Tax system fair?

Ray Palmer

As with most people I have friends and family with many different levels of income. Generally everybody thinks the tax system is unfair.
Those on lower income say tax those on higher incomes. Higher incomes say they are taxed too much and are paying more than their amount. They also complain they get very little benefit for taxes they pay.
On a general note if person A on 40k vs person B 80k. One friend insisted that meant person B had twice as much money as A. I explained that is not the case and person B got roughly 58% of the additional income difference. They also may have a higher standard of living that was not greed but living within their means.
I am also not talking about the people at the extremes who some how manage to pay little or no tax and be high earners. Or those with massive benefits. Both likely through fraud or playing the system.

Just generally is it a fair system?

CruelCoin

No, the current system penalises success.

"You've done well? Great! You can pay extra!" Its absurd.

Ush1

CruelCoin wrote: »

No, the current system penalises success.

"You've done well? Great! You can pay extra!" Its absurd.

So penalise the weakest in society? Interesting....

Dravokivich

Ush1 wrote: »

So penalise the weakest in society? Interesting....

Not really, I have no motivation to seek a higher salary, because it wouldn't be worth it for me to pay out more on tax for little extra that goes to my pocket in comparison.

...and I'm not even earning all that much.

CruelCoin

Ush1 wrote: »

So penalise the weakest in society? Interesting....

At what point did i say penalise?

To elaborate then: Flat rate of income tax across the board. Set it at a rate that equates to the intake of the current two-tier system.

Success should be rewarded, else what is the point is working to get there?

folan

Ush1 wrote: »

So penalise the weakest in society? Interesting....

catch 22, if you penalise the richest, they have a habit of leaving. but when you penalise the poorest, they suffer more. so how do you reward success?

tax isnt fair, but its better than nothing

another question

Ush1 wrote: »

So penalise the weakest in society? Interesting....

You don't have to penalise the weakest in society as a result of not majorly penalising those who have worked damn hard to get to where they are. Just because someone is on a higher salary does not mean they should hand over the balance in tax so that everyone is in the same boat in order to let the lower paid feel that it is fair.

CruelCoin

Dravokivich wrote: »

Not really, I have no motivation to seek a higher salary, because it wouldn't be worth it for me to pay out more on tax for little extra that goes to my pocket in comparison.

...and I'm not even earning all that much.

Aye,

Say you needed to work 40 hours to pull home 20k, and you had to work 70 hours to pull home 40k, your per hour return is in the current system decreasing as you go up in pay scale.

That is far from being an incentive to work harder/longer.

summerskin

Ush1 wrote: »

So penalise the weakest in society? Interesting....

No, not penalise them, make them pay their way. Tax should be the same level for all wage earners. Why should I pay a higher percentage of my earnings than those people I employ? Why should employers be punished when they create jobs that then of course create more taxable incomes for the government?

Should be a flat 35% tax rate on all earnings by everyone. Why should people in better paid jobs be punished for furthering their careers while lower paid workers often get away scot-free?

CruelCoin

folan wrote: »

catch 22, if you penalise the richest, they have a habit of leaving.

France would be a prime example there. Exorbitant tax rates for higher earners is resulting in a brain and wealth drain of epic proportions.

R0ot

Living with the OH for the last 4 years with 2 kids, not married. Revenue consider me a single person for tax purposes and social welfare consider us a couple when it comes to job seekers allowance etc.

Thankfully I make enough to live comfortably for all 4 of us but the hypocrasy in this religious state is concerning at times and downright wrong at others.

gobnaitolunacy

folan wrote: »

catch 22, if you penalise the richest, they have a habit of leaving. but when you penalise the poorest, they suffer more. so how do you reward success?

tax isnt fair, but its better than nothing

Penalise the middle earners, they just lie back and take it. Everytime.

The rich will simply make themselves tax exiles.

summerskin

R0ot wrote: »

Living with the OH for the last 4 years with 2 kids, not married. Revenue consider me a single person for tax purposes and social welfare consider us a couple when it comes to job seekers allowance etc.

