We're All In This Together .....

[MrGongGong]

Oh yes we are "all in this together" my arse

http://www.guardian.co.uk/society/2012/feb/16/disabled-unpaid-work-benefit-cuts

I'm not sure who I am more disgusted with Cameron or his fellow travellers in the so called "Lib" Dems
so much for Liberalism and sod democracy

[scottycelt]

I have religiously ...

Unlike you, Mr GG ... :whistle:

Seriously, wishing you a speedy recovery!

[teamsaint]

http://www.guardian.co.uk/society/2012/feb/16/disabled-unpaid-work-benefit-cuts

They are great, aren't they?
They obviously think that because 6 month unpaid work placements are Ok for their pampered kids to get into the media/fashion/film production/the Law/Whatever, that the same should be true for people with disabilities and their potential careers in supermarket warehouses.
Some of the language is Orwellian, and very scary.

[ahinton]

I don't accept this argument at all. While factually it can't be questioned, the nuances are extremely questionable. The vast majority of public sector employers who do pay NIC1 contributions are subsidising those who don't through their contributions for if everyone paid they would arguably be at a lower rate. And those who are not paying NIC1 are themselves taxpayers - big money taxpayers to boot - so they are the taxpayers who are principally benefiting from this, to date, Government authorised dodge.

This must be given a Telegraph MPs' expenses treatment, no stone left unturned, as the police would do with a major robbery.

But tell me what way of paying people hired to do work of any kind can possibly be wholly expempt from the risk of tax dodging. There's already so much government sponsored tax dodging in the form of pension planning, inheritance tax planning, ISAs and heaven knows what else; everyone subsidises everyone else and everyone else's government and/or otherwise sponsored tax dodges. Live with it!

And, since you mention the police en passant, one might well wonder how many of them are paid in the kinds of ways discussed here; do bear in mind that anyone over the age of 18 other than those barred by law from holding company directorships of any kind can set up a limited company if they can afford to do so and wish to do so.

[teamsaint]

But tell me what way of paying people hired to do work of any kind can possibly be wholly expempt from the risk of tax dodging. There's already so much government sponsored tax dodging in the form of pension planning, inheritance tax planning, ISAs and heaven knows what else; everyone subsidises everyone else and everyone else's government and/or otherwise sponsored tax dodges. Live with it!

And, since you mention the police en passant, one might well wonder how many of them are paid in the kinds of ways discussed here; do bear in mind that anyone over the age of 18 other than those barred by law from holding company directorships of any kind can set up a limited company if they can afford to do so and wish to do so.

Fair and efficient tax collecting is indeed a difficult area, not least because the raising of tax in the most efficient manner is not always the prime consideration.
income tax is a particularly problematic one.Those who are in favour of progressive taxation see it generally as a vehicle for their aims. However,because of the way the laws around taxing income are constructed,(seemingly designed to keep taxation experts in business and tax bills for the rich down) it frequently fails in its progressive aims.

Given the wholesale avoidance of taxes on income, whether income or corporation, principally by the very rich, it begs the question of whether we would be better off having a less progressive, but also less avoidable tax.There are plety of ways of achieving this. Many less well off tax payers have marginal rates of over 30 %.

Better targeted indirect taxes are an option well worth exploring.

[ahinton]

Fair and efficient tax collecting is indeed a difficult area, not least because the raising of tax in the most efficient manner is not always the prime consideration.
income tax is a particularly problematic one.Those who are in favour of progressive taxation see it generally as a vehicle for their aims. However,because of the way the laws around taxing income are constructed,(seemingly designed to keep taxation experts in business and tax bills for the rich down) it frequently fails in its progressive aims.

Given the wholesale avoidance of taxes on income, whether income or corporation, principally by the very rich, it begs the question of whether we would be better off having a less progressive, but also less avoidable tax.There are plety of ways of achieving this. Many less well off tax payers have marginal rates of over 30 %.

Better targeted indirect taxes are an option well worth exploring.

