Same here! That's a crazy idea and would in fact result in me going bankrupt quite quicklyOriginally Posted by dominion
Same here! That's a crazy idea and would in fact result in me going bankrupt quite quickly
@Hill_Runner on twitter
I don't think the guy in the street will be looking at the figures and debating whether or not the wealthy are paying more tax even if he is getting a bit extra in his pocket.He will simply see a cut in income tax for the rich when employment is rising and he is struggling to pay bills. Politically the Tories have shot themselves in the foot and the lib dems have given them the bullet to do it. It just shows how politically out of touch Cameron is. These tax cuts will come in the run up to the election just in time for labour to remind voters where Tories priorities lie. Cameron's made the same political cock-up with the NHS irrespective of whether the reforms are an improvement or not. The sad thing is the current opposition is so feeble the Tories will probably get away with it.
Yep, but would Governments spend the same if everyone shared the burden and not just the rich?
Dom and Dan
the figures I threw out were purely arbitrary - I'd be quite happy to look at a slightly lower % rate - it's the principal of the system that matters.
However for someone earning 30K per annum and paying Class A NI contributions under the 2012 regime they would take home £1897.04 per month and under the one I drafted it would be £1833.33.
So I doubt that my system would bankrupt the typical average earner.
But I cannot see why someone who earns 30K should be taxed at 20% on every additional £1 they earn for say bonus or overtime, but someone earning 40K is taxed at 40%.
Where is the incentive to do the overtime for the 40K earner when they lose so much of each additional pound.
What I picked up from this budget was a move towards some consistency in the tax system, that will make the current trend for the wealthy moving oncome from a higher tax system to a lower one unnecessary.
Simplification must benefit everyone and also make tax avoidance or evasion more difficult.
But ultimately I do think they have missed a trick. I would rather take the money used to reduce Corporation Tax to reduce employers NI. As I have said before employers NI is a tax on jobs and so all employers would benefit - but not all benefit from the corporation tax move.
But I do see moves towards the abolishing of NI altogether and I would welcome that.
What is corporation tax? When do they pay it? What is it actually based on?
Not playing devil's advocate, I'm just thick with all these terms, only just learnt Laffer curve from page 1!!
Do you really think so? From what I've read about Osborne he is a fairly right wing Tory but not of the traditional breed. On the one hand he is a typical small state Conservative but on the other he is socially very liberal. Given a free hand (i.e. Tory overall majority) I'm sure he would have restored the maximum 40% rate.
It's based on profits, i.e Income minus expenditure.
The complicated element is being able to carry forward losses from previous years.
I think that when we look back in 10/15 years, Osborne will be seen as a great, if unpopular, chancellor
Corporation tax is a tax on company profits. Companies pay it 9 months after their year end. The Government's aim seems to be to reduce it as much as they can in order to encourage private sector growth and foreign investment in the UK. It has been steadily reduced over the last few years and the latest change will bring it to 24%. This seems quite low but is still double the rate in Ireland. Part of the success story of Ireland (before they went crazy with property speculation and dodgy loans) was attracting global companies like Google to base their European headquarters in Ireland. This created lots of jobs and revenue for the Irish Exchequer.
With respect to Ireland, the EU is putting them under massive pressure to raise Corporation Tax rates in return for bailout money - the UK has them firmly in their sights with this budget
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