Thankfully I make enough to live comfortably for all 4 of us but the hypocrasy in this religious state is concerning at times and downright wrong at others.

I'm in almost the exact same situation(been together 16 years though).

We're single when it suits the government, but a couple when it doesn't. Tax relief should be based on whether you live together, and also whether you have children or not. We're not married, so I don't get any tax relief for my children, but also can't get single parent tax relief as I'm "not single" even though my tax code says I am.

Backward country in so many ways and it drives me mad.

folan

gobnaitolunacy wrote: »

Penalise the middle earners, they just lie back and take it. Everytime.

The rich will simply make themselves tax exiles.

punish the middle class.

better than punishing the poorest.

worse than punishing the rich, but they're better at avoiding it.

still better than private police forces, private hospitals, private schools.......

Ush1

Dravokivich wrote: »

Not really, I have no motivation to seek a higher salary, because it wouldn't be worth it for me to pay out more on tax for little extra that goes to my pocket in comparison.

...and I'm not even earning all that much.

But surely that increase is a stepping stone? You're not just gonna give up on making any more money because at some stage you cross over a tax threshold?

Fromthetrees

Tax is the price we pay for civilisation.

I do think nobody should pay above a certain amount and no one should pay below another. We do have one of the highest rates of indirect tax here in Ireland compared to most of the West which disproportionately affects the poorer in society. There is also an almost European wide brain drain in Europe to lower income taxed countries.

I guess the answer is we need to get more for what we already pay over rather than finding all these new stealth taxes to help fund the state. Tax should be fairer.

ejmaztec

CruelCoin wrote: »

No, the current system penalises success.

"You've done well? Great! You can pay extra!" Its absurd.

Perhaps they're being ironic, penalising the rich for what some of the once super-rich did to the country.

Ush1

CruelCoin wrote: »

At what point did i say penalise?

To elaborate then: Flat rate of income tax across the board. Set it at a rate that equates to the intake of the current two-tier system.

Success should be rewarded, else what is the point is working to get there?

Success is rewarded with more money. How many people are afraid to make more money because of tax?

Flat rate of tax would just lead to a bigger divide between rich and poor IMO.

allibastor

R0ot wrote: »

Living with the OH for the last 4 years with 2 kids, not married. Revenue consider me a single person for tax purposes and social welfare consider us a couple when it comes to job seekers allowance etc.

Thankfully I make enough to live comfortably for all 4 of us but the hypocrasy in this religious state is concerning at times and downright wrong at others.

Ha, its good to hear someone else in the same boat. It is a bloody joke that system. I am the same, support a family of 4. for all the drawback purposes i have a family, misses cant get welfare as she is co-habiting, but i cant get any tax releif on anything as i am technically single. so i am paying it out double.

its not really worth working harder as all the extra costs that come itno play are never offset with any tax releif.

Akrasia

CruelCoin wrote: »

Aye,

Say you needed to work 40 hours to pull home 20k, and you had to work 70 hours to pull home 40k, your per hour return is in the current system decreasing as you go up in pay scale.

That is far from being an incentive to work harder/longer.

Nobody should be expected to work 70 hours a week

That is 14 hours a day for a 5 day week or 10 hours a day 7 days a week

That is not a reasonable work life balance.

If anyone is working 10 hours a day, every day, even if they're earning a hundred thousand euros a year, they're still wasting their life.

Ush1

folan wrote: »

catch 22, if you penalise the richest, they have a habit of leaving. but when you penalise the poorest, they suffer more. so how do you reward success?

tax isnt fair, but its better than nothing

I still think it is rewarded, we don't have socialism just yet and there is still rich and poor people.

Ush1

another question wrote: »

You don't have to penalise the weakest in society as a result of not majorly penalising those who have worked damn hard to get to where they are. Just because someone is on a higher salary does not mean they should hand over the balance in tax so that everyone is in the same boat in order to let the lower paid feel that it is fair.

I don't think that is generally the case but you could introduce a third tax band for "super rich"?

