Interesting films about Russia, essential viewing!

[bansobaby]

Who has twisted anything and what is dubious about the figures? Are you saying the links I quoted are lies?

Ok, here goes.......

You said expenditure, the statistics refer to disposable income, not the same thing at all, however you try to swing it.

Lower incomes are likely to spend nearly all their income whether you call it blue, pink or spotty.

Higher incomes may spend a very low percentage of their income.

So yes, by using the word expenditure, you have twisted the facts, such as they are

 

[bansobaby]

Splitting hairs.
Saving is one way of spending your money. Maybe there should be a tax on savings expenditure? There are arguments for direct wealth taxes.

Oh, splitting hairs......

 

[Jacob]

Ok, here goes.......

You said expenditure, the statistics refer to disposable income, not the same thing at all, however you try to swing it.

Lower incomes are likely to spend nearly all their income whether you call it blue, pink or spotty.

Higher incomes may spend a very low percentage of their income.

So yes, by using the word expenditure, you have twisted the facts, such as they are

er - I didn't use the word "expenditure" at any point in the above.

 

[bansobaby]

er - I didn't use the word "expenditure" at any point in the above.

I apologise, you used the word spending........

Mea culpa.....

 

[Jacob]

I apologise, ....

Accepted. You missed that "spending" referred to disposable income after tax, which was the whole point. An easy mistake.

 

[Lefley]

not true, compared to incomes they've effectively doubled in 50 years
UK House Price to income ratio and affordability - Economics Help
In London have tripled


Nobody said it was.
But it is a shame that people are homeless or can't afford rents and adequate housing

True (ish).
And taxation is the way it is brought down again, to keep the wheels turning.
What goes around comes around.

Yes in 1950 house prices were 2.5 x yearly income. Now they are about 9x yearly income.

 

[bansobaby]

Accepted. You missed that "spending" referred to disposable income after tax, which was the whole point. An easy mistake.

I didn't miss anything.

You said "A higher proportion of the the poor's spending goes on VAT."

That is quite simply not true.

Twisting words again.

 

[Jacob]

I didn't miss anything.

You said "A higher proportion of the the poor's spending goes on VAT."

That is quite simply not true.

Twisting words again.

Don't worry about it, just untwist them!
The gist of what I was saying is true apparently, and nothing you have said changes this.

 

[bansobaby]

Don't worry about it, just untwist them!
The gist of what I was saying is true apparently, and nothing you have said changes this.

I couldn't care less what the 'gist' of what you were saying 'apparently' is.

What you actually did say is untrue.

 

[Jacob]

I couldn't care less what the 'gist' of what you were saying 'apparently' is.

What you actually did say is untrue.

But did you get the point I was trying to make?

 

[bansobaby]

But did you get the point I was trying to make?

I understand that you are trying to say that taxes such as VAT disproportionately affect those on lower incomes.

It's a somewhat fallacious argument. They are equally disadvantaged by having a low income in the first place......chicken and egg situation.....

If VAT was lowered, abolished, whatever......what replaces it? Higher taxation on higher earners doesn't really work beyond a certain point.

You would probably end up with a similar tax or several taxes by a different name......

I don't have the answers.....just don't like the way the arguments are sometimes phrased.

 

[johna.clements]

I didn't miss anything.

You said "A higher proportion of the the poor's spending goes on VAT."

That is quite simply not true.

Twisting words again.

The government states that the bottom 20% spend 10% of their income after direct taxes are taken on VAT the top 20% of households 5% on VAT.

Most people accept that 10% is a bigger proportion than 5%.

Disposable income being what is left after tax is the Uk Government definition.

Most accepted definitions of disposable income are that it's what is left after you have kept yourself alive.

If you spend, for example, £800 of your £850 income on zero or reduced VAT rated items to stay alive then the rest on "luxury" full VAT rated items, you have either spent 20% or thereabouts of your "income" on VAT or about 2.5%.

I imagine that those in the higher income brackets would have to be dead to spend less than 2.5% of their expenditure on VAT.

I don't necessarily disagree with some of the sentiments being expressed, but twisting already highly dubious statistics should be left to politicians.

