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In reply to the discussion: Blasphemy: a National Sales Tax would be MUCH better than our present or any Income Tax system [View all]muriel_volestrangler
(101,266 posts)49. I suggest you look at a real example before going any further
As is obvious from the first line of this table, the income tax system in the UK is progressive. The amount of income tax and national insurance paid increases as income rises, but do note for this purpose that people are split into just five bands - and that means that the top band covers all higher rate tax payers and quite a lot of other people too - and the true tax paid by the really wealthy is not reflected in this survey.
More telling is the next line. Indirect taxes - so much loved by the current government and many tax theorists at UK universities - like VAT, alcohol duty and so on impact most on the poorest. That is something I have long argued.
Put these together and you see that the group with the highest tax rates in the UK are the poorest - paying more of their income overall than the most well off, quite astonishingly.
The reason is clear as the last two lines show - and that is that as a part of their spending indirect taxes have a much higher impact on this group and their capacity to spend - despite the zero-rating and exemption fo so called essential items.