I agree with some of this but the principal "problem" (insofar as it might be perceived to be one) is that the government (not just this one, of course) sponsors tax avoidance on a vast scale whilst at the same time overtaxing people, so an ever-developing culture of tax avoidance schemes is an inevitable by-product in which almost all of us who handle money get involved to greater or lesser degree. On top of that, when one considers the massive errors in tax collection that themselves cost the taxpayer fortunes that are not small, the entire panoply of taxation schemes and tax avoidance, evasion, collection and mis-collection becomes a laughing stock (or would do if it was at all funny)...

[Lateralthinking1]

I have heard all these points before on You and Yours. In anyone's mouth other than yours ahinton I view them as a total disgrace. ISAs are not a tax dodge. They were introduced by a Government with its encouraging of the public to take them up. Pension planning is actively encouraged by the Government for pretty obvious reasons, beneficial to all. I don't know what inheritance tax planning is exactly but if you are talking about amounts of money handed on to generations ahead of someone's demise, there are annual limits again actively sanctioned by the Government. And there never was any policy of requiring little John or Jane only to receive from other generations at the time of a will, otherwise that would be heading towards Stalinism. Just ask the millionaires in the Cabinet about that one. Feel the wallpaper. Hardly any are self made.

What we are seeing here with these senior civil servants - it occurs in the private sector too on a massive scale, hence the lukewarm response of the self-employed and others to this news - are actions by a few to which the Government chooses to turn a blind eye. It then condemns them as soon as they are in the public domain, like a kid who has just been found out. Arguably rather like with the issue of rendition flights, feelings in Government about whether something like this dodge is constructive are often very different from those expressed to voters who would take a different stance. The reason is to win elections. However, there is nothing of this moral equivalence - or deviance - in any of the examples you have given - ISAs and all the rest. Expect the stomach churning patting back and forth of the ball, just as over MPs' expenses. It wasn't me. It's them.

But the real parallel is offshore tax havens. Business institutes have largely given up on arguing within the standard framework. They know they always lose morally and rationally. They are now brazenly saying that they are justified because the tax rates are too high and in any case they should be made equal to make collection easier. The same sort of arguments that you are using here. In other words, bend the law to breaking point to overturn the will of the electorate. That is not merely an attack on good morals and fair-mindedness. It is an anarchist's hammer attack on the skull of democracy. And it is pursued by elites who would delight in kicking a principle when it was reeling in the gutter bleeding below their feet. In fact, not would. They generally do.

[Beef Oven]

I agree with some of this but the principal "problem" (insofar as it might be perceived to be one) is that the government (not just this one, of course) sponsors tax avoidance on a vast scale whilst at the same time overtaxing people, so an ever-developing culture of tax avoidance schemes is an inevitable by-product in which almost all of us who handle money get involved to greater or lesser degree. On top of that, when one considers the massive errors in tax collection that themselves cost the taxpayer fortunes that are not small, the entire panoply of taxation schemes and tax avoidance, evasion, collection and mis-collection becomes a laughing stock (or would do if it was at all funny)...

This tax-paying thread is all Greek to me.

[Lateralthinking1]

http://www.guardian.co.uk/society/20...k-benefit-cuts
They are great, aren't they? They obviously think that because 6 month unpaid work placements are Ok for their pampered kids to get into the media/fashion/film production/the Law/Whatever, that the same should be true for people with disabilities and their potential careers in supermarket warehouses.Some of the language is Orwellian, and very scary.

In truth, this is probably an even more significant story. The comments from Guardian readers say it all but of the words they use the one that strikes me most is "depraved". So much for IDS wishing to understand the needy. Ironically, the Permanent Secretary of DWP refused unequivocally to rule out sick leave as a criterion for job loss in his previous Department. So ill health was a reason to be less employable by the Government in 2010 and now in 2012 it is no reason to be unemployed. How conveniently fickle.

Good staff went, with anxiety that if they held on and had to go later, it would be with less compensation. Potentially if pushed that would have amounted to less than one sixth of career-long compensation entitlement. By "choosing" to go - ie leave before possibly being bashed into submission, though many call it "nudge" - it was about one third and no current benefit entitlement. An internal memo there admits with hindsight to having lost many experienced, staff in the process. Actually, teams flew.