I assume that you mean £850 per month after direct taxes.

The UK government state that 10% of this goes on VAT, for the bottom 20%, which is £85 per month.

VAT is taxed at 20% and 5% (plus 0%). Tax is tax. I just purchased a light bulb which had 20% VAT, which you describe as a "luxury".

If there was no 5% rate the bottom 20% would be paying VAT on half there spending or on £425 (20% of £425 is £85(government stated 10% of total)

You state, with no evidence, that they only pay 20% on £50 the rest at 5%.

20% of £50 is £10. £85(government stated 10% of total) less your stated portion raised at 20% of £10 leaves £75 to be raised on spending at 5%.

£75/5% is £1500. Or £1500 has to be taxed at 5% to make £75.

Your claimed spending VAT spread is clearly mistaken as you can not raise £75 of VAT at 5% on £800.


You also ignore the fact that tax is tax.

 

[Jacob]

I understand that you are trying to say that taxes such as VAT disproportionately affect those on lower incomes.

It's a somewhat fallacious argument. They are equally disadvantaged by having a low income in the first place......chicken and egg situation.....

If VAT was lowered, abolished, whatever......what replaces it? Higher taxation on higher earners doesn't really work beyond a certain point.

Never touched 100% but seemed to work at these levels:
"The highest rate of income tax peaked in the Second World War at 99.25%. It was then slightly reduced and was around 90% through the 1950s and 60s. In 1971 the top rate of income tax on earned income was cut to 75%. A surcharge of 15% kept the top rate on investment income at 90%.
In the 1970s, the highest rate of income tax on earned income was 83 per cent. Margaret Thatcher’s government reduced it to 60 per cent in 1980 "
In view of austerity and other current maybe we should revert to the very moderate level chosen by Thatcher (60%) and see how we go? Not least because in Climate Change we face a much bigger crisis than WW2 and should have been on a "war" footing from some time ago

You would probably end up with a similar tax or several taxes by a different name......

That's always been the way - if one tax doesn't get you another one will. Casting a wide net.

 

[johna.clements]

Further to my post above.
If you raise 10% VAT on the bottom 20% and maximise the take at 5% VAT rate, only one third could be taken at the 5% VAT rate.

You need to take two thirds at 20% plus the one third at 5% to make 10% overall.

It's simple maths:

yes it is

For someone on £850 after direct tax the least they could pay at 20% VAT is £56.67 on £283.33. Slightly more than £50 you thought. That would leave £28.33 VAT at 5% raised on £566.67. That leaves no spending at the zero rate.

Obviously most food is zero rate therefore the bottom 20% must be paying tax at the 20% VAT rate on even more than £283.33.

If 0% VAT was paid on £100 then someone on £850, after direct tax, would have to pay tax at 20% on £316.67.

You belief that the 20% VAT is only paid on £50 just does not add up.

 

[bansobaby]

The government states that the bottom 20% spend 10% of their income after direct taxes are taken on VAT the top 20% of households 5% on VAT.

Most people accept that 10% is a bigger proportion than 5%.


I assume that you mean £850 per month after direct taxes.

The UK government state that 10% of this goes on VAT, for the bottom 20%, which is £85 per month.

VAT is taxed at 20% and 5% (plus 0%). Tax is tax. I just purchased a light bulb which had 20% VAT, which you describe as a "luxury".

If there was no 5% rate the bottom 20% would be paying VAT on half there spending or on £425 (20% of £425 is £85(government stated 10% of total)

You state, with no evidence, that they only pay 20% on £50 the rest at 5%.

20% of £50 is £10. £85(government stated 10% of total) less your stated portion raised at 20% of £10 leaves £75 to be raised on spending at 5%.

£75/5% is £1500. Or £1500 has to be taxed at 5% to make £75.

Your claimed spending VAT spread is clearly mistaken as you can not raise £75 of VAT at 5% on £800.


You also ignore the fact that tax is tax.

Twisted statistics:

The government states that the bottom 20% spend 10% of their income after direct taxes are taken on VAT the top 20% of households 5% on VAT.

Income, not expenditure......not all income is spent.

