'How Is It Done In The UK?'

[acropolis]

Federal taxes this time.

The US has a supercomplicated graduated system with writeoffs for the most random reasons imaginable (every special interest ever has purchased specific writeoffs for themselves, etc.).

And secondly we have payroll taxes which tax only the first X dollars you make.

But how is it done in the UK? I hear there is a big sales tax, but is there an income tax/how is it done?

And how do you think taxes should be done?

~~~~~~~~~~~~~~~~~~

Cause yesterday I read an article in 'Newsweek' about how Bush's tax cuts were aimed at completely changing our entire taxation system over.

[Supernova9]

Originally posted by acropolis
Federal taxes this time.

The US has a supercomplicated graduated system with writeoffs for the most random reasons imaginable (every special interest ever has purchased specific writeoffs for themselves, etc.).

And secondly we have payroll taxes which tax only the first X dollars you make.

But how is it done in the UK? I hear there is a big sales tax, but is there an income tax/how is it done?

And how do you think taxes should be done?

~~~~~~~~~~~~~~~~~~

Cause yesterday I read an article in 'Newsweek' about how Bush's tax cuts were aimed at completely changing our entire taxation system over.

There is income tax, the first £4500 you make in a year is tax free, 23% on everything you earn after that up to £30,000 (not 100% sure) then anything you earn above £30,000 is taxed at 40%.

[inf]

we have progressive direct taxation and regressive indirect taxation.

[wu_trax]

if you really want to see a complicated taxation system, do some research about taxation in germany
they try to make everything fair and wonderful, but the costs caused by this complicated system mean that everyone is worse off than with a less 'fair' taxation
pure brilliance

[Gayle29uk]

UK Income tax 2002-2003
Single people have a personal allowance of £4615, anything they earn up to this amount is not taxed. The next £1920 is taxed at 10%, £1921 - £29900 is taxed at 22%, and over £29900 is taxed at 40%.

Obviously we have similarly byzantine allowances but that's the basics.

UK VAT
Basic rate of VAT (sales tax) is 17.5%. There are a large list of exemptions, lower rate, and zero rated products but basically we pay 17.5% tax on top of the income tax.

Robbing bastards

[ELeeming]

Originally posted by Gayle29uk
UK Income tax 2002-2003
Single people have a personal allowance of £4615, anything they earn up to this amount is not taxed. The next £1920 is taxed at 10%, £1921 - £29900 is taxed at 22%, and over £29900 is taxed at 40%.

Obviously we have similarly byzantine allowances but that's the basics.

UK VAT
Basic rate of VAT (sales tax) is 17.5%. There are a large list of exemptions, lower rate, and zero rated products but basically we pay 17.5% tax on top of the income tax.

Robbing bastards

however a lot of the time it is possible to claim the vat back.

[Add]

Originally posted by ELeeming
however a lot of the time it is possible to claim the vat back.

only for vat registered businesses. So the only people that really pay vat are regular everyday people who are already taxed heavily anyway.

[wu_trax]

Originally posted by Add
only for vat registered businesses. So the only people that really pay vat are regular everyday people who are already taxed heavily anyway.

which is the whole idea of this tax, it is supposed to tax the "added value"
personally i think its the best tax ever developed, everyone can pay as much tax as he/she wants (because if you dont want to pay taxes you can simply buy less goods)

[Christian]

I took one look at the topic of this thread, and I was sure that it would be about sex.

Im disappointed.

[acropolis]

Originally posted by wu_trax
personally i think its the best tax ever developed, everyone can pay as much tax as he/she wants (because if you dont want to pay taxes you can simply buy less goods)

is there a tax on food/clothing?

as income tax goes, it is the same way because you can always make less money if you want too, whereas for sales tax there will always be ~10K a year you need to spend just to survive.

classically, rich people use their money to invest, and poor people spend their money. so a sales tax is an excellent way to take money from one specific class.

Originally posted by Christian
I took one look at the topic of this thread, and I was sure that it would be about sex.