Gannicus

I think we need to develop something like the German tax system. I was looking at it the oother day. their high and low end percentages are similar to ours (U.S.C. excluded) but it seems to operate on a sliding scale.
25k at 22%
25k - 30k at 25%
30k - 35k at 30%

etc etc. I'm using those figures to illustrate my example I am not saying they are right but I do think it would be fairer. You pay more tax on a certain bracket of your pay and not get lumped into a higher bracket as soon as you exceed a certain limit by even the smallest amount.

Dravokivich

Ush1 wrote: »

But surely that increase is a stepping stone? You're not just gonna give up on making any more money because at some stage you cross over a tax threshold?

To be honest, I'm looking at what it's worth to me after tax. As that's what's left over for me. Be it a stepping stone, or a suspension bridge across my career with higher wages, the increase in taxable gross salary, heavily impacts on the net left over for me.

CruelCoin

Akrasia wrote: »

Nobody should be expected to work 70 hours a week

That is 14 hours a day for a 5 day week or 10 hours a day 7 days a week

That is not a reasonable work life balance.

If anyone is working 10 hours a day, every day, even if they're earning a hundred thousand euros a year, they're still wasting their life.

Many (read most if not all) self employed work in the region of 50-70 hours. I gave 70 as an example.

CruelCoin

Ush1 wrote: »

Success is rewarded with more money. How many people are afraid to make more money because of tax?

Flat rate of tax would just lead to a bigger divide between rich and poor IMO.

How is that unfair though? You work harder/smarter and you earn more.

Trying to level the income field by reducing the benefits of the extra work it takes to earn more is disastrous for any economy.
The lower earning working classes don't typically create wealth/jobs. Penalising those who do is a terrible idea, and one that is producing ugly black fruits (E.g: French brain/wealth drain) in countries that went down that road.

get_even

can someone explain to me what would be wrong with the idea of a flat tax rate of around 20% for everyone including corporations , thats the kind of tax code i would favour

allibastor

Akrasia wrote: »

Nobody should be expected to work 70 hours a week

That is 14 hours a day for a 5 day week or 10 hours a day 7 days a week

That is not a reasonable work life balance.

If anyone is working 10 hours a day, every day, even if they're earning a hundred thousand euros a year, they're still wasting their life.

its not that easy no adays with travel and all that though. i would say i am gone out of the house 13 hours a day, not a huge amount of choice as thier is no good jobs to be had in many places.

Dravokivich

get_even wrote: »

can someone explain to me what would be wrong with the idea of a flat tax rate of around 20% for everyone including corporations , thats the kind of tax code i would favour

The main problem is, those who provide for the state, don't get as much in return from the state.

As mentioned by some above who receive little to no benefits because they are single and supporting a family, yet cohabiting.

folan

biggest issue with corporation tax is if it goes too high, the cost of doing business gets higher, making it harder to be a profitable business. so keeping the balance between a fair tax rate and an attractive one is hard.

im glad i dont decide these things.

smash

We should just ship all the poor people out of the country. Save a fortune on welfare etc. and then we could also fire Joe Duffy and a few others cos there'd be nobody left to actually call him and complain! Problem solved! :pac:

Ush1

summerskin wrote: »

No, not penalise them, make them pay their way. Tax should be the same level for all wage earners. Why should I pay a higher percentage of my earnings than those people I employ? Why should employers be punished when they create jobs that then of course create more taxable incomes for the government?

Should be a flat 35% tax rate on all earnings by everyone. Why should people in better paid jobs be punished for furthering their careers while lower paid workers often get away scot-free?

Basically because they can. In a working democracy tax is imperitive and the less better off in society get brought to a level by the better off.

The less propping up that happens the bigger the divide between the rich and poor.

get_even

Dravokivich wrote: »

The main problem is, those who provide for the state, don't get as much in return from the state.

As mentioned by some above who receive little to no benefits because they are single and supporting a family, yet cohabiting.

you will always find some area where an imbalance exists , no system is perfect , a flat tax is a pretty decent way of equalising things IMO

get_even

Ush1 wrote: »

Basically because they can. In a working democracy tax is imperitive and the less better off in society get brought to a level by the better off.

