Adopt regressive tax system (like Europe) for NHC, etc.? (employment, fast food, lobby)

[Brave New World]

Originally Posted by Vlajos

Fascinating. I actually didn't know that our progressive tax system was so much worse than in Social Democratic countries.

The UK's taxes are mainly progressive and even VAT is usually limited to non essential and luxury items.

There are a couple of regressive taxes such as the tax on your home (council tax) although this is still according what what price band your home is in based on it's worth however it is still less regressive than a poll tax on the population.

Most countries in Europe have progressive earnings taxes similar to the US, and this is usually the main source of tax revenue.

Originally Posted by Public Finance

The UK’s taxes on the whole are progressive – with council tax being the only one that is regressive, an economic think-tank has said.

Direct taxes including income tax and National Insurance Contribution work alongside benefits to reduce inequality, the Institute for Fiscal Studies claimed in a briefing note today.

Council tax ‘only regressive tax in the UK’ - Public Finance

[InformedConsent]

Originally Posted by Brave New World

The UK's taxes are mainly progressive and even VAT is usually limited to non essential and luxury items.

There are a couple of regressive taxes such as the tax on your home (council tax) although this is still according what what price band your home is in based on it's worth however it is still less regressive than a poll tax on the population.

Most countries in Europe have progressive earnings taxes similar to the US, and this is usually the main source of tax revenue.

Not as much as you think. European countries have flatter income tax brackets than does the US, with most of their middle class paying the same or very similar income tax rates as the top 1%. Look at the chart. Even UK has a negative progressivity, meaning that their tax system is regressive (places a greater tax burden on lower income earners):

Tax Progressivity Chart

Of special note is the bottom axis of the chart. The countries that are charted in the negative range of the chart place a greater tax burden on those with lower incomes instead of higher incomes. If a country is charted around 0.0, their tax burden is flat, meaning everyone pays about the same total tax rate.

[Brave New World]

Originally Posted by InformedConsent

Not as much as you think. European countries have flatter income tax brackets than does the US, with most of their middle class paying the same or very similar income tax rates as the top 1%. Look at the chart. Even UK has a negative progressivity, meaning that their tax system is regressive (places a greater tax burden on lower income earners):

Tax Progressivity Chart

Of special note is the bottom axis of the chart. The countries that are charted in the negative range of the chart place a greater tax burden on those with lower incomes instead of higher incomes. If a country is charted around 0.0, their tax burden is flat, meaning everyone pays about the same total tax rate.

The UK Tax rates are quite progressive.

You don't pay anything on the first £12,500 you earn, and then only 20% on the basic rate up to £50,000, and only then does it rise to 40% up until £150,000, after which it reaches 45%.

Income Tax rates and Personal Allowances

Back in the 1970's, the highest rate of income tax on earned income was 83 per cent, and the wealthy left the country to avoid taxes, and there was a lack of investment and the country suffered what is known as a brain drain as entrepreneurs, the educated and talented left the country.

However by the 1980's Margaret Thatcher's government reduced it to 60 per cent by 1980 and 40 per cent in 1989 (equal to the higher rate). From 1989 to 2010, the highest rate of income tax remained at 40 per cent, today it's 45%.

If anything many parts of Europe have had significant taxes on the wealthy, and a more comprehensive system of welfare for the poor.

[InformedConsent]

Originally Posted by Brave New World

The UK Tax rates are quite progressive.

You don't pay anything on the first £12,500 you earn, and then only 20% on the basic rate up to £50,000, and only then does it rise to 40% up until £150,000, after which it reaches 45%.

Income Tax rates and Personal Allowances

Back in the 1970's, the highest rate of income tax on earned income was 83 per cent, and the wealthy left the country to avoid taxes, and there was a lack of investment and the country suffered what is known as a brain drain as entrepreneurs, the educated and talented left the country.

However by the 1980's Margaret Thatcher's government reduced it to 60 per cent by 1980 and 40 per cent in 1989 (equal to the higher rate). From 1989 to 2010, the highest rate of income tax remained at 40 per cent, today it's 45%.

If anything many parts of Europe have had significant taxes on the wealthy, and a more comprehensive system of welfare for the poor.

Nope. Research proves otherwise. Read the article I posted.

See the text in bold? That's what I'm talking about. Ask Americans if they'd be happy being in the 40% tax bracket with an income of $64,686.32 (US$ equivalent of £50,000).

Note the MUCH flatter UK income tax brackets. An income of less than $65,000 is already at the 2nd highest rate, and the highest rate is only another 5% more.

In the US, $65,000 is in the 22% tax bracket. About half the tax rate.

