"Tax is a Moral Issue"

[Walterp]

Good knocking copy; Justin King (Sainsbury's big cheese) attacks other, less ethical, companies who he reckons don't always pay 'enough' tax.

Opens so many cans, it'd even keep Mr King happy.

What is 'enough'? A marginal rate of 50% (plus NI) is reckoned to be too low for big earners, who many people think ought to pay the Harold Wilson marginal rate (83%; plus another surcharge on rents and dividends to ratchet it up to a pip-squeaking marginal rate of 97%).

But if rich individuals are thought to deserve to pay more tax, why is company tax being lowered? At 20% to 23%, it's hardly exorbitant by historical standards. And anyone who is anyone would've incorporated themselves into a company by now - BBC executives, footballers and large-scale farmers all incorporate to 'save tax'. Many really well-run companies pay no tax at all, haven't for years, and don't expect to in the future.

So is 'saving tax' a moral duty to your family and your shareholders? Or is it really immoral, 'cos you're short-changing the State of resources that are sorely needed to help build schools and hospitals for the rest of us?

 

[Tarw Coch]

I certainly don't agree with either of the extremes of big companies paying vitually no tax but neither do i agree with taking the vast majority of income of very high earners in tax. Maybe it should be one fixed rate and the better you do the more you keep............and the more the state gets.

 

[JP1]

No Government ever had it's own money @Walterp

I favour more the tax day as first declared in the USA. This is the first calendar day of the year that you actually take home your own cash as opposed to paying direct and indirect taxes. And in the US and the UK, it's heading towards Christmas not New Year's Day

If you look at yield management, you are probably going to get more tax to the Exchequer if you have lower direct tax rates than those of the Wilson era

Now that's not saying large multinationals should be allowed to shift profits around to avoid tax where it was earned or they reside, however do we have legislators, politicians and tax officers bright enough to stop them?

 

[Y Fan Wen]

My old accountant, now deceased, was very fond of saying that there is no equity or morality in tax law.
It is the law, and that is the end of it. He got the saying from a tax inspector when he was arguing a client's case. When the inspector, in his turn, made a mistake, he used it on him to rub his nose a bit!

WP, I seem to remember that there was a 'once and for all' tax rate in excess of 100 for unearned income in Wilson's time. Dad, who never forgot anything that Labour did, claimed that there was another 'once and for all' in the post war government as well. He got well and truly screwed by Ramsay Macdonald in the 29-31 govt..

Nevil Shute always said that he emigrated to Australia because of the tax system.
I remember Mum buying shares in Big Blue at that time, and having to pay 100% tax on the transaction because it was a foreign co..

 

[RushesToo]

What particularly annoys me about tax is that big companies manage to avoid paying most of it. Amazon make a fortune, last year UK sales of £4.2B tax paid £3.2m.
If they and companies acting similarly paid their share I wonder how much it would reduce our tax by.
And another annoyance - we subsidise their poor pay of staff with tax credits, so we are probably paying them to trade here. How is that fair?

 

[neilo]

What is 'enough'? A marginal rate of 50% (plus NI) is reckoned to be too low for big earners, who many people think ought to pay the Harold Wilson marginal rate (83%; plus another surcharge on rents and dividends to ratchet it up to a pip-squeaking marginal rate of 97%).

Who, in their right mind, thinks that? I thought these ideas were purely the domain of idealistic Uni students, the staunch trade union members that think 'the management' have it in for them, the benefit scrounges that haven't done a day's work in their lives, and other individuals that have chips on their shoulders about anybody that has made anything of themselves.

There is no way that taxing income at such a rate that anybody with the ability leaves the country, can be good for the economy. Tax take doesn't increase in the long term, as all the wealth (& job) creators will choose to either reside elsewhere, or pull their horns in as it's really not worth the hassle.

 

[exmoor dave]

As a poor sheep keeping hill farmer i earn very little but i believe that there should just be a flat (&open!!) rate of tax for everyone.
I just can't see why, just because someone earns more that they should have to pay a higher % in tax, not to mention the more you earn the less services you are lucky to use from the state.

As for leftist politicians and do gooders whinging bout the injustices of low earners paying taxes at all saying high earners should just pay it all.....put a sock in it!! Everyone is in it together, the gov will happily frittter the money regardless of who's paid it

 

[Cowabunga]

Who, in their right mind, thinks that? I thought these ideas were purely the domain of idealistic Uni students, the staunch trade union members that think 'the management' have it in for them, the benefit scrounges that haven't done a day's work in their lives, and other individuals that have chips on their shoulders about anybody that has made anything of themselves.

There is no way that taxing income at such a rate that anybody with the ability leaves the country, can be good for the economy. Tax take doesn't increase in the long term, as all the wealth (& job) creators will choose to either reside elsewhere, or pull their horns in as it's really not worth the hassle.

Which is the reason that corporation tax must be lowered to allow UK companies to be competitive and to retain their tax paying within the UK rather than in a lower tax country.
If, for instance, UK companies were taxed at 23% and our competitors were taxed at 18%, that gives the competitor a 5% margin advantage straight away, which explains why UK agricultural equipment manufacturers are an endangered species while they thrive in other countries. Higher tax rates also explain why so many individuals and large companies have left these shores and thrive and pay all their tax in rival countries and very little, if any, in the UK.

We really do need to shrink the State drastically if we are to be competitive. The problem is that such a high proportion of the working population in most of the UK are employed by the State in one way or another, that the turkeys are very unlikely to vote for Christmas. Until the UK actually goes into financial meltdown, this is unlikely to change and tax will remain high to pay for it all.

