments are subject to VAT at Standard Rate - currently 20%. This applies to all instruments except those sold to students under the AIP Scheme. It includes instruments imported from outside the EU.

Subject: RE: BS: UK General Election
From: punkfolkrocker
Date: 20 Apr 17 - 01:40 PM

oops.. it's alright.. I'd only just woke up and wasn't thinking straight... 😳

Of course I was still half asleep and confusing it with additional import duties
which atm aren't an issue with Euro music purchases...

However, USA purchases used to be cost effective even after import duties and UK VAT paid on the total including shipping costs..

But sadly no longer so affordable any more..

Definitely wont be surprised if the same happens with purchases from Europe after brexit...

That'll hurt countless skint UK musicians...???

Subject: RE: BS: UK General Election
From: punkfolkrocker
Date: 20 Apr 17 - 02:21 PM

[just had me dinner]

back 10 / 15 years ago I was buying great bargain guitars from usa when we got about nearly 2 dollars for a quid
and shipping to UK was still reasonably affordable...

so how long after brexit before our EU neighbours get 2 quid for a Euro...??? 😜

Subject: RE: BS: UK General Election
From: Backwoodsman
Date: 20 Apr 17 - 04:14 PM

Some years ago, as a survival gift to myself following major surgery (twice), I bought a Martin OM-28 Marquis from a US dealer. I got a few cents over $2 to the £ and, with the 40% (yes, that's FORTY - FOUR-ZERO - PERCENT!) discount US dealers will give, even after adding shipping costs, import duty and VAT, I saved at least £800 compared to UK prices.

Sadly, those days are now gone, thanks to the BrexShit Buffoonery.

Subject: RE: BS: UK General Election
From: Backwoodsman
Date: 20 Apr 17 - 04:17 PM

Import duty is only about 4% on instruments, PFR. It's VAT (which is calculated on the value of the instrument plus shipping costs plus import duty! Tax on tax!) that's the killer, IMHO.

Subject: RE: BS: UK General Election
From: Bonzo3legs
Date: 20 Apr 17 - 05:32 PM

"thanks to brexit we will be paying vat on musical instruments and equipment that are at the moment vat free from affordable European Music gear discount warehouse shops..."

All non business to business sales from one EC member state to another VAT are charged to VAT at the rate applicable in the country of origin.

Subject: RE: BS: UK General Election
From: punkfolkrocker
Date: 20 Apr 17 - 06:07 PM

Bearing in mind I actually passed Economics & Accounting A levels.. and OND Business Studies 40 years ago
whilst playing in a hippy punk band...

My grasp of all the complexities of post brexit trades deals, exchange rates, tax, travel visa bureaucracy, etc..

is that skint UK musicians will be even more f@cked than ever before...!!! 😬

Subject: RE: BS: UK General Election
From: Dave the Gnome
Date: 21 Apr 17 - 04:14 AM

The point you are missing about VAT, Nigel, is that low earners spend a much higher percentage of their income on VAT than high earners do. This is what makes a tax on goods and services fair less equitable than a tax on income at source. VAT is the third largest source of income to the government. If they were to do away with it and add an extra few pence to the rate of top earners it would be a much fairer system.

DtG

Subject: RE: BS: UK General Election
From: Nigel Parsons
Date: 21 Apr 17 - 05:01 AM

Dave, I would have thought that low earners would pay a much lower percentage.
The basic costs of living:
Rent/mortgage: Exempt from VAT
Basic foodstuffs: Zero rated
Public transport: Zero rated

The percentage they spend on 'luxuries' (Beer, tobacco etc.) is their own choice. But the basics of life are VAT free.

Subject: RE: BS: UK General Election
From: Raggytash
Date: 21 Apr 17 - 05:36 AM

Nigel, If a company employs people they are paid a wage, out of those wages they pay tax. Their wages are paid from the cost of the goods they produce. The consumer buys those commodities and thus pays a share of the tax that the employee pays.

If the company makes a profit they would pay tax (one hopes). Those profits come from the cost of the goods they sell, thus the consumer by purchasing those goods almost pays a share of those taxes too.

The same applies to the distributor and the shopkeeper. Although there is no DIRECT taxation on some goods there is an indirect taxation of almost everything that is bought.

Those on the least income can thus pay proportionally more of their income in tax.

That element of tax is the same no matter what the income of an individual is, rich or poor.

Subject: RE: BS: UK General Election
From: Nigel Parsons
Date: 21 Apr 17 - 06:01 AM

The comment I was responding to was that low earners spend a much higher percentage of their income on VAT than high earners do.

Subject: RE: BS: UK General Election
From: Raggytash
Date: 21 Apr 17 - 06:20 AM

But VAT is only one element in a whole raft of taxes, most of which are unavoidable to the less well off.

