Lib Dem's Fairer Tax

[Quartz]

So Clegg has promised to raise the tax-free allowance to £10K.

IMO this is a good thing. It basically means that people on minimum wage won't pay tax. Which is right and proper: it is the minimum wage, after all.

 

[Matt S]

There is an interesting discussion on Left Foot Forward about the effects of this. While it would increase the income of everyone except the richest 10%, it would increase your income more the richer you are, basically, and increase income inequality somewhat.

http://www.leftfootforward.org/2010/03/lib-dem-tax-policy-fails-the-fairness-test/

 

[scifisam]

There is an interesting discussion on Left Foot Forward about the effects of this. While it would increase the income of everyone except the richest 10%, it would increase your income more the richer you are, basically, and increase income inequality somewhat.

http://www.leftfootforward.org/2010/03/lib-dem-tax-policy-fails-the-fairness-test/

Can anyone explain to me how rich people would gain more from this than poor people? That doesn't make sense.

And where the hell have they got their income deciles from? Someone who earns £10k would be £13.56 per week better off (see here), but according to that graph, someone earning £10k is close to the sixth decile (out of ten).

 

[Quartz]

There is an interesting discussion on Left Foot Forward about the effects of this.

Interesting, but not really relevant. It helps the poorest and that seems good to me.

 

[butchersapron]

Can anyone explain to me how rich people would gain more from this than poor people? That doesn't make sense.

IT would only effect 6% of low-income tax-payers for starters. The rest is tax cut for those well above 10 grand.

edit: heres the key quote:

“people on low incomes no longer have to pay any income tax” (Liberal Democrat Tax Plans, 30 November 2009), our modelling suggests that, of the £17.8 billion cost of the
policy, only around £1 billion (6% of the total cost) is actually spent lifting people on low incomes out of income tax. The remaining £16.8 billion (94% of the total) is spent cutting
taxes for middle- and higher-income households.

Just noticed from the date on that, it's yet another re-announce

 

[scifisam]

IT would only effect 9% of low-income tax-payers for starters. The rest is tax cut for those well above 10 grand.

How do you get to that £9% figure?

How do you calculate that those earning well above ten grand would benefit more than those earning ten grand? Maybe I'm being stupid - I just don't see how that can work, and I can't be arsed working out how much tax would be paid by people over the current lower threshhold.

Sure, anyone earning under £6,475.00 wouldn't benefit, but they already pay no tax, so you can't exactly lower their tax rates.

 

[mentalchik]

So Clegg has promised to raise the tax-free allowance to £10K.

IMO this is a good thing. It basically means that people on minimum wage won't pay tax. Which is right and proper: it is the minimum wage, after all.

Minimum wage is just over 11K if working full time !

 

[trevhagl]

How do you get to that £9% figure?

How do you calculate that those earning well above ten grand would benefit more than those earning ten grand? Maybe I'm being stupid - I just don't see how that can work, and I can't be arsed working out how much tax would be paid by people over the current lower threshhold.

Sure, anyone earning under £6,475.00 wouldn't benefit, but they already pay no tax, so you can't exactly lower their tax rates.

Another thing i can't 'get' is, if the Tory cunts are above labour in the polls, how come they say Labour will have the majority?

 

[butchersapron]

How do you get to that £9% figure?

How do you calculate that those earning well above ten grand would benefit more than those earning ten grand? Maybe I'm being stupid - I just don't see how that can work, and I can't be arsed working out how much tax would be paid by people over the current lower threshhold.

Sure, anyone earning under £6,475.00 wouldn't benefit, but they already pay no tax, so you can't exactly lower their tax rates.

9% was a mistake 6% is what it should read. And it';s not my figures - it's figures from the actual report. Their thinking is that £17.8 billion of tax cuts that mean only the poorest only get 6% of them get mean that the majority of the benefits are taken by those outside that poorest group.

 

[agricola]

9% was a mistake 6% is what it should read. And it';s not my figures - it's figures from the actual report. Their thinking is that £17.8 billion of tax cuts that mean only the poorest only get 6% of them get mean that the majority of the benefits are taken by those outside that poorest group.