The less propping up that happens the bigger the divide between the rich and poor.

that sounds like it involves too much state control

Ray Palmer

Ush1 wrote: »

You're not just gonna give up on making any more money because at some stage you cross over a tax threshold?

I stop working at a certain point due to tax. There is a tipping point where I just say I'd prefer the day off than pay 45% on the days earnings.
You earn more here you both pay a higher % tax and amount.
The view of social welfare and tax has always been unfair. But you can get married to address that or register civil union. That is your own choice

summerskin

Ush1 wrote: »

Basically because they can. In a working democracy tax is imperitive and the less better off in society get brought to a level by the better off.

The less propping up that happens the bigger the divide between the rich and poor.

So what? If I work hard to pay my way I see no reason why i should pay higher taxes to fund the lives of those who do not contribute equally to society.



I was a socialist when I was younger. It's amazing how your views change once you have worked hard for twenty years only to see your money being píssed up against the wall by those who do not contribute.

If people do not contribute to society then they can remain poor. I'm sick of working my arse off to make sure the "divide" between rich/hard working and poor erodes over time.

If they want to close the gap, make them work harder, educate themselves and earn their way through equal taxation.

Dravokivich

get_even wrote: »

you will always find some area where an imbalance exists , no system is perfect , a flat tax is a pretty decent way of equalising things IMO

Well, "some area," would suggestive few and far between instances where that occurs, not the many in which it does.

Also, flat tax isn't as equal when it's done on a percentage basis such as 20%. Sure it means people are paying the same amount in proportion to their wage, but those on 20k, 20% means a lot more to them, than those on 30k/40k/100k.

R0ot

Ray Palmer wrote: »

The view of social welfare and tax has always been unfair. But you can get married to address that or register civil union. That is your own choice

Which you also need to fork out more money for and I don't mean the wedding costs, the registration costs.

Grayson

The idea is that each pays according to their means. So if you earn loads, you pay more. But your take home pay is still higher than someone who earns less.

Think of it as a very basic form of means testing. And surely means testing is the fairest method of all.

Grayson

summerskin wrote: »

So what? If I work hard to pay my way I see no reason why i should pay higher taxes to fund the lives of those who do not contribute equally to society.



I was a socialist when I was younger. It's amazing how your views change once you have worked hard for twenty years only to see your money being píssed up against the wall by those who do not contribute.

If people do not contribute to society then they can remain poor. I'm sick of working my arse off to make sure the "divide" between rich/hard working and poor erodes over time.

If they want to close the gap, make them work harder, educate themselves and earn their way through equal taxation.

So all people who earn less than you are lazy? that's just obnoxious

OldNotWIse

Grayson wrote: »

The idea is that each pays according to their means. So if you earn loads, you pay more. But your take home pay is still higher than someone who earns less.

Think of it as a very basic form of means testing. And surely means testing is the fairest method of all.

But a flat rate of tax for everyone would still ensure that those who earn less pay less

CruelCoin

Ush1 wrote: »

Basically because they can. In a working democracy tax is imperitive and the less better off in society get brought to a level by the better off.

The less propping up that happens the bigger the divide between the rich and poor.

"bridging the gap" is nothing less than an excuse for the lazy to be sponge off the efforts of others.

If i work 60 hours, i want the benefit of 60 hours.

Ush1

CruelCoin wrote: »

How is that unfair though? You work harder/smarter and you earn more.

Trying to level the income field by reducing the benefits of the extra work it takes to earn more is disastrous for any economy.
The lower earning working classes don't typically create wealth/jobs. Penalising those who do is a terrible idea, and one that is producing ugly black fruits (E.g: French brain/wealth drain) in countries that went down that road.

I'm open to see where you're getting the figures from?
As far as I know money paid to lower earning classes usually stays in the country, same goes for money paid in social welfare.

It's a delicate balance as you also want ot attract foreign investment through tax benefits for them.

get_even

Dravokivich wrote: »

Well, "some area," would suggestive few and far between instances where that occurs, not the many in which it does.

