UK top earner tax to be cut

40% from 50%

For discussion of politics, and what's going on in the world today.

Moderators: kiore, Blip, The_Metatron

Re: UK top earner tax to be cut

#41  Postby Strontium Dog » Mar 16, 2012 5:18 pm

mattwilson wrote:Some call it progressive because EVERYONE has to buy "stuff" and "stuff" attracts VAT so EVERYONE pays VAT.


What you have just described is a flat tax. Nobody on Earth would describe a flat tax as progressive save for the certifiably insane.

mattwilson wrote:In practice though someone earning £10-20K is going to spend nearly all of their money on "stuff" that attracts VAT


No they're not.
Liberal.

STRONTIUM'S LAW: All online discussions about British politics, irrespective of the topic, will eventually turn to the Lib Dem tuition fee pledge
User avatar
Strontium Dog
Banned User
 
Name: Dan
Posts: 13820
Age: 45
Male

Country: UK: Free May 2010-15
England (eng)
Print view this post

Re: UK top earner tax to be cut

#42  Postby ED209 » Mar 16, 2012 5:19 pm

mattwilson wrote:
Blip wrote:I confess that I know little of economics so would be (sincerely) interested to learn how an increase in VAT is progressive taxation.

Some call it progressive because EVERYONE has to buy "stuff" and "stuff" attracts VAT so EVERYONE pays VAT.

In practice though someone earning £10-20K is going to spend nearly all of their money on "stuff" that attracts VAT, whereas someone earning £100k+ is going to spend a small amount of their money on "stuff" that attracts VAT and save the rest for fattening themselves up financially.



Trotskyite! VAT is only levied on luxury items - decadent fripperies that the poor have no demand of such as clothing, shoes and petrol. Only the rich pay significant amounts in VAT on their investments properties polo ponies more expensive clothing and shoes. That's why they need a 10% cut in their marginal rate.
It's been taught that your worst enemy cannot harm you as much as your own wicked thoughts.
User avatar
ED209
 
Posts: 10417

Print view this post

Re: UK top earner tax to be cut

#43  Postby Strontium Dog » Mar 16, 2012 5:30 pm

So sad to see the childish nonsense people resort to when their arguments are knocked out of the park. You'll not rescue any credibility by prattling on about Trotskyites and fripperies.
Liberal.

STRONTIUM'S LAW: All online discussions about British politics, irrespective of the topic, will eventually turn to the Lib Dem tuition fee pledge
User avatar
Strontium Dog
Banned User
 
Name: Dan
Posts: 13820
Age: 45
Male

Country: UK: Free May 2010-15
England (eng)
Print view this post

Re: UK top earner tax to be cut

#44  Postby mattthomas » Mar 16, 2012 5:30 pm

Strontium Dog wrote:
mattwilson wrote:Some call it progressive because EVERYONE has to buy "stuff" and "stuff" attracts VAT so EVERYONE pays VAT.


What you have just described is a flat tax. Nobody on Earth would describe a flat tax as progressive save for the certifiably insane.

How in jesus' blue balls did I describe a flat tax, it's based on how much they buy, unless you some how inferred from what I wrote that everyone buys the same amount of "stuff"

Strontium Dog wrote:
mattwilson wrote:In practice though someone earning £10-20K is going to spend nearly all of their money on "stuff" that attracts VAT


No they're not.

I love this new magical world we've slipped into where things become true because you said it.
mattthomas
 
Posts: 5776
Age: 43

Print view this post

Re: UK top earner tax to be cut

#45  Postby Strontium Dog » Mar 16, 2012 5:34 pm

mattwilson wrote:How in jesus' blue balls did I describe a flat tax, it's based on how much they buy, unless you some how inferred from what I wrote that everyone buys the same amount of "stuff"


It's a flat consumption tax.

mattwilson wrote:I love this new magical world we've slipped into where things become true because you said it.


What you can assert without evidence can be dismissed by me without providing any evidence.

However, it remains true whether or not it is me saying it.
Liberal.