Well yes, but the poorest groups pay little or no direct tax anyway, so tax cuts will not affect that group.

 

[butchersapron]

So it's a just a tax cut for those not on min wage under the guise of helping the poorest.

 

[agricola]

So it's a just a tax cut for those not on min wage under the guise of helping the poorest.

Well yes... and its not a bad thing for them to do it, it is probably the best idea any of the three parties have had with regards to taxation in this election campaign to date. Its not as if those who would benefit from this are caning it in anyway.

 

[scifisam]

9% was a mistake 6% is what it should read. And it';s not my figures - it's figures from the actual report. Their thinking is that £17.8 billion of tax cuts that mean only the poorest only get 6% of them get mean that the majority of the benefits are taken by those outside that poorest group.

What I'm asking is, how did they come up with those figures?

Minimum wage is currently 10,556 (assuming 35 paid hours per week). They currently pay £816.20 a year in tax (£15.70 per week). Under this new proposal, they'd pay nothing. And there are an awful lot of people earning just over minimum wage who'd benefit in a similar way. It is a tax cut for those on minimum wage.

 

[butchersapron]

What I'm asking is, how did they come up with those figures?

Minimum wage is currently 10,556 (assuming 35 paid hours per week). They currently pay £816.20 a year in tax (£15.70 per week). Under this new proposal, they'd pay nothing. And there are an awful lot of people earning just over minimum wage who'd benefit in a similar way. It is a tax cut for those on minimum wage.

Here's their report

Just pointing out that some people on min wage will benefit doesn't deal with the larger point, of the relational aspect of it. That's not the point at issue. It's a tax cut for those who earn over 10 grand to greater degree then for those who under the full 10 grand plus by definition.

 

[Matt S]

Well, yes, it's a tax cut for pretty much everyone, so logically it is also a tax cut for those on the minimum wage. The point is that it is being sold as targetted at low-income earners, when it isn't. It spends £17 billion, the large majority of which will accrue to the well-off.

Matt

 

[tbaldwin]

Well, yes, it's a tax cut for pretty much everyone, so logically it is also a tax cut for those on the minimum wage. The point is that it is being sold as targetted at low-income earners, when it isn't. It spends £17 billion, the large majority of which will accrue to the well-off.

Matt

The point is where will it have more impact? A few quid is not going to make much difference to someone on over £100,000. It will make a difference to people on lower incomes.
Personally id love to see VAT go down to 10% and some people would say that would have more effect on the rich as they can buy more things. But the impact would be much greater on people on lower incomes who couldnt afford so much.

 

[FridgeMagnet]

The point is where will it have more impact? A few quid is not going to make much difference to someone on over £100,000. It will make a difference to people on lower incomes.
Personally id love to see VAT go down to 10% and some people would say that would have more effect on the rich as they can buy more things. But the impact would be much greater on people on lower incomes who couldnt afford so much.

There are ways to give people on lower incomes a few more quid without also giving proportionately more to people on higher incomes though.

Actually I don't think VAT is a good tax either - which may be the first time I've agreed with you on something that I can remember

 

[scifisam]

Here's their report

Just pointing out that some people on min wage will benefit doesn't deal with the larger point, of the relational aspect of it. That's not the point at issue. It's a tax cut for those who earn over 10 grand to greater degree then for those who under the full 10 grand plus by definition.

TY.

It's really, really, really weird of them to criticise the Lib Dem's tax proposal for not helping those who already pay under the current personal allowance. It also points out that it won't help people who are sick or unemployed. You can't lower tax for people who don't pay tax.

According to their graph, minimum wage is close to the sixth decile. How much do people in the ninth decile earn, then?

 

[butchersapron]

There are ways to give people on lower incomes a few more quid without also giving proportionately more to people on higher incomes though.

Actually I don't think VAT is a good tax either - which may be the first time I've agreed with you on something that I can remember

Here's an easy one, don't make it an 'allowance'. Just don't tax people on min-wage full-stop - without letting those earning more off.