At the time one asked how a situation of widespread anxiety arose and how those with, say, anxiety related and depressive illnesses could be placed in a position almost of having to go. Now we know. If those with cancer are to be told to get on their bike and work, then there was no chance. One wonders quite what the terror of any kind of illness might be in a system that jackboots the sick in this way. A very ill one? Anyhow, here are a couple of recent reports of the charming Mr Devereux. It is reassuring to see the all round warmth, maturity, common sense and integrity that are alive and well in the bowels of our political system:

The Guardian about A4E, ie that woman with the massive mansion - "Wednesday...the public accounts committee put critical questions to the civil servants responsible for devising the....way that contracts for the £5bn Work Programme were awarded....Chair, Margaret Hodge....asked...why.....companies with a poor track record ....had been given new work. (She said) "A4e … their performance......was abysmal … Why didn't you look at past performance?" .....Robert Devereux (said) that because other companies, which had not been involved in providing previous welfare-to-work contracts, were also tendering for contracts, it would not have been possible to look at the past performance of companies that had previously worked in this area. He also pointed out that most of the welfare-to-work providers had underperformed during the previous scheme".

And W2Wsolutions Website about that Committee performance - "Robert Devereux, Department of Work and Pensions Permanent Secretary, was very defensive for his entire contribution and for the rest of the session seemed a bit like a naughty schoolboy sticking his tongue out to the head mistress who was taking no nonsense.....The Committee chair made a point of telling Devereux: "If you have got data that actually contradicts what they're (NAO) saying, put it out to the public. Give it to us and then we can make a proper assessment. The longer you keep it behind closed doors the more suspicious everybody gets".

[greenilex]

I once tried to work out a tax on companies with numbers of highly-paid directors.... I was told (by my LSE/World Bank friend) that it was a neat idea but not feasible.

[teamsaint]

I agree with some of this but the principal "problem" (insofar as it might be perceived to be one) is that the government (not just this one, of course) sponsors tax avoidance on a vast scale whilst at the same time overtaxing people, so an ever-developing culture of tax avoidance schemes is an inevitable by-product in which almost all of us who handle money get involved to greater or lesser degree. On top of that, when one considers the massive errors in tax collection that themselves cost the taxpayer fortunes that are not small, the entire panoply of taxation schemes and tax avoidance, evasion, collection and mis-collection becomes a laughing stock (or would do if it was at all funny)...

Complexity in tax law is the rich person's friend. I became convinced of that 2 decades ago when I worked in tax, and I haven't changed my mind.
Given that the very rich can always afford to pay top minds to help reduce their bills, what is really needed is a monumental change to simpler, less avoidable taxes.

Unfortunately the powerful in our society are the ones who need to make the change...............so don't watch this space !

[ahinton]

Complexity in tax law is the rich person's friend. I became convinced of that 2 decades ago when I worked in tax, and I haven't changed my mind.

Well, much as I cannot claim to have your direct experience of working within HMRC, I must counter your statement here by stating that complexity in tax law is no one's friend. The more complexity, the greater the risk of errors on the part of taxpayer and tax authorities alike - and the more complexity, the greater the cost to the wealthy in fees to their tax advisors to help them keep their liabilities to the barest minimum.

what is really needed is a monumental change to simpler, less avoidable taxes.

Simpler, yes - much simpler, indeed - I could not agree with you more strongly on that; for one thing, the cost to the taxpayer of the tax collecting organisations would be vastly reduced and this would of course be a most welcome saving. Getting rid of the quaintly (for which read "absurdly") named "National Insurance Contributions" would be one good start; "national" they may be, but they "insure" no on against any risk and are not "contributions" to the extent that they are compuslory for those who have to pay them, but one thing is certain - that they are just tax by another far more cumbersome name is patently obvious. As they are for the most part a tax on income for the employed and self-employed and a tax on employment provision for employers, they should be absorbed into income tax for the former and scrapped altogether for the latter who would then be able to use the savings to employ more people who would then generate more income tax. The most unavoidable taxes are those such as VAT; anyone with access to the right advice can do much to reduce their liability to income tax, CGT and IHT.