STRONTIUM'S LAW: All online discussions about British politics, irrespective of the topic, will eventually turn to the Lib Dem tuition fee pledge
User avatar
Strontium Dog
Banned User
 
Name: Dan
Posts: 13820
Age: 45
Male

Country: UK: Free May 2010-15
England (eng)
Print view this post

Re: UK top earner tax to be cut

#46  Postby Blip » Mar 16, 2012 5:40 pm

I'm sorry, but I'm still struggling here. Surely a tax on income - particularly with sensitive thresholds - is more progressive than a tax on expenditure, given that everyone needs to buy VATable items like washing powder, clothing, electricity and so on? And that these items absorb a higher proportion of a poor family's budget than that of a wealthy one? What am I missing?
Evolving wrote:Blip, intrepid pilot of light aircraft and wrangler with alligators.
User avatar
Blip
Moderator
 
Posts: 21724
Female

Country: This septic isle...
Jolly Roger (arr)
Print view this post

Re: UK top earner tax to be cut

#47  Postby ED209 » Mar 16, 2012 5:42 pm

The IFS say three things relevant to this thread:

1) VAT is regressive with regards to income (the normal definition of 'regressive taxation'):

Image

2) Households ranked by their spending, not income, pay proportionally more VAT the more they spend. This was the finding of their No Shit Sherlock study.

3) Raising the income tax allowance to £10k benefits middle- and high-earners the most:

Image

Now is it any surprise which of these statements is being seized upon by strontium dog to try and justify coalition policy once again, despite the libdems having precisely the opposite policy prior to their brief sniff of ministerial seats?
It's been taught that your worst enemy cannot harm you as much as your own wicked thoughts.
User avatar
ED209
 
Posts: 10417

Print view this post

Re: UK top earner tax to be cut

#48  Postby ED209 » Mar 16, 2012 5:46 pm

Strontium Dog wrote:
Blip wrote:I confess that I know little of economics so would be (sincerely) interested to learn how an increase in VAT is progressive taxation.


Always happy to oblige:

http://blogs.channel4.com/factcheck/fac ... e-tax/5438

There are two ways of looking at VAT, according to The Institute for Fiscal Studies (IFS): as a proportion of income, or expenditure. The IFS favours the latter, as it’s a better indication of long term household spending.

Over a lifetime, VAT will tend to be progressive because things that aren’t subject to the main rate of VAT are necessities that are consumed disproportionately by poorer households. And so increasing VAT on everything else will tend to hit the poor proportionately less, the IFS told FactCheck.

VAT is “slightly progressive”, the Institute’s senior research economist Stuart Adams said, “Particularly when you look at it over a lifetime.


I wouldn't hold your breath waiting for those arguing that VAT is regressive to support their assertions with evidence.



:lol: :lol: :lol: from your own link:

The claim

“If you look at the population and how much they spend, then VAT is progressive…Income tax and National Insurance would have a more damaging impact on poorer people in our society and it’s worth remembering that in the Budget I took substantial means to reduce the NI burden”

Chancellor George Osborne MP, BBC Radio 4’s Today programme January 4, 2011.


Image

Did you even read it, beyond the egregious quote-mine?

VAT is “slightly progressive”, the Institute’s senior research economist Stuart Adams said, “Particularly when you look at it over a lifetime.

“But income tax and National Insurance (NI) can potentially be much more progressive because they have a tax-free allowance for the first amount of earnings and because you have things like a higher rate of income tax which can be used specifically to target richer families.”
Last edited by ED209 on Mar 16, 2012 5:49 pm, edited 1 time in total.
It's been taught that your worst enemy cannot harm you as much as your own wicked thoughts.
User avatar
ED209
 
Posts: 10417

Print view this post

Re: UK top earner tax to be cut

#49  Postby Strontium Dog » Mar 16, 2012 5:49 pm

Blip wrote:I'm sorry, but I'm still struggling here. Surely a tax on income - particularly with sensitive thresholds - is more progressive than a tax on expenditure, given that everyone needs to buy VATable items like washing powder, clothing, electricity and so on? And that these items absorb a higher proportion of a poor family's budget than that of a wealthy one? What am I missing?


A tax on income might be more progressive than VAT, but that doesn't mean that VAT isn't progressive in itself.

ED209 wrote:Now is it any surprise which of these statements is being seized upon by strontium dog to try and justify coalition policy once again, despite the libdems having precisely the opposite policy prior to their brief sniff of ministerial seats?


VAT is progressive. The IFS is quite clear on this. With all due respect, I trust the opinion of the independent financial experts of the IFS more than I do the opinion of laypeople on the Internet who have an axe to grind with Liberal Democracy.
Liberal.

STRONTIUM'S LAW: All online discussions about British politics, irrespective of the topic, will eventually turn to the Lib Dem tuition fee pledge
User avatar
Strontium Dog
Banned User
 
Name: Dan
Posts: 13820
Age: 45
Male

Country: UK: Free May 2010-15
England (eng)
Print view this post

Re: UK top earner tax to be cut

#50  Postby Strontium Dog » Mar 16, 2012 5:52 pm

ED209 wrote: :lol: :lol: :lol: from your own link:

The claim

“If you look at the population and how much they spend, then VAT is progressive…Income tax and National Insurance would have a more damaging impact on poorer people in our society and it’s worth remembering that in the Budget I took substantial means to reduce the NI burden”

Chancellor George Osborne MP, BBC Radio 4’s Today programme January 4, 2011.