 

[Walterp]

Who, in their right mind, thinks that? I thought these ideas were purely the domain of idealistic Uni students, the staunch trade union members that think 'the management' have it in for them, the benefit scrounges that haven't done a day's work in their lives, and other individuals that have chips on their shoulders about anybody that has made anything of themselves.

There is no way that taxing income at such a rate that anybody with the ability leaves the country, can be good for the economy. Tax take doesn't increase in the long term, as all the wealth (& job) creators will choose to either reside elsewhere, or pull their horns in as it's really not worth the hassle.

These thoughts (that you reckon are extreme) were expressed today, by nearly everyone at an extra-mural class that Julie and I attend at Narberth (French): there were a retired solicitor, a retired teacher, a GP, a paediatrician and the wife of an oil refinery chief executive - all thought that high earners ought to pay (a lot) more tax.

I gained the very powerful impression that, even in this marginal Conservative constituency, Dave will struggle to get another term.

 

[neilo]

These thoughts (that you reckon are extreme) were expressed today, by nearly everyone at an extra-mural class that Julie and I attend at Narberth (French): there were a retired solicitor, a retired teacher, a GP, a paediatrician and the wife of an oil refinery chief executive - all thought that high earners ought to pay (a lot) more tax.

But they already do. 40% of a lot, is a whole lot more than 20% of bugger all.

 

[Walterp]

But they already do. 40% of a lot, is a whole lot more than 20% of bugger all.

No, they all thought that high earners ought to pay even more...

Mind you, the definition of 'high earners' might be up for grabs - the GP, the hospital doctor and the oil exec might well be earning well over £100,000 pa so they;d be in the firing line?

 

[neilo]

Hmmmm. I suppose it's not much different to the threads on CAP reform on here, where capping should be brought in at just over each individual poster's level of sub, and all regions other than each poster's should have their SFP modulated to increase support to the poster.

 

[brynseiri]

How is taxation supposed to be fair if the government p155es it down the toilet. If Britain's population actually got what it pays for then there would be no complaining. We get feck all off the government, stealth taxes at every turn, council tax is ridiculous- all they do here for rural folk is empty the bins now and then, some fecking grit in winter would be a help, since we are paying for it. Then they are on about letting the Welsh assembly take charge of some taxes in Wales. Have they gone mad? Talk about letting the lunatics taking over the asylum.

 

[Wombat]

No, they all thought that high earners ought to pay even more...

Mind you, the definition of 'high earners' might be up for grabs - the GP, the hospital doctor and the oil exec might well be earning well over £100,000 pa so they;d be in the firing line?

Same as changing their pension ages, don't want it to happen to them but want the rest of us who will have to work for the next 35yrs to pay for them to knock off early.

 

[Brisel]

Tax evasion = Highly illegal & fraudulent.

Tax avoidance = good business practice. It is a human right not to pay any more tax than you have to.

The bigger earners have better accountants, hence paying less tax. Remember the Jimmy Carr tax scandal? My first thought was "I'd like the phone number for his accountant." Is that so wrong?

[middleclassrant] I don't have any children so won't be needing the education system any more. I have never claimed any benefits apart from tax allowances. I'm a net contributor to the economy so won't pay any more to any wasteful government who gives legal aid to radical Muslim clerics who recruit jihadists to harm us. [/middleclassrant]

 

[Walterp]

Same as changing their pension ages, don't want it to happen to them but want the rest of us who will have to work for the next 35yrs to pay for them to knock off early.

That topic also came up (it's in the French news, so highly topical) and, again, the universal view was that early retirement is a right. How early? Well, I got the impression 50 was thought to be about the right age.

No one was interested in any arguments that, in fact, public policy ought to be directed at increasing the length of working careers. The word "Thatcher" came up, very quickly, and as a word of abuse - despite the lady's popularity on here, I'd say she and her policies are widely abhorred these days.

How did that happen?

 

[Brisel]

Retirement at a certain age isn't a right - knocking off at 50 having been a working taxpayer for 32 years then expecting the other taxpayers to pick up the tab for a further 30 - 40 years of retirement just isn't possible any more.

It may have been applicable when they started working at 16 & only lived for 10 - 20 years after retirement but there isn't the money to do so now. Not helped by Gordon Brown's tax raid on pension fund profits which in addition to better medical science has contributed to the black hole in pension provision.

 

[Princess Pooper]

On the retirement topic I have little truck with firemen teachers etc who are whinging about their pension age being put back, No one else expects a job for life any more. Whilst I fully sympathise with the view that active firefighting or dealing with out of control 15 year olds might be too much for a 63 year old, GET ANOTHER JOB like any other private sector employee in an active trade has to if it's getting too much for them eg builders, farm workers.

And yes I think at £100,000 I do regard that as a high earner. It's 4 x the average earnings and if that means doctors etc then so be it!

 

[Campbell]

I here this morning that the Dutchy farms boss [can't think of his name] is trousering the thick end of £20m a year tax free!

Perhaps he gives £19.99m to good causes?

 

[JP1]

I here this morning that the Dutchy farms boss [can't think of his name] is trousering the thick end of £20m a year tax free!

Perhaps he gives £19.99m to good causes?

The Duchy of Cornwall is exempt from Corporation tax and capital gains on property and land. HRH Prince Charles pays income tax

Sooner have him as a custodian of land and just passing through than the multinationals like Google, Starbucks etc thank you very much