[Brave New World]

Originally Posted by InformedConsent

Nope. Research proves otherwise. Read the article I posted.

See the text in bold? That's what I'm talking about. Ask Americans if they'd be happy being in the 40% tax bracket with an income of $64,686.32 (US$ equivalent of £50,000).

Note the MUCH flatter UK income tax brackets. An income of less than $65,000 is already at the 2nd highest rate, and the highest rate is only another 5% more.

In the US, $65,000 is in the 22% tax bracket. About half the tax rate.

The pound has been lower in recent years due to the uncertainty of Brexit, and the least wealthy pay less tax receive family allowance and tax credits as well as a host of other benefits.

The average salary in the UK only has a 20% tax rate, so the average person does not pay more tax.

In terms of the wealthy they can move their money abroad and tax is not based on citizenship, unlike the US.

The US and Eritrea are the only two countries that tax based on both residence and citizenship. Other countries tax worldwide income of residents, but not citizens living elsewhere.

There are also lots of tax havens where companies can be set up and numerous tax avoidance schemes.

The UK has relatively low taxes compared with the 70's and even the 80's, as high taxes just lead to money being invested overseas or people moving overseas.

The UK Tax system is generally progressive, as pointed out in the link.

A regressive tax is a tax applied uniformly, taking a larger percentage of income from low-income earners than from high-income earners. It is in opposition to a progressive tax, which takes a larger percentage from high-income earners.

An example of a regressive tax would be a poll tax where everyone pays an equal amount regardless of earnings.

The tax rates for high earners in most of Scandinavia have been traditionally very high, whilst welfare in terms of the less well off has been very generous.

[Vlajos]

Originally Posted by InformedConsent

Nope. Research proves otherwise. Read the article I posted.

See the text in bold? That's what I'm talking about. Ask Americans if they'd be happy being in the 40% tax bracket with an income of $64,686.32 (US$ equivalent of £50,000).

Note the MUCH flatter UK income tax brackets. An income of less than $65,000 is already at the 2nd highest rate, and the highest rate is only another 5% more.

In the US, $65,000 is in the 22% tax bracket. About half the tax rate.

The "progressive" tax proponents refuse to read the facts and keep saying, but look it's "progressive"!

[InformedConsent]

Originally Posted by Brave New World

The pound has been lower in recent years due to the uncertainty of Brexit, and the least wealthy pay less tax receive family allowance and tax credits as well as a host of other benefits.

The average salary in the UK only has a 20% tax rate, so the average person does not pay more tax.

Well, it's sad that Brits' incomes are so low. Sorry about that. The US average income is in the mid-$60,000s. In the UK, that's the 40% tax bracket. In the US, that's in the 22% tax bracket.

In terms of the wealthy they can move their money abroad and tax is not based on citizenship, unlike the US.

The US and Eritrea are the only two countries that tax based on both residence and citizenship. Other countries tax worldwide income of residents, but not citizens living elsewhere.

There are also lots of tax havens where companies can be set up and numerous tax avoidance schemes.

The UK has relatively low taxes compared with the 70's and even the 80's, as high taxes just lead to money being invested overseas or people moving overseas.

The UK Tax system is generally progressive, as pointed out in the link.

Nope. I posted the chart. The UK tax system is regressive. The chief culprits are the much flatter income tax brackets, real estate/property tax, and the VAT.

A regressive tax is a tax applied uniformly, taking a larger percentage of income from low-income earners than from high-income earners. It is in opposition to a progressive tax, which takes a larger percentage from high-income earners.

Correct, and that's what happens in European countries. Again, mostly due to much flatter income tax brackets (for example, the middle class pays the highest or next to the highest tax rates), real estate/property tax, and the VAT.

An example of a regressive tax would be a poll tax where everyone pays an equal amount regardless of earnings.

No. The VAT snares lower-income earners the most as most of their income is spent on just trying to survive (living paycheck to paycheck, so to speak). Higher-income earners don't spend as much of their income and are able to save/invest which then earns them even more money.

The tax rates for high earners in most of Scandinavia have been traditionally very high, whilst welfare in terms of the less well off has been very generous.

Here's what the highest income tax brackets look like in Scandinavia... FAR different than what we have in the US. The middle class pays the top income tax rate, therefore their countries generate more tax revenue and are able to provide greater benefits (that's all explained in the article I posted):

Top Personal Income Tax Bracket Thresholds

[MikeNigh]

Progressive taxes are actually communism. As the idea is no matter how much extra work you put in everyone should be taking home about the same amount.

[Supposn]

Originally Posted by MikeNigh

Progressive taxes are actually communism. As the idea is no matter how much extra work you put in everyone should be taking home about the same amount.