In discussing personal taxation one cannot take VAT in isolation.

If anything those who are fortunate enough to have a large income, can with varying degrees of jiggery pokery, legal and illegal, avoid paying taxes that are due.

Subject: RE: BS: UK General Election
From: Dave the Gnome
Date: 21 Apr 17 - 06:24 AM

Nigel -

The percentage they spend on 'luxuries' (Beer, tobacco etc.) is their own choice. But the basics of life are VAT free.

Heating is not exempt. Fuel is not exempt. Sanitary towels are not exempt. Need I go on? And please don't tell me you are going to come out with the usual crap about the poor spending all their money on chips and beer!

Let's try a simple example to illustrate why they spend more of their disposable income on VAT and why taxing income at source would be fairer.

10 people

1 earns £1000
9 earn £100

9 pay income tax at 20% = £20 each = £180
1 pays 20% on £100 (£20) and 40% on £900 (£360) = £380

Total revenue to government = £560

All pay a £10 gas bill with 5% VAT = 50p each = £5

Total government revenue including VAT = £565

Disposable income of 1 = £620
Disposable income of other 9 = £80 each

% of disposable income paid on VAT

1= 0.08%
9= 0.625% - Nearly 8 times as much.

Now, let us remove VAT

Same people. Increase top income tax to 45%

9 people have same disposable income.
1 pays 20% on £100 (£20) and 45% on £900 (£405) = £425
His disposable income drops from £620 to £575.

Government income goes from £565 to £605
9 people are happy that their fuel bill has gone down by 50p
The government have more to spend on social care.
1 person pays £45 more tax but still has nearly 8 times more disposable income than the others.

Does this not seem fairer?

DtG

Subject: RE: BS: UK General Election
From: Nigel Parsons
Date: 21 Apr 17 - 07:21 AM

Dave,
That totally ignores Personal Allowances which have been steadily increased over recent years, keeping the really low paid out of paying income tax at all. While being reduced/cancelled for those on really high incomes.

Also the maths is dodgy, as you give them all a cost for 'Gas' but don't use this to reduce their disposable income.

Subject: RE: BS: UK General Election
From: Raggytash
Date: 21 Apr 17 - 07:26 AM

The tax free allowance threshold is the same for everyone irrespective of income Nigel, and as I have to point out there are many ways in which we all pay indirect tax, again irrespective of income.

Subject: RE: BS: UK General Election
From: Nigel Parsons
Date: 21 Apr 17 - 07:34 AM

The tax free allowance threshold is the same for everyone irrespective of income Nigel, and as I have to point out there are many ways in which we all pay indirect tax, again irrespective of income.
I linked to the facts above.
In answer to your comment I'll give an actual quote from that page:
The Personal Allowance goes down by £1 for every £2 of income above the £100,000 limit. It can go down to zero.

Subject: RE: BS: UK General Election
From: Raggytash
Date: 21 Apr 17 - 07:44 AM

I stand corrected Nigel, I just pity the poor little darlings earning so much.

Subject: RE: BS: UK General Election
From: Dave the Gnome
Date: 21 Apr 17 - 08:11 AM

It doesn't ignore anything, Nigel. There is no mention of those other things because they are not required. I have kept it simple to demonstrate that those on lower incomes pay a higher percentage of their disposable incomes in VAT.

Let us make it even simpler.

If my disposable income is £1000 and I pay £10 in VAT on goods and services I have used 1% of my disposable income on VAT.

If I purchase the same things yet have only £100 disposable income I have used 10% of my disposable income on VAT.

It really is quite simple. Now, can you tell me how someone who has more money pays more in VAT on the same goods and services?

DtG

Subject: RE: BS: UK General Election
From: akenaton
Date: 21 Apr 17 - 08:18 AM

What's the point of whining, that's the way modern capitalism survives......financial aspiration. Until we learn that is unsustainable and dangerous to society , we are up shit creek.

The problem is that nobody really wants the alternative, because we are under the illusion that we are free.......we could all win the game, but unfortunately the dice are heavily loaded.

Subject: RE: BS: UK General Election
From: Dave the Gnome
Date: 21 Apr 17 - 08:20 AM

...but I accept the point about disposable income. It was me using the wrong phrase. It should have been income after tax. But even if we reduce the amount of disposable income by the total gas bill everyone's disposable is reduced by the same amount and the same principle applies.