I just purchased a light bulb which had 20% VAT, which you describe as a "luxury".

I put luxury in quotes as that is how the powers that be originally framed the VAT. I am fully aware that certain VAT qualifying items are not luxuries.

You state, with no evidence, that they only pay 20% on £50 the rest at 5%.

I qualified it by the means of trying to use it as an example. Try reading it.......

You also ignore the fact that tax is tax.

Really? Where?

You can batter on about it as much as you like, the simple fact is that the original statement that I took issue with was untrue. It is a mathematical impossibility.

Subsequent ramblings and obfuscations do not change that.

 

[Jacob]

..... the simple fact is that the original statement that I took issue with was untrue. It is a mathematical impossibility.

Subsequent ramblings and obfuscations do not change that.

No it was your misinterpretation of the original statement which was untrue. Why keep rambling on about it?
What do you think of 60% for top rate of tax? Looks quite sustainable?

 

[bansobaby]

No it was your misinterpretation of the original statement which was untrue. Why keep rambling on about it?
What do you think of 60% for top rate of tax? Looks quite sustainable?

Your statement was untrue.
No argument.

 

[johna.clements]

Twisted statistics:

The government states that the bottom 20% spend 10% of their income after direct taxes are taken on VAT the top 20% of households 5% on VAT.

Income, not expenditure......not all income is spent.

I just purchased a light bulb which had 20% VAT, which you describe as a "luxury".

I put luxury in quotes as that is how the powers that be originally framed the VAT. I am fully aware that certain VAT qualifying items are not luxuries.

You state, with no evidence, that they only pay 20% on £50 the rest at 5%.

I qualified it by the means of trying to use it as an example. Try reading it.......

You also ignore the fact that tax is tax.

Really? Where?

You can batter on about it as much as you like, the simple fact is that the original statement that I took issue with was untrue. It is a mathematical impossibility.

Subsequent ramblings and obfuscations do not change that.

If I lease a car to get to work I pay VAT at 20%.
If you buy shares in a car leasing business you don't pay VAT.
You are correct that some things that you do with your money to make more money are regarded differently.
Or are you implying that people with more money bury it in the back garden, so that it is not spent.

You decided to use the word luxury. You did not have to use the word luxury. You could have just stated 20% VAT rate.

Your statement that people would only pay tax at 20% on £50 is clearly wrong. You did not do the simple maths.

You pretend that tax at 5% tax is not a tax. This ignores the fact that most of the money raised contrary to your belief has to be raised at the 20% VAT rate.

It is you who makes the mathematically impossible statements. see my posts above.

 

[johna.clements]

Disposable income being what is left after tax is the Uk Government definition.

The OECD definition

Disposable income is closest to the concept of income as generally understood in economics. Household disposable income is income available to households such as wages and salaries, income from self-employment and unincorporated enterprises, income from pensions and other social benefits, and income from financial investments (less any payments of tax, social insurance contributions and interest on financial liabilities). ‘Gross’ means that depreciation costs are not subtracted. For gross household disposable income per capita, growth rates (percentage change from previous period) are presented; these are ‘real’ growth rates adjusted to remove the effects of price changes. Information is also presented for gross household disposable income including social transfers in kind, such as health or education provided for free or at reduced prices by governments and not-for-profit organisations. This indicator is in US dollars per capita at current prices and PPPs. In the System of National Accounts, household disposable income including social transfers in kind is referred to as ‘adjusted household disposable income’. All OECD countries compile their data according to the 2008 System of National Accounts (SNA 2008).

https://data.oecd.org/hha/household-disposable-income.htm

 

[Scruples]

Thatcher increased VAT from 8 to 15% in 1979. A simple move to shift the tax burden to the less well off whilst massively reducing income tax for the wealthy A higher proportion of the the poor's spending goes on VAT.


They didn't do that - they stashed it away and/or bought assets, especially housing, hence the historically high prices.
Best way to encourage investment is to increase corporation tax. It's not taxed if it's re-invested and it discourages crude profiteering

I remember, 1974, Labour's Dennis Healey doubled purchase tax to 25%. Was that shifting the tax burden too? I think you make it up to suit your agenda, Jacob.