Image

Did you even read it, beyond the egregious quote-mine?


Quote-mine? The fuck? You're only allowed to quote a certain proportion of copyrighted work on this forum.

I don't understand what's so funny.
Liberal.

STRONTIUM'S LAW: All online discussions about British politics, irrespective of the topic, will eventually turn to the Lib Dem tuition fee pledge
User avatar
Strontium Dog
Banned User
 
Name: Dan
Posts: 13820
Age: 45
Male

Country: UK: Free May 2010-15
England (eng)
Print view this post

Re: UK top earner tax to be cut

#51  Postby Blip » Mar 16, 2012 5:56 pm

Strontium Dog wrote:
Blip wrote:I'm sorry, but I'm still struggling here. Surely a tax on income - particularly with sensitive thresholds - is more progressive than a tax on expenditure, given that everyone needs to buy VATable items like washing powder, clothing, electricity and so on? And that these items absorb a higher proportion of a poor family's budget than that of a wealthy one? What am I missing?


A tax on income might be more progressive than VAT, but that doesn't mean that VAT isn't progressive in itself.


Yes, I had thought that a tax on income would be more progressive than VAT. So if a Chancellor wanted to ensure equitable taxation, s/he might look in that direction? As I say, I'm no economist. But I had a little look at the current levels in the UK here and I'm struggling to understand why, in a time of economic hardship, the Chancellor is considering reducing the additional rate of 50%, which only applies to those earning over £150k after allowances.
Evolving wrote:Blip, intrepid pilot of light aircraft and wrangler with alligators.
User avatar
Blip
Moderator
 
Posts: 21724
Female

Country: This septic isle...
Jolly Roger (arr)
Print view this post

Re: UK top earner tax to be cut

#52  Postby Paul G » Mar 16, 2012 6:11 pm

Strontium Dog wrote: Nothing like incentives to get people off their arses


Image
User avatar
Paul G
THREAD STARTER
 
Name: Beef Joint
Posts: 9836
Age: 41
Male

England (eng)
Print view this post

Re: UK top earner tax to be cut

#53  Postby Paul G » Mar 16, 2012 6:13 pm

Strontium Dog wrote: an axe to grind with Liberal Democracy.


Image
User avatar
Paul G
THREAD STARTER
 
Name: Beef Joint
Posts: 9836
Age: 41
Male

England (eng)
Print view this post

Re: UK top earner tax to be cut

#54  Postby ED209 » Mar 16, 2012 6:15 pm

Strontium Dog wrote:
ED209 wrote:Now is it any surprise which of these statements is being seized upon by strontium dog to try and justify coalition policy once again, despite the libdems having precisely the opposite policy prior to their brief sniff of ministerial seats?


VAT is progressive. The IFS is quite clear on this.


An outright lie, I have already reproduced the graph from IFS data above. Your own channel 4 link judges osborne's "VAT is progressive" claim - parroted here, surprise surprise - to be a lie. There is no question that VAT is regressive with regards to income. I don't believe for one second that you are genuinely confused by the IFS's statements with regard to households grouped by expenditure and I am not going to waste any more time disproving your entrenched partisan position with trivialities such as evidence. It's not as though anyone take your claim seriously in any case :thumbup:

Strontium Dog wrote:With all due respect, I trust the opinion of the independent financial experts of the IFS more than I do the opinion of laypeople on the Internet who have an axe to grind with Liberal Democracy.


1) Among other things, I am a chartered accountant. Since you call me a layperson could you please disclose from what source, formal training or experience you derive your own tax expertise from?

2) Are you referring to this Liberal Democracy:

Image

nick clegg wrote:We will not have to raise VAT to deliver our promises. The Conservatives will. Let me repeat that: Our plans do not require a rise in VAT. The Tory plans do...Their tax promises on marriage and jobs may sound appealing. But they come with a secret VAT bombshell close behind.


....or this Liberal Democracy:

Image

nick clegg wrote:




Just so I know which axe to grind :lol:
It's been taught that your worst enemy cannot harm you as much as your own wicked thoughts.
User avatar
ED209
 
Posts: 10417

Print view this post

Re: UK top earner tax to be cut

#55  Postby ED209 » Mar 16, 2012 6:17 pm

Paul G wrote:
Strontium Dog wrote: an axe to grind with Liberal Democracy.


