Taxing time for the poor as rich get off scot free
by Simon Basketter
Poor people pay too much tax, rich people pay too little, and really rich people and companies pay hardly any tax at all.
The poorest 20 percent of people lose nearly 40 percent of their total income in direct and indirect taxes, compared to 34.8 percent for the richest 20 percent. And that figure is for the rich who do pay tax.
Indirect taxation, such as VAT, hurts the poor most as workers spend a far higher proportion of their income on buying consumer goods.
At every point in the tax system the rich do better. For instance, national insurance contributions paid on weekly incomes in excess of £770 are taxed at just 1 percent.
The government admits that abolishing that limit would raise around £8.5 billion a year.
City firms used to cut their national insurance bill by paying staff bonuses in gold and antiques rather than cash. Once that was stopped, accountants set up trust funds to cut tax bills.
Salaries and bonuses are paid into an offshore trust. The trust then lends the cash, often interest-free, to the employee. There is no tax payable on a loan.
Rich individuals and companies use a myriad of mechanisms to avoid tax. Even though tax on profits is only 28 percent, corporations may be avoiding over £100 billion of taxes each year.
That's enough to double funding for the NHS, or to give every worker in the country £4,000. Or it could be used to abolish income tax for everyone who earns less than £34,000 a year.
One popular way of dodging tax is to register companies in offshore tax havens. This allows the rich to get away with paying minimal tax, if any.
Richard Branson's Virgin Group is based in the Caribbean, yet Virgin Rail gets a £500 million annual subsidy.
The most serious tax avoidance technique is transfer pricing, a dubious area where purchases and sales take place within the same company. Items are sold from high-tax countries to low ones, so cutting the amount of tax paid.
Many of the world's tax havens are British-run overseas territories, such as the Cayman Islands, Bermuda and British Virgin Islands, and crown dependencies such as Jersey, Guernsey and the Isle of Man.
The government isn't just doing nothing about offshore tax scams – it now owns some of the companies among them.
All of the banks that Gordon Brown bailed out have offshore ways of avoiding tax.
The Royal Bank of Scotland owns at least 128 companies in tax havens. And Lloyds TSB, a bank that is in the process of taking over HBOS, has more than 100 firms in tax havens.
Brown will announce tax cuts that will inevitably mean the wealthy will do better. Most hard-pressed workers would simply see any cut in their income tax disappear into their debts and bills.
The one thing he won't do is force the wealthy to pay tax that could fund our services and save our jobs.
http://www.socialistworker.co.uk/art.php?id=16493
One fair way for everyone, is a simple sales tax, It will be fair, it will be simple. Eliminate everything else. The rich will pay the majority of everything because they buy the most. If one complains about it not being fair, then their a loser.
My two cents la le da
Originally posted by flyUnityIf a rich person has a 1,000 times more money than a poor person, do you think they will buy 1,000 times more groceries? And you say "everything else (i.e. other forms of taxation... property, capital gains etc. etc.)" are "eliminated"? I fail to see how the "rich will pay the majority of everything" under your touchingly infantile proposal.
One fair way for everyone, is a simple sales tax, It will be fair, it will be simple. Eliminate everything else. The rich will pay the majority of everything because they buy the most. If one complains about it not being fair, then their a loser.
My two cents la le da
Originally posted by FMFUser pays where ever possible other than that a flat poll tax.
If a rich person has a 1,000 times more money than a poor person, do you think they will buy 1,000 times more groceries? And you say "everything else (i.e. other forms of taxation... property, capital gains etc. etc.)" are "eliminated"? I fail to see how the "rich will pay the majority of everything" under your touchingly infantile proposal.
Originally posted by WajomaWell I'll translate it for you. I am calling your ideology childlike, unrelated to the real world. People involved in debate about taxation in other countries have to be grown up about how the world works. You meanwhile trot out this smug, naive schtick again and again, safe in the knowledge it will never be tested because responsible adults in positions of responsibilty and elected democratically will never implement it. If you couldn't glean the critique contained in my previous zinger, it's because you are trapped forever in your pie-in-sky and callow little utopia. No offence intended.
Stunning critique, real zinger there.
Originally posted by FMFI have never made any claims about a utopia. There will always be the initiators of force and threats of force who think they have a superior world view on how you should live your life and use your property.
Well I'll translate it for you. I am calling your ideology childlike, unrelated to the real world. People involved in debate about taxation in other countries have to be grown up about how the world works. You meanwhile trot out this smug, naive schtick again and again, safe in the knowledge it will never be tested because responsible adults in positions of resp use you are trapped forever in your pie-in-sky and callow little utopia. No offence intended.
No offence taken.
Originally posted by stellspalfieNot really, they are just afraid of losing votes because people generally don't see the big picture and just think "tax is bad m'kay" without realizing tax pays for useful government services. People tend to stick where they are. Business tax is a different story, most countries with high income tax tend to have relatively low profit tax (for example, here the highest nominal income tax rate is 52%, vs. a 30% profit tax rate for businesses).
governments are scared to tax the rich, incase they just pack up and move their big fat pile of cash to another country, rockstar style. or move their buisness abroad. its the greed of of the few that stop this world from functioning.