Cyclone Posted August 14, 2011 Share Posted August 14, 2011 The top 10% earners pay around 50% of the tax income of this country. The top 1% pays roughly 25% and the next 9% pays roughly 9%. Indeed, those are the figures I was alluding to. http://en.wikipedia.org/wiki/Income_in_the_United_Kingdom To be in the top 10% you need to earn more than approx £45k/annum. To be in the top 1% more than 150k approx. If you consider household income instead of individual, you need a NET household income of 75k+ to be in the top 1%. This is a particularly interesting table IMO; All taxpayers Top 10% to 1% Top 1% to 0.1% (adults) Top 0.1% Number 29.5 Million 4.21 Million 421,000 42,000 Entry level for group £5,093 £35,345 £99,727 £351,137 Mean value for group £24,769 £49,960 £155,832 £780,043 Average income tax paid £4,415 £10,550 £49,477 £274,482 %of personal income tax revenue 27.6% 8.6% 4.2% Link to comment Share on other sites More sharing options...
Mecky Posted August 14, 2011 Share Posted August 14, 2011 And I'm not blinded by being a contractor. I've been employed before, I'm now self employed, either way I paid the required amount of tax and only the required amount. They already pay more than you, but it's not enough. How do you justify this statement? No, it proves that they (the top 10% of earners in the country, which I expect includes some people on this forum), pay vastly more than you would expect in tax already. But some people (you included) still begrudge that they earn more than you and think they should pay even more in tax. And whilst you keep referring to multi millionaires and people who are paid hundreds of thousands a week, this conversation is about the other 99% of high earners who earn more than 150k/annum, but vastly less than the few examples you keep using. Why have you spat your dummy out? Link to comment Share on other sites More sharing options...
Cyclone Posted August 14, 2011 Share Posted August 14, 2011 I haven't. I just wanted to find out what these 'schemes' were that were being used back on page 2 or 3 as justification for why the 50% rate shouldn't be abolished. Turns out they don't really exist though. Personally I'd want to see whether the 50% rate increased the tax income or not and use that as the basis for keeping it or not. Link to comment Share on other sites More sharing options...
I1L2T3 Posted August 14, 2011 Share Posted August 14, 2011 I haven't. I just wanted to find out what these 'schemes' were that were being used back on page 2 or 3 as justification for why the 50% rate shouldn't be abolished. Turns out they don't really exist though. You've done absolutely nothing to prove they don't exist. All you've done is offer a hoity-toity and blinkered view of the situation based on your current situation as an IT contractor who happens to have an accountant who offers some advice on reducing your tax. You ain't rolling with the big boys though Link to comment Share on other sites More sharing options...
I1L2T3 Posted August 14, 2011 Share Posted August 14, 2011 I take it that means no you haven't? It's not naïve to disagree with your rather socialist outlook, if anything you've got a rather blinkered view of the subject. Maybe you should consider the people who aren't footballers and rock stars, see if your opinion changes. The government could simply the entire tax regime if they wished, whilst ever they don't, tax avoidance is an entirely legitimate and sensible thing to practice. I'll say again that I assume that you don't voluntarily pay any extra tax? Why do you expect people who earn more to behave differently? Now who's being naïve? It's nice to have had your expert opinion on my tax situation, and I certainly pay my accountant less than that. But the fact remains that most of the means of avoidance you've managed to think of are available to me and indeed you. The fact that pension contributions were one of the first examples makes it clear how laughable the subject really is, the only other examples you've come up with, companies (ie being self employed), trust funds (applicable to passing money on, not pay) and residence status (something with a well defined set of rules) are just silly, they're not schemes or loop holes, they're just how the system works. Oh, and all this was your attempt to justify keeping the 50% tax rate on those earning 150k+... The fact that these people according to you use these loop holes to avoid paying tax anyway... Haha, I'm not a socialist. It isn't necessarily a socialist trait to argue for a progressive taxation system. They aren't silly examples. They are techniques in which a person on £150,001 could use to reduce their tax burden. My household income is £70k - I couldn't afford to domicile myself abroad on that pay. On £150,001 perhaps I could. I can't afford to pump loads of money into my share options but if I earned £150,001, after covering my usual outgoings, I seriously could and could avoid a fair bit of tax too. etc... etc... etc... Are the rules on share options wrong? Yes they probably are. Are the rules on domiciled status wrong? Again yes. Link to comment Share on other sites More sharing options...
Cyclone Posted August 14, 2011 Share Posted August 14, 2011 The current system is already progressive, even if the 50% rate were removed it would still be progressive. If someone is prepared to live abroad for a larger portion of the year than they live here, then it's not a scheme, they're no longer resident here. So are you just sore that you can't arrange your affairs to take advantage of some tax avoidance methods? There's a lot of perhaps in your post there and none of it really justifies why share schemes, living abroad, putting money into your pension or any other way of reducing your tax is wrong. Link to comment Share on other sites More sharing options...
Cyclone Posted August 14, 2011 Share Posted August 14, 2011 You've done absolutely nothing to prove they don't exist. All you've done is offer a hoity-toity and blinkered view of the situation based on your current situation as an IT contractor who happens to have an accountant who offers some advice on reducing your tax. You ain't rolling with the big boys though All you're offering is a blinkered view on the situation based on your current situation of not being able to afford to use a share options scheme. What makes you think your opinion is more valid than mine? My personal situation isn't relevant, what I wanted to find out was what these avoidance schemes were. But it turns out that they aren't schemes at all. Who would describe not living in the UK or owning a company as a tax avoidance scheme? And even if there was such a scheme (like the fine wine thing for example that's no longer possible), you still haven't explained why it would mean that the 50% rate shouldn't be abolished. Presumably if all the high earners were avoiding tax the 50% rate would be irrelevant anyway as none of them would be paying it... Link to comment Share on other sites More sharing options...
iansheff Posted August 14, 2011 Share Posted August 14, 2011 Think your pretty much spot on, you could drop the rate down to 20% but im sure the same top earners would use same loopholes. The system is broken not just the % rate. Too true, why would those who avoid it by what ever means they can now suddenly decide to pay it if it was cut. Link to comment Share on other sites More sharing options...
Cyclone Posted August 14, 2011 Share Posted August 14, 2011 Yeah look at those loop holes Average income tax paid for; All taxpayers £4,415 Top 10% to 1% £10,550 Top 1% to 0.1% £49,477 Top 0.1% £274,482 Look at them getting away with it. Link to comment Share on other sites More sharing options...
Mecky Posted August 14, 2011 Share Posted August 14, 2011 Yeah look at those loop holes Average income tax paid for; All taxpayers £4,415 Top 10% to 1% £10,550 Top 1% to 0.1% £49,477 Top 0.1% £274,482 Look at them getting away with it. That doesn't even make sense. All taxpayers pay £4,415, yet you've highlighted 3 other brackets which do not pay that amount. Link to comment Share on other sites More sharing options...
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