 

[butchersapron]

TY.

It's really, really, really weird of them to criticise the Lib Dem's tax proposal for not helping those who already pay under the current personal allowance. It also points out that it won't help people who are sick or unemployed. You can't lower tax for people who don't pay tax.

That in itself shows that it's a shift from 'the public purse' (sorry for shit phrase) to the private purse of those who can best afford it already. The fact that it won't help the poorest who pay no/ittle tax is the central thrust of the report - it's not their achilles heel!

 

[tbaldwin]

There are ways to give people on lower incomes a few more quid without also giving proportionately more to people on higher incomes though.

Actually I don't think VAT is a good tax either - which may be the first time I've agreed with you on something that I can remember

Here is another chance to agree with me....you creep...

The best way to ensure the better off pay more is through income tax and inheritance tax rising. IMV there should be no income tax paid on anything under £20,000 a year but above that it should rise fairly steeply.
And inheritance tax should be at least 50% on anything over £200,000.

 

[FridgeMagnet]

Here's an easy one, don't make it an 'allowance'. Just don't tax people on min-wage full-stop - without letting those earning more off.

I was going to say that they're not going to do something like that with all the Tory marginals, but really? there are ways they could sell it, if they actually wanted to.

 

[FridgeMagnet]

Here is another chance to agree with me....you creep...

The best way to ensure the better off pay more is through income tax and inheritance tax rising. IMV there should be no income tax paid on anything under £20,000 a year but above that it should rise fairly steeply.
And inheritance tax should be at least 50% on anything over £200,000.

I'm all for income tax and inheritance tax. Let's not go into the details though, it might spoil the happy glow of comradeship.

 

[tbaldwin]

I'm all for income tax and inheritance tax. Let's not go into the details though, it might spoil the happy glow of comradeship.

Unity on a minimum programme, i can go along with that....

 

[Quartz]

Just pointing out that some people on min wage will benefit doesn't deal with the larger point, of the relational aspect of it. That's not the point at issue. It's a tax cut for those who earn over 10 grand to greater degree then for those who under the full 10 grand plus by definition.

But that's simply not relevant. You're letting the quest for the perfect get in the way of the good enough.

My last job was just about minimum wage. The extra money would have made a considerable difference to me.

 

[butchersapron]

It's utterly 100% relevant in terms of the selling of the proposed new (i.e old) policy. Did i (or the critical report) say that it wouldn't benefit min wage earners? No, the point was that it would by definition benefit those who earn more than 10 grand as per normal, more than the poorest, and that it's being sold as being designed to help those who are the poorest - it would not. Why not support people on min wage not paying tax at all without handing out £16 billion quid to everyone else?

 

[scifisam]

It's utterly 100% relevant in terms of the selling of the proposed new (i.e old) policy. Did i (or the critical report) say that it wouldn't benefit min wage earners? No, the point was that it would by definition benefit those who earn more than 10 grand as per normal, more than the poorest, and that it's being sold as being designed to help those who are the poorest - it would not. Why not support people on min wage not paying tax at all without handing out £16 billion quid to everyone else?

I agree that it is relevant, but this proposal would mean that full-time workers on minimum wage paid barely any tax at all. It would help the poorest.

 

[butchersapron]

So to do that we give £17 billion n tax cuts to those over min wage to make a £1 billion tax cut for those on min wage. Is there any better way to do this?

 

[scifisam]

So to do that we give £17 billion n tax cuts to those over min wage to make a £1 billion tax cut for those on min wage. Is there any better way to do this?

Well, the report above was predicated upon the 20% tax threshhold stopping at 43k rather than the current 37k. Making that lower (or at least keeping at it the current level) would be a start. .

But if you just said 'minimum wage earners don't pay tax' then that'd create a terrible poverty trap.

Somebody who earns £15k is earning almost 50% as much as someone on minimum wage but they're hardly rolling in it.

 

[weltweit]

The point is moot surely, it is unlikely the LibDems will be able to implement it unless they somehow wield a massive amount of power in a hung parliament.