I was told "quietly, with tea and crumpets served afterwards" (the English repsonse. The scotch/irish was 'unknown,' on the grounds that every instance had been during an alcohol-induced memory blackout period. The Welsh, unsurprisingly, said 'in the pasture, when no one is looking of course.' I considered all of these responses better left unsaid).

[pablissimo]

Originally posted by acropolis
is there a tax on food/clothing?

as income tax goes, it is the same way because you can always make less money if you want too, whereas for sales tax there will always be ~10K a year you need to spend just to survive.

classically, rich people use their money to invest, and poor people spend their money. so a sales tax is an excellent way to take money from one specific class.

No VAT on most food and clothes, not all though (afaik).

And as VAT is regressive, although the bulk of funds received through it are from the higher-spenders, the actual impact of it is felt most hard by the poor as a larger proportion of their income is spent on the tax than the rich.

Not ideal in that respect, but as necessities are VAT free it works kinda well.

[Benjitrons]

We also pay national insurance on our wages but I am not entirely sure how this is worked out.

[inf]

Originally posted by pablissimo
No VAT on most food and clothes, not all though (afaik).

Only childrens clothing is VAT exempt, and some food.

[pablissimo]

Originally posted by inf
Only childrens clothing is VAT exempt, and some food.

Knew there was a limitation somewhere like.

[Sub]

I wish there was just a flat income tax rate for everyone. It would be so much simpler.

[MrL_JaKiri]

Originally posted by inf
Only childrens clothing is VAT exempt, and some food.

I thought books were vat free, or has this changed?

[inf]

Originally posted by MrL_JaKiri
I thought books were vat free, or has this changed?

I was quoting him, I think all or most books are tax exempt along with other publications.

Most goods have a standard rate of 17.5% VAT applied to them, there is a reduced rate of 5% and also a zero rate.

[HobbieRogue4]

This year alone, the tax write-off for "Sports Utility Vehicles" and other such behemoths rose from $75,000 to $100,000.

<o/\o/\o>

[Androme]

Poor people in London are worst effected by the taxes

It's why I'm so seriously considering either moving up to Scotland or even best of all, to America (Altho I'd prefer Scotland -> Fife -> any of the areas ie: glenrothes etc.)

The reason I say that is because I saw a selected range of electrical goods & brand names for cheaper than it is here + America isn't as harshly taxed as the UK system afaik.

btw - speaking of taxes, iirc. if you inherit up to £250k it's tax free? or is it £100k ?

[Deathjam]

i like the whole death tax idea

it sound like it needs one of these

MUHAHAHAHAHA

[Dante Hicks]

Originally posted by wu_trax
personally i think its the best tax ever developed, everyone can pay as much tax as he/she wants (because if you dont want to pay taxes you can simply buy less goods)

Only if you want to not buy toilet paper, sanitary towels (if you're a women obviously), non-childrens clothing or eat most food stuffs.

It's totally voluntary! Afaik, the EU wants Britain to put VAT on the currently exempt items (e.g. newspapers, books, childrens clothing) to get us in line with some other member states.

But yeah, indirect taxes are regressive for the reasons mentioned.

p.s. I think the threshold for inheritance taxes is £250k. Which is a fair amount of "cash", but not much once property is taken into account.

[Androme]

Originally posted by Dante Hicks
p.s. I think the threshold for inheritance taxes is £250k. Which is a fair amount of "cash", but not much once property is taken into account.

that's what I thought too - wasn't sure - thanks

[Tactitus]

Originally posted by acropolis
Federal taxes this time.

The US has a supercomplicated graduated system with writeoffs for the most random reasons imaginable (every special interest ever has purchased specific writeoffs for themselves, etc.).

Heh. I remember when the US tax system was a bloated festering cesspool of special exemptions and complicated tax rates. It took a CPA to fill out all but the simpliest tax return. Then we went to a "flat tax" in the 1980s (OK, it wasn't flat, but it was close) with no exemptions (OK, just a couple--like home mortgage interest). Now, just 20 years later, we're back to the bloated festering cesspool.