Let's also not forget (as you either seem to do or choose to omit mention of) the various government sponsored tax avoidance schemes such as ISAs, pension contributions and the like; in a taxation climate where it is widely recognised that the government itself encourages tax avoidance and refuses to simplify tax policy as you and I would each advocate, it's no wonder that taxpayers - and by no means just the wealthiest ones - look to whatever legal means that they can in order to avoid tax.

[teamsaint]

Well, much as I cannot claim to have your direct experience of working within HMRC, I must counter your statement here by stating that complexity in tax law is no one's friend. The more complexity, the greater the risk of errors on the part of taxpayer and tax authorities alike - and the more complexity, the greater the cost to the wealthy in fees to their tax advisors to help them keep their liabilities to the barest minimum.


Simpler, yes - much simpler, indeed - I could not agree with you more strongly on that; for one thing, the cost to the taxpayer of the tax collecting organisations would be vastly reduced and this would of course be a most welcome saving. Getting rid of the quaintly (for which read "absurdly") named "National Insurance Contributions" would be one good start; "national" they may be, but they "insure" no on against any risk and are not "contributions" to the extent that they are compuslory for those who have to pay them, but one thing is certain - that they are just tax by another far more cumbersome name is patently obvious. As they are for the most part a tax on income for the employed and self-employed and a tax on employment provision for employers, they should be absorbed into income tax for the former and scrapped altogether for the latter who would then be able to use the savings to employ more people who would then generate more income tax. The most unavoidable taxes are those such as VAT; anyone with access to the right advice can do much to reduce their liability to income tax, CGT and IHT.

Let's also not forget (as you either seem to do or choose to omit mention of) the various government sponsored tax avoidance schemes such as ISAs, pension contributions and the like; in a taxation climate where it is widely recognised that the government itself encourages tax avoidance and refuses to simplify tax policy as you and I would each advocate, it's no wonder that taxpayers - and by no means just the wealthiest ones - look to whatever legal means that they can in order to avoid tax.

I agree with you completely about "government sponsored tax avoidance schemes".
If these were swept away, overall rates of tax , both direct and indirect, could be slashed, to the benefit of everyone.
My assertion that complexity is the rich man's friend is really connected to the point about government avoidance schemes. In the main these schemes can be exploited by the (very) well off. EG, a 40 % top rate of tax is a lot less painful if you can get that 40% straight back whilst saving for your pension. It seems to me that complexity arises for two main reasons. This first is government meddling, they just can't resist making little changes for whatever reason. The second reason, I suggest, is that through complex tax rules its possible to make the system look much tougher on the super rich than it really is......the maze of allowances, reliefs, and off shore status regulations play right into the hands of the rich and their advisors.

Oh, and I can't say I really blame anyone for trying to legally avoid tax.We all pay plenty. But we should make it as difficult as possible, even if we have to (sadly)sacrifice some of the progressive element

[aka Calum Da Jazbo]

ah um ... as Olson argues you can have a straight 10% [or whatever] but within a week the Doctors will be claiming that they should receive a different treatment and within a month fifteen special interest groups will have made such claims and by the end of the year everyone in the society will be arguing for progressive, regressive, flat, allowance quanta etc etc etc this scheme should be supported by tax, that should be discouraged etc etc ...

we are not and never can be all in this together .... most of us for most of the time are in a kind of placid non protesting hubbub whilst the disagreeable greedy bastards are grabbing all the money .... and actually now most of us have an uneasy feeling that our placid reliance has been misplaced there are quite a few greedy disagreeable bastards we would like to throw in jail eh .....?

[there is a positive correlation between being "Disageeable", as measured by Big 5 personality instruments, and income ... the more disagreeable have higher incomes all else being equal ... the rest of us probably find such self aggrandisement distasteful no .... ?]

[MrGongGong]

Oh, and I can't say I really blame anyone for trying to legally avoid tax.We all pay plenty. But we should make it as difficult as possible, even if we have to (sadly)sacrifice some of the progressive element

Actually compared to similar countries we don't pay very much tax at all
I think the "we all pay to much tax" statement is part of the "script"