MikeNigh, that ain’t how progressive income taxes work in the USA, and it ain’t Communism.

Whenever someone is unable to positively contribute some additional facts or insight into a discussion thread, they label whatever they oppose as being Communism, or Nazism, or unamerican.
USA tax regulations are a book of excessive number of pages, full of tax exclusions and exceptions that in turn required passage of additional regulations, to grant tax relief to those whose lobbyist argued as victims of the prior enacted exclusion or exception regulation.

I suspect that uniform tax rates for all income brackets would be unacceptably higher if we didn’t have progressive income tax rates, but unless we discontinue our tax policies of special strokes for more favored derivations of incomes, we need progressive income tax rates or our tax revenues will fall behind our government’s expenditures even further.

Respectfully, Supposn

[Brave New World]

Originally Posted by InformedConsent

Well, it's sad that Brits' incomes are so low. Sorry about that. The US average income is in the mid-$60,000s. In the UK, that's the 40% tax bracket. In the US, that's in the 22% tax bracket.

Nope. I posted the chart. The UK tax system is regressive. The chief culprits are the much flatter income tax brackets, real estate/property tax, and the VAT.

Correct, and that's what happens in European countries. Again, mostly due to much flatter income tax brackets (for example, the middle class pays the highest or next to the highest tax rates), real estate/property tax, and the VAT.

No. The VAT snares lower-income earners the most as most of their income is spent on just trying to survive (living paycheck to paycheck, so to speak). Higher-income earners don't spend as much of their income and are able to save/invest which then earns them even more money.

Here's what the highest income tax brackets look like in Scandinavia... FAR different than what we have in the US. The middle class pays the top income tax rate, therefore their countries generate more tax revenue and are able to provide greater benefits (that's all explained in the article I posted):

Top Personal Income Tax Bracket Thresholds

So what you are saying is that the US tax system is progressive and therefore does not help cut the gap between rich and poor than the European tax systems that you claim are regressive.

If that's the case there must be many poor people or homeless in the US, and it's population must be very happy with current health and welfare provision and this must be especially true among the poor in the US.

As for VAT most non essentials are exempt, and in terms of property tax, cities such as London have a lower rate than New York and the same is true of other areas, whilst you can claim a cut in property tax in the UK due to your financial circumstances. It also should be noted that the US has sales taxes.

You also seem to have not taken in to account benefits and welfare that account for 80% reductions in personal and property taxes for the poor in the UK and other European countries.

In the UK "The top 1% of the adult population now pays well over a third of all income tax. Only 58% of adults are liable for income tax at all. And the top 1% even of those who do pay income tax have seen their share of total income tax payments rise from 25% to 30% since 2010 as policy reforms, particularly under the coalition, increased income tax for the best off while reducing it for those on more typical incomes".

VAT rates on different goods and services -GOV.UK

The key findings of the Institute of Fiscal Studies 2019 report on the UK tax system -

Originally Posted by Institute for Fiscal Studies

Key findings

• Taxes in the UK are high by historical standards. At 34.4% of national income, the tax take is at its highest sustained level since the 1940s. Policy reforms since 2010 have increased tax revenue by about £20 billion overall – despite large giveaways increasing the income tax personal allowance, cutting the headline rate of corporation tax and freezing fuel duties. Tax-raising measures, including rises in VAT and National Insurance contribution (NIC) rates, exceed these giveaways overall in revenue terms.

• But UK taxes are not high by international standards. The UK tax take is near the average for developed countries, and lower than in most of Western Europe.

• Income tax, National Insurance contributions (NICs) and VAT provide almost two-thirds of tax revenue. Other countries typically raise more from social security contributions and less from property taxes. It is average earnings, rather than top earnings, that would be taxed markedly more if the UK adopted the tax system of a typical higher-tax country.

• The tax and benefit system is progressive overall. Before taxes and benefits, the highest-income fifth of individuals have an average household income that is 12 times as high as the poorest fifth. Adding all cash benefits and deducting the main direct personal taxes (income tax, employee and employer NICs and council tax) brings this figure down to 5. Benefits account for around 80% of this reduction, while direct taxes account for 20%. Indirect taxes (VAT and excise duties) take up a roughly constant fraction of household budgets across the income distribution, on average.

• The top 1% of the adult population now pays well over a third of all income tax. Only 58% of adults are liable for income tax at all. And the top 1% even of those who do pay income tax have seen their share of total income tax payments rise from 25% to 30% since 2010 as policy reforms, particularly under the coalition, increased income tax for the best off while reducing it for those on more typical incomes.

How high are our taxes, and where does the money come from? - Institute for Fiscal Studies