DtG

Subject: RE: BS: UK General Election
From: Teribus
Date: 21 Apr 17 - 08:59 AM

"First, a CEO who pays himself a hundred times more than the lady who cleans the toilets in his office suite is not working a hundred times harder. Ah, you say, but his job carries far more responsibility. Really? So, second point, how easy it is to throw around that word "responsibility." I take it that you're referring to responsibility for maintaining the profits so that the shareholders' dividends won't collapse, or responsibility for setting up a business model that pays producers as little as possible but which charges as high a price for the goods as possible." - Shaw

Number of points here:

1: The CEO doesn't pay himself, his salary along with any bonus payment or share options are NOT set by himself, they are offered and negotiated by the Board of Directors and by the shareholders.

The wages and terms of employment "the cleaning lady" (Why should it be a lady?) are set by Company pay scale, Agency rates, Union Agreements.

The "cleaning lady" works set hours, the CEO does not.

The "cleaning lady" is responsible for ensuring that she performs her own duties and responsibilities to the required standard. The CEO is responsible for ensuring that everyone working for the Company performs their duties and responsibilities to the required standard.

2: How about the "responsibility" of ensuring the company stays in business in relation to product, marketing, development and book in order that its employees still have jobs and continued employment.

Nice to see that you still cling like a limpet to your ideological belief in your clichéd stereotypes - obvious that you have never actually worked in any commercial environment.

Subject: RE: BS: UK General Election
From: punkfolkrocker
Date: 21 Apr 17 - 09:14 AM

.. funny that... when I last worked in a suit and tie for prestigious central London Chartered Surveyors..
the partners at the top were a bunch of unscrupulous self important greedy c@nts;
deliberately breaking the law on Nat insurance and terms of employment for all mere mortals below them in the office hierarchy... 🙄

.. at least they got done for it when they suddenly discarded our entire department,
and the benefits agencies discovered what they'd been doing to evade the law....

Subject: RE: BS: UK General Election
From: Nigel Parsons
Date: 21 Apr 17 - 09:26 AM

But those who have more disposable income will, presumably, spend more. It's no use looking at a figure the VAT on the goods they buy (being identical to those bought by someone on a totally different income) as a percentage of their disposable income. As a percentage that figure is meaningless.
For goods which are liable to VAT, they can choose how much of their disposable income they spend, and for everyone buying standard rated goods at the standard rated VAT they are paying 20%.
Those with a higher disposable income will probably spend more than those with a lower disposable income, and that spend is more likely to be on goods which have VAT levied on them (basically 'luxuries'). The poor are more likely to direct their spending toward 'necessities'.

In the circumstances you quote, the percentages you choose are meaningless.

Subject: RE: BS: UK General Election
From: Teribus
Date: 21 Apr 17 - 09:42 AM

Gnome, refactor your model to reflect the reality of the situation with regard to benefits, allowances and taxes where 60% of the taxpayers take out more in benefits and allowances than they pay in tax. That is the situation in the UK at present. According to reports at the moment the break even threshold is £38,000 per year.

Income Tax represents a tiny fraction of HMRC revenue. The constant whine about taxing the rich leads ultimately to capital flight and you end up taking in less than you did before, the measure becomes self defeating.

By the way any time "fair" is mentioned, nobody ever states who decides what "fair" is.

Subject: RE: BS: UK General Election
From: Dave the Gnome
Date: 21 Apr 17 - 10:00 AM

Income Tax represents a tiny fraction of HMRC revenue

Is it really Teribus? According to this infographic Income tax and national insurannce made up 51% of government income with non direct taxes beeing 42% and business/other being 7%. Have you anything to challenge that?

I agree that it is difficult to get 'fair' quantified but 5% of the people owning 95% of the wealth does not seem to be very equitable does it?

Nigel - I am still not getting my point across am I? Regardless of who spends what, taxing everyone at the same rate as happens with VAT is, to my mind, not a good thing. You believe it is. I suspect we will never agree.

Cheers

DtG

Subject: RE: BS: UK General Election
From: punkfolkrocker
Date: 21 Apr 17 - 10:08 AM

While there are still tories who believe the 'poor' don't deserve to own any luxuries, even TVs and mobile phones..... 😣

Subject: RE: BS: UK General Election
From: Nigel Parsons
Date: 21 Apr 17 - 10:14 AM

Nigel - I am still not getting my point across am I? Regardless of who spends what, taxing everyone at the same rate as happens with VAT is, to my mind, not a good thing. You believe it is. I suspect we will never agree.
But you are advocating increasing income tax for the rich, to reduce VAT on fuel to 0% for everybody. Is that not taxing everyone at the same rate on that commodity?
Would it make a difference to your view if VAT on fuel was reduced to 0% (not an option I believe we have while remaining part of the EC) but an additional levy placed on the power firms, which they would pass on to the public in the form of higher prices all around.

Subject: RE: BS: UK General Election
From: Dave the Gnome
Date: 21 Apr 17 - 10:19 AM

Just had a thought - Maybe 'fair' should be that everyone has enough to live rather than just survive? Works for me.