Image


I think I know what that is from and i love it i love it I LOVE IT !!!!!! :dance: :dance: :dance:

"Dick - I am VERY disappointed" :lol:

EDIT: Aw shit, it's something else :nono:
Last edited by ED209 on Mar 16, 2012 6:21 pm, edited 1 time in total.
It's been taught that your worst enemy cannot harm you as much as your own wicked thoughts.
User avatar
ED209
 
Posts: 10417

Print view this post

Re: UK top earner tax to be cut

#56  Postby Paul G » Mar 16, 2012 6:20 pm

Never realised you were a chartered accountant. I never got that far!

Anyway my simplistic explanation of how VAT is regressive.

I earn, for example, £10K a year and pay a rate of VAT the same as someone earning £200K. If it was income tax we'd all rightly call it regressive. Where's the confusion?
User avatar
Paul G
THREAD STARTER
 
Name: Beef Joint
Posts: 9836
Age: 41
Male

England (eng)
Print view this post

Re: UK top earner tax to be cut

#57  Postby ED209 » Mar 16, 2012 6:27 pm

That and an ex-liberal democrat, but I don't like admitting either unless really necessary :hide:
It's been taught that your worst enemy cannot harm you as much as your own wicked thoughts.
User avatar
ED209
 
Posts: 10417

Print view this post

Re: UK top earner tax to be cut

#58  Postby chairman bill » Mar 16, 2012 6:27 pm

Clegg.jpg
Clegg.jpg (108.33 KiB) Viewed 720 times
“There is a rumour going around that I have found God. I think this is unlikely because I have enough difficulty finding my keys, and there is empirical evidence that they exist.” Terry Pratchett
User avatar
chairman bill
RS Donator
 
Posts: 28354
Male

Country: UK: fucked since 2010
United Kingdom (uk)
Print view this post

Re: UK top earner tax to be cut

#59  Postby Strontium Dog » Mar 16, 2012 6:31 pm

ED209 wrote:
Strontium Dog wrote:VAT is progressive. The IFS is quite clear on this.


An outright lie, I have already reproduced the graph from IFS data above.


Astonishing the lengths you will go to to grind that axe.

Let's remind ourselves again what the IFS says:

We believe that increasing the standard VAT rate in the current system is mildly progressive when examined on a lifetime basis. The intuition for this is that, over a lifetime, poorer households spend a higher proportion of their (lifetime) income on goods that are zero or reduced rated in the current VAT system, such as food, children’s clothes and domestic fuel and power, and hence a lower proportion of their lifetime income on items that are subject to the standard VAT rate.

The common perception that VAT is regressive largely comes from noting that households with low current income often spend a lot – and therefore see a big cash rise in their living costs – relative to their income. But as explained in the previous answers, this is a weakness of looking at a snapshot of income.


As I said, the IFS is clear that increasing VAT is progressive, and anyone stating otherwise probably ought to ask themselves why they are twisting the truth.

ED209 wrote:Your own channel 4 link judges osborne's "VAT is progressive" claim - parroted here, surprise surprise - to be a lie.


The Channel 4 link does no such thing, because THAT'S NOT THE CLAIM THEY ARE DEALING WITH ON THAT PAGE.

What Channel 4's Factcheck is examining is the claim that VAT rises are better (more progressive) than increasing NI or income tax. NOT the claim that VAT is progressive, which is universally accepted as a truth (except for some small pockets of reality denial, of course).

Jesus fuck. If you can't even get something as basic as that right, you have no business participating in this thread.
Liberal.

STRONTIUM'S LAW: All online discussions about British politics, irrespective of the topic, will eventually turn to the Lib Dem tuition fee pledge
User avatar
Strontium Dog
Banned User
 
Name: Dan
Posts: 13820
Age: 45
Male

Country: UK: Free May 2010-15
England (eng)
Print view this post

Re: UK top earner tax to be cut

#60  Postby Panderos » Mar 16, 2012 7:01 pm

I once saw a treasury select committee meeting on TV (yeah, yeah, shove it) and the first thing they asked the head of the Institute of Fiscal Studies, who I believe now works for the Office for Budget Responsibility, was

Is VAT progressive or regressive?

And he said to them, "well, on one hand, some people say it's progressive because.....and on the other hand, some people say it's regressive because...." and left the panel thinking "well what the f*** do we do with that information?"

Economists :roll:

Here he is, Robert Chote

Image
"A witty saying proves nothing." - Voltaire
User avatar
Panderos
 
Posts: 2971

United Kingdom (uk)
Print view this post

PreviousNext

Return to News, Politics & Current Affairs

Who is online

Users viewing this topic: No registered users and 1 guest