Tax

[tinfoilhat 11]

24 minutes ago, the_bloke said:

Facts:

 

Using this:

 

https://www.moneysavingexpert.com/tax-calculator/

 

Earn £13,000 in 2021/2022 and you'll take home £12,504. This means £1,042 in your pocket a month.

Over the year you'll pay £84 income tax and £412 in National Insurance.

 

Earn £50,000 in 2021/2022 and you'll take home £37,664. This means £3,139 in your pocket a month.

Over the year you'll pay £7,484 income tax and £4,852 in National Insurance.

 

If you earn £13k a year, your income tax is 0.3% of your earnings

If you earn £50k a year, your income tax is 14.9% of your earnings

 

Please explain how the earlier claim of `The personal allowance does take a small bit of money from everyone, but it hits the poorest the hardest.` is true.

I'm not sure this isn't a trick question.

 

If you are on £13k a year, you are spending all of that to keep your head above water. If you lose any of that, it's going to hurt. 

[Findlay 116]

With the case of benefit fraud increasing inline with automated claims it shows that their needs to be a human element in assessing and granting benefits. The same goes with tax as people will claim to be earning less than they are in order to pay less tax. You can see this in many areas across Sheffield where payments that should have been tax have instead been turned into house extensions.

[the_bloke 17]

4 minutes ago, tinfoilhat said:

I'm not sure this isn't a trick question.

 

If you are on £13k a year, you are spending all of that to keep your head above water. If you lose any of that, it's going to hurt. 

No, it's not a trick question. It's a response to the claim that the personal tax allowance somehow hits people on lower incomes more, and it clearly doesn't. There's no doubt that changes to the personal allowance will have a big hit on anyone who spends all their income every month and has no room to budge, but not everyone on a low income does that and it's wrong to think that everyone on a high income doesn't have any room to budge in their budget either - and they probably have more to lose and don't have a tax payer paid safety net.

[El Cid 221]

2 hours ago, the_bloke said:

No, it's not a trick question. It's a response to the claim that the personal tax allowance somehow hits people on lower incomes more, and it clearly doesn't.

You used the correct word there, of course it hits them more. There are lots of tax breaks for wealthier people, thousands in tax can be avoided if you are wise when palnning for retirement.

A low earner is more likely to pay 60% fuel tax on his transport to work, which is likely to be a large proportion of their income.

Unlike the wealthy who pay zero tax on aviation fuel, although we do now have air transport tax.

[Mr Bloke 1,445]

9 minutes ago, El Cid said:

You used the correct word there, of course it hits them more. There are lots of tax breaks for wealthier people, thousands in tax can be avoided if you are wise when palnning for retirement.

A low earner is more likely to pay 60% fuel tax on his transport to work, which is likely to be a large proportion of their income.

Unlike the wealthy who pay zero tax on aviation fuel, although we do now have air transport tax.

Hmmm...

 

I bet few of us realised that Mr Alcoblog was just planning for his retirement when he traded in his 2CV for the AlcoCopter...

(apologies to any new members who've no idea what I'm on about)

[Padders 2,891]

54 minutes ago, Mr Bloke said:

Hmmm...

 

I bet few of us realised that Mr Alcoblog was just planning for his retirement when he traded in his 2CV for the AlcoCopter...

(apologies to any new members who've no idea what I'm on about)

Just like to point out Mr. Bloke,

Alcoblog is to astute to use Aviation fuel, I do believe the AlcoCopter runs/flies on Hydrogen Fuel Cells.

[apelike 10]

3 hours ago, El Cid said:

You used the correct word there, of course it hits them more. There are lots of tax breaks for wealthier people, thousands in tax can be avoided if you are wise when palnning for retirement.

A low earner is more likely to pay 60% fuel tax on his transport to work, which is likely to be a large proportion of their income.

Unlike the wealthy who pay zero tax on aviation fuel, although we do now have air transport tax.

I think you are confusing and mixing up a number of issues in the above.

 

The personal allowance is graded so that those on a lower income pay less income tax initially as opposed to those on a higher income who pay more and the_bloke gave some example which show that in action. The personal tax allowance has absolutely nothing to do with tax breaks for wealthy people or avoiding tax. When talking about a low earner paying more in tax for fuel to work or even just for pleasure you are now making it relative to income which is the usual trick to try and convince others that in real terms they are worse off when in reality it just means they pay more in fuel tax relative to income. The same thing also happens when talking about being relatively poor compared to top earners.

[El Cid 221]

4 hours ago, apelike said:

I think you are confusing and mixing up a number of issues in the above.

You seem like an honest person.

 

Taking into account that a poor person pays a large proportion of his erning in 60% fuel tax, 70% on tabacco/alcohol tax and that a proportion of a high earners tax is avoided ; who do you think pays a higher percentage of tax from their earnings?

[apelike 10]

39 minutes ago, El Cid said:

You seem like an honest person.

 

Taking into account that a poor person pays a large proportion of his erning in 60% fuel tax, 70% on tabacco/alcohol tax and that a proportion of a high earners tax is avoided ; who do you think pays a higher percentage of tax from their earnings?

But if that person, like me does not have a vehicle, or smoke and brews his own beer then who do you think? You also ignore the fact that many people actually use public transport to commute. However the person in your hypothetical situation who pays the higher percentage of income tax on their earnings is the rich man and not the poor one. Don't forget the thread was about personal allowances and taxation on earnings not about hypothetical situations that may or may not happen. It was Thatcher that changed the way tax was generated from the old fashioned socialist way of taxing the hell out of everyone with income tax to a more balanced way. The idea behind it was to lower the direct taxation on earnings making the individuals tax burden less and increase indirect taxation instead to compensate, which proved to be a success. 

 

BTW The rich are also subject to the same taxation on alcohol, fuel and tobacco and are not exempt.

 

 

[El Cid 221]

7 hours ago, apelike said:

Don't forget the thread was about personal allowances and taxation on earnings not about hypothetical situations that may or may not happen. It was Thatcher that changed the way tax was generated from the old fashioned socialist way of taxing the hell out of everyone with income tax to a more balanced way. The idea behind it was to lower the direct taxation on earnings making the individuals tax burden less and increase indirect taxation instead to compensate, which proved to be a success.

That was before working tax credits, its illogical to give people money in the form of tax credits, when you are taxing them.

[apelike 10]

1 hour ago, El Cid said:

That was before working tax credits, its illogical to give people money in the form of tax credits, when you are taxing them.

Why is it illogical as its about individual circumstances. It is also means tested and capped out at £2,005 maximum a year.

 

https://www.gov.uk/working-tax-credit

 

If you think that illogical then perhaps we should stop giving out Child benefit as well as that is not means tested and applies to all with children regardless of circumstances. 

[Ms Macbeth 76]

10 hours ago, apelike said:

Why is it illogical as its about individual circumstances. It is also means tested and capped out at £2,005 maximum a year.

 

https://www.gov.uk/working-tax-credit

 

If you think that illogical then perhaps we should stop giving out Child benefit as well as that is not means tested and applies to all with children regardless of circumstances. 

Child benefit is no longer universal.   If one parent earns over £50k their eligibility changes, and they may lose part of it. 

 

https://www.gov.uk/child-benefit-tax-charge/your-circumstances-change