Also, flat tax isn't as equal when it's done on a percentage basis such as 20%. Sure it means people are paying the same amount in proportion to their wage, but those on 20k, 20% means a lot more to them, than those on 30k/40k/100k.

using that criteria , a loaf of bread should cost more for denis o brien than someone earning 35 k per year

proportinatley speaking , a flat tax is fair and much less open to loopholes

CruelCoin

Grayson wrote: »

So all people who earn less than you are lazy?

Bit broad and crude, but to a large extent true.

Just sayin'....

K.Flyer

Aside from the fairness or un-fairness of our or any taxation system, what angers me most, and those that I know, is how our taxes are squanderd and wasted by our succesive governments.
We are not getting value for all the money that gets taken from us, either directly or indirectly.

Dravokivich

Grayson wrote: »

So all people who earn less than you are lazy? that's just obnoxious

That isn't what he's saying.

He's agreed with a lot of what I've said and I've openly admitted to not looking to earn more than I am now.

get_even wrote: »

using that criteria , a loaf of bread should cost more for denis o brien than someone earning 35 k per year

proportinatley speaking , a flat tax is fair and much less open to loopholes

You are either misquoting me, or not getting what I'm saying. I understand your viewpoint on a flat rate. all I've said in response to it, there are points when a flat rate will affect lower earners more dramatically. For one to lose 1/5th of their earnings @ 20k to tax is a hell of a lot of money for them to pay out as the remainder being 16k is very little left over for them. That is all I was saying.

Ray Palmer

R0ot wrote: »

Which you also need to fork out more money for and I don't mean the wedding costs, the registration costs.

It is not a massive cost and can be recouped by tax saved

Ush1

summerskin wrote: »

So what? If I work hard to pay my way I see no reason why i should pay higher taxes to fund the lives of those who do not contribute equally to society.



I was a socialist when I was younger. It's amazing how your views change once you have worked hard for twenty years only to see your money being píssed up against the wall by those who do not contribute.

If people do not contribute to society then they can remain poor. I'm sick of working my arse off to make sure the "divide" between rich/hard working and poor erodes over time.

If they want to close the gap, make them work harder, educate themselves and earn their way through equal taxation.

I'm not sure how you mean "fund the life of"? Were talking about people that work but get less tax deducted, so they are paying their way.

I would say it was more a case of politicians who make plenty of money who pissed both yours and mine money up a wall, rather than anybody working in the lower tax bracket.

summerskin

Grayson wrote: »

So all people who earn less than you are lazy? that's just obnoxious

No, I'm saying that everyone should pay the same % in taxes, otherwise there is no incentive to work harder and earn more money.

I would have no problem paying the same rate of tax as someone earning 10x my salary, or with someone earning 10% of my salary.

professore

Big Steve wrote: »

I think we need to develop something like the German tax system. I was looking at it the oother day. their high and low end percentages are similar to ours (U.S.C. excluded) but it seems to operate on a sliding scale.
25k at 22%
25k - 30k at 25%
30k - 35k at 30%

etc etc. I'm using those figures to illustrate my example I am not saying they are right but I do think it would be fairer. You pay more tax on a certain bracket of your pay and not get lumped into a higher bracket as soon as you exceed a certain limit by even the smallest amount.

That IS the way our system works, except we only have 2 bands at the moment, your tax credits go up when you go on the higher rate to take this into account.

Our tax system otherwise is quite fair, and just as importantly, transparent and relatively easy to work out, having lived in Belgium for a few years, you had to hire an accountant to make any sense of your personal tax return which ran to 20 pages, and you would end up with a completely arbitrary tax liability (or refund !!!) every year, even if your income or personal circumstances didn't change - which you had to pay in a lump sum. Never could understand it, worked with a PhD in mathematics and he couldn't even work it out - get division by zero errors !!!! I shudder to think what was involved with a self-employed or company tax return.

I know a self employed German lady living here and she says the same - we have a very transparent and easy tax system compared to what she had in Germany.

The USC - now that's unfair - takes no account of your income. They should have put that on income tax, as it is an unfair tax, hitting poorer people harder.