Second thought while I was typing - No need to refactor anything but I will rephrase. If someone with £10 has to buy an item for £1.20 and 20p of that is VAT then they have used 2% of their money on VAT. If someone with £100 buys the same item they have only used 0.2% of theirs. The poorer person has paid 2% in tax while the richer one has only paid 0.2%. It would be much fairer to remove this inequality and simply apply income tax more evenly. I am lucky enough to be well over the mentioned threshold (but well under the one where my allowances reduce I must add!) and I would happily pay an extra 5% on my higher earnings. Maybe others think differently and that is why we constantly get reduction of taxes for the rich and austerity for the poor.

Sigh...

DtG

Subject: RE: BS: UK General Election
From: Raggytash
Date: 21 Apr 17 - 10:22 AM

If the tax rate on fuel was 0% it's not really being taxed is it.

Subject: RE: BS: UK General Election
From: Nigel Parsons
Date: 21 Apr 17 - 11:07 AM

Second thought while I was typing - No need to refactor anything but I will rephrase. If someone with £10 has to buy an item for £1.20 and 20p of that is VAT then they have used 2% of their money on VAT. If someone with £100 buys the same item they have only used 0.2% of theirs. The poorer person has paid 2% in tax while the richer one has only paid 0.2%. It would be much fairer to remove this inequality This is NOT a tax inequality. The percentage relates to the cost of the item bought and is 20% of the net price.
The person with the higher income can buy many more of these items than the person on the lower income, but the total number bought will be in relation to their available funds. No matter how many of these items are bought the tax rate (VAT) on them is still going to be 20%.

Subject: RE: BS: UK General Election
From: Nigel Parsons
Date: 21 Apr 17 - 11:24 AM

If the tax rate on fuel was 0% it's not really being taxed is it.
For VAT purposes 0% is considered a rate of VAT. This distinguishes between 'Zero-rated' and 'Exempt' supplies.

And, if we're thinking of motor fuel, it is already liable to 'fuel duty', which, to most people, is just another form of tax.

Subject: RE: BS: UK General Election
From: Teribus
Date: 21 Apr 17 - 11:33 AM

NIC is paid by both employer and employee and the Treasury has a larger number of income streams than are shown in your infographic.

Subject: RE: BS: UK General Election
From: Dave the Gnome
Date: 21 Apr 17 - 12:59 PM

I am interested in what those extra streams are that make you think that income tax is a 'tiny fraction' of HMRC revenue, Teribus. Can you elaborate?

Nigel. I know what I am on about. You cannot see it. No point continuing.

DtG

Subject: RE: BS: UK General Election
From: Steve Shaw
Date: 21 Apr 17 - 01:44 PM

"The constant whine about taxing the rich leads ultimately to capital flight and you end up taking in less than you did before, the measure becomes self defeating."

So the rich are holding us to ransom then. Now where have I heard that before...🤔

Subject: RE: BS: UK General Election
From: McGrath of Harlow
Date: 21 Apr 17 - 07:45 PM

What would be the problem with abolishing VAT entirely, and relying on increased income tax to replace it?
...................

As for the suggestion that the only reason anyone would want a more responsiblt job is because of getting much higher payment, that just isn't how a lot of people work. Having more say over what goes on, and knowing you can make a difference is rewarding in itself. In any unpaid activity there is no problem in finding people who are eager to take a leading role.   

Determining which of a number of candidates is best equipped for a leading role is nothing to do with who wants the most money.    There is no reason to assume that by reducing the money you would be particularly likely to eliminate the people who are best equipped to do the job.

Subject: RE: BS: UK General Election
From: Steve Shaw
Date: 21 Apr 17 - 08:04 PM

There wouldn't be a problem if it wasn't for those right-wing ideologues who are so desperate to see income tax reduced. You could say the same about council tax, which is just a blunt instrument for increasing the tax take whilst pretending that you're keeping income tax low. Oh yes, council tax, in theory, allows the victim to explore local accountability, but who really cares? The bottom line is how much the government takes off us in overall taxes. That will change hardly at all, but oh, how easily people are taken in...

Subject: RE: BS: UK General Election
From: McGrath of Harlow
Date: 21 Apr 17 - 09:35 PM

When I pay my taxes that is to enable public services which I value to have the resources they need, and indeed, to exist at all. Those services are my social wage, which has probably been the most important part of my overall wage.

Talking about governments "how much the government takes off us in taxation" is to stand the true reality on its head. Abolish taxation and most of us would be in poverty. I'd be dead, for a start.

Subject: RE: BS: UK General Election
From: Greg F.
Date: 22 Apr 17 - 09:55 AM

"Taxes are what we pay for civilized society."

            - Justice Oliver Wendell Holmes