There's probably a lesson to be learned there about public policy; but then again, perhaps not.

[wu_trax]

Originally posted by Dante Hicks
Only if you want to not buy toilet paper, sanitary towels (if you're a women obviously), non-childrens clothing or eat most food stuffs.

people who earn much money buy a lot of goods, therefore pay much taxes, people who dont have much money buy less goods and therfore less taxes. perfectly fine in my opinion. even better than a flat incometax. (ofc, food etc. have to be tax-free or reduced taxes)
[/b][/quote]
It's totally voluntary! Afaik, the EU wants Britain to put VAT on the currently exempt items (e.g. newspapers, books, childrens clothing) to get us in line with some other member states.
[/b][/quote]
these goods have reduced taxrates here aswell (except the children clothes, they have the full taxrate as far as i know) and so far i didnt hear a single word about the eu changing anything about it. vatrate here is 16%, reduced rate is 7% (i think). on the long run the vat rates within the eu should be sychonized though, that would make international competition easier.

[Dante Hicks]

Originally posted by wu_trax
people who earn much money buy a lot of goods, therefore pay much taxes, people who dont have much money buy less goods and therfore less taxes. perfectly fine in my opinion. even better than a flat incometax. (ofc, food etc. have to be tax-free or reduced taxes)

People who earn a little spend 100% of their income. If VAT is 17.5% that means that 17.5% of their income goes towards taxation.

If someone earns a lot of money they might only spend 50% of their income (the rest being saved, invested, etc.) This means only 8% (roughly) of their income goes on taxes.

Taxation is all bollocks, but this is a particularly bad example.

p.s. And the problem is that Food, etc isn't tax-free. And neither are the other necesseties that I listed. And even if they were, even for people on low income quite a lot of their money goes on transportation, clothes, electricity, etc - i.e. non food items.

[wu_trax]

Originally posted by Dante Hicks
People who earn a little spend 100% of their income. If VAT is 17.5% that means that 17.5% of their income goes towards taxation.

If someone earns a lot of money they might only spend 50% of their income (the rest being saved, invested, etc.) This means only 8% (roughly) of their income goes on taxes.

Taxation is all bollocks, but this is a particularly bad example.

p.s. And the problem is that Food, etc isn't tax-free. And neither are the other necesseties that I listed. And even if they were, even for people on low income quite a lot of their money goes on transportation, clothes, electricity, etc - i.e. non food items.

you cant use taxes to make everything fair and perfect. it doesnt work. id rather give poor people some social benefits so that they get along than having a fair but complicated taxation system.
just out of intrest: is capital income taxfree in uk?

[Dante Hicks]

Originally posted by wu_trax
you cant use taxes to make everything fair and perfect. it doesnt work. id rather give poor people some social benefits so that they get along than having a fair but complicated taxation system.

Who said anything about making anything perfect? This is just an awful system, and pretty much every non-rightist economist will tell you a VAT only tax system would be incredibly regressive. If your only defence is "Well, nothings perfect" then I'm suitably underwhelmed.

And no, capital gains tax exists. But obviously if I make an investment now, I am not taxed for it. I may be taxed later when I get returns upon it. If however, I just stick it in the bank, then there will be some tax on the interest, but not an amazing amount.

[wu_trax]

Originally posted by Dante Hicks
Who said anything about making anything perfect? This is just an awful system, and pretty much every non-rightist economist will tell you a VAT only tax system would be incredibly regressive. If your only defence is "Well, nothings perfect" then I'm suitably underwhelmed.

And no, capital gains tax exists. But obviously if I make an investment now, I am not taxed for it. I may be taxed later when I get returns upon it. If however, I just stick it in the bank, then there will be some tax on the interest, but not an amazing amount.

if you would tax goods and capital income everyone would pay the same rate on all money they earn. that would be a nice, because simple, system. ofc, you would still have to redistribute some money to the poorer people.
(but maybe you are right, im just gettin a little 'extreme' atm, because our taxation system here sucks so much :/ )