Posted by Bob Janova at 2:05pm Mar 7 '12At the moment in the UK coalition government, it's being reported that they're doing some political horse-trading over taxation.
Currently, we have a top rate of tax on income of 50% for incomes over £150,000, introduced at the end of the Labour administration, as well as the pre-existing 'higher rate tax' band of 40% from roughly £40,000 up to that threshold. The Conservatives would ideologically like to remove the 50% band, because they don't like rich people being taxed, but because of the financial situation over here and because of being in coalition with the Liberal Democrats, they haven't tried to do so yet.
It's being reported that the Lib Dems are offering to drop their opposition to that if the Conservatives will agree to a 'mansion tax', an annual tax on properties worth large amounts of money (I think the current proposal is a marginal 1% on the value above £2m). Currently, property is very lightly taxed and only up to a very low threshold (the top council tax band is a valuation of £500,000 or something, anything above that pays the same absolute amount).
We also have a sales tax, essentially (VAT), which is a third type of individual tax. (Capital gains tax, dividend tax and the like are essentially different types of income tax, even if they're administered differently.)
I just want to open the floor to discussion about what the most effective and fairest way to distribute taxation is. Most countries have most of their personal taxes (I'm leaving business taxes out of this for the moment) split between income and sales, with only minimal amounts on wealth and property – but is that the best approach, or is that just because almost every legal system came from serving the vested interests of the large landowners?
Currently, we have a top rate of tax on income of 50% for incomes over £150,000, introduced at the end of the Labour administration, as well as the pre-existing 'higher rate tax' band of 40% from roughly £40,000 up to that threshold. The Conservatives would ideologically like to remove the 50% band, because they don't like rich people being taxed, but because of the financial situation over here and because of being in coalition with the Liberal Democrats, they haven't tried to do so yet.
It's being reported that the Lib Dems are offering to drop their opposition to that if the Conservatives will agree to a 'mansion tax', an annual tax on properties worth large amounts of money (I think the current proposal is a marginal 1% on the value above £2m). Currently, property is very lightly taxed and only up to a very low threshold (the top council tax band is a valuation of £500,000 or something, anything above that pays the same absolute amount).
We also have a sales tax, essentially (VAT), which is a third type of individual tax. (Capital gains tax, dividend tax and the like are essentially different types of income tax, even if they're administered differently.)
I just want to open the floor to discussion about what the most effective and fairest way to distribute taxation is. Most countries have most of their personal taxes (I'm leaving business taxes out of this for the moment) split between income and sales, with only minimal amounts on wealth and property – but is that the best approach, or is that just because almost every legal system came from serving the vested interests of the large landowners?
Tax income, or wealth? - Bob Janova