The current tax system in the UK has separate rates for taxing earned income, dividends, interest and capital gains. It has a personal tax allowance that is less than the amount required for a person to house, clothe and feed themselves. It has tax bands that increase tax in steps from 10% to 50%, the steps being uneven in size and income coverage. It has a "National Insurance" taxation system that is utterly unfair and contains hidden taxes on employment such as "Employer's National Insurance".
A fair tax system would tax all sources of income as income. National Insurance would be abolished and combined with income tax. There would be no tax until income reached a living wage. There would be a smooth transition from no tax to the highest rate, this transition being a relief to account for the fact that one person's living wage may not be the same as another's. There would be a maximum wage because huge incomes are unlikely to be moral (they represent theft from shareholders, employees or taxpayers). The way the new system would operate is shown below:
Capital gains are a special case because people may make an isolated gain such as selling their business to retire or publishing one successful book or some artistic or inventive endeavour. Capital gains from individual transactions that exceed 10% of the median wage should be taxed as if they have been earnt over 10 years. (ie: in the year of the gain the tax is first calculated as if the gain were 10% of its value and this is then multiplied by ten to calculate the total tax due, each succeeding year for 9 years 10% of the gain is included as income but a tax credit given to account for the fact that tax has already been paid).
The maximum income would be thirty times the national median income (about £900,000 at present incomes). Income in excess of the maximum would be taxed at 100% - this only affects about 12000 taxpayers in 2010. People with such huge incomes would need to leave the excess money in their companies. Claiming foreign domicile and foreign residence, including changing nationality to avoid tax would need to be stopped.
The government would raise supplementary revenue from a "distance tax" on goods and services, property, duties and VAT.Source URL: https://indahrahmadewi.blogspot.com/2011/11/new-taxation-system.html
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A fair tax system would tax all sources of income as income. National Insurance would be abolished and combined with income tax. There would be no tax until income reached a living wage. There would be a smooth transition from no tax to the highest rate, this transition being a relief to account for the fact that one person's living wage may not be the same as another's. There would be a maximum wage because huge incomes are unlikely to be moral (they represent theft from shareholders, employees or taxpayers). The way the new system would operate is shown below:
Capital gains are a special case because people may make an isolated gain such as selling their business to retire or publishing one successful book or some artistic or inventive endeavour. Capital gains from individual transactions that exceed 10% of the median wage should be taxed as if they have been earnt over 10 years. (ie: in the year of the gain the tax is first calculated as if the gain were 10% of its value and this is then multiplied by ten to calculate the total tax due, each succeeding year for 9 years 10% of the gain is included as income but a tax credit given to account for the fact that tax has already been paid).
The maximum income would be thirty times the national median income (about £900,000 at present incomes). Income in excess of the maximum would be taxed at 100% - this only affects about 12000 taxpayers in 2010. People with such huge incomes would need to leave the excess money in their companies. Claiming foreign domicile and foreign residence, including changing nationality to avoid tax would need to be stopped.
The government would raise supplementary revenue from a "distance tax" on goods and services, property, duties and VAT.Source URL: https://indahrahmadewi.blogspot.com/2011/11/new-taxation-system.html
Visit Indah Rahma Dewi for Daily Updated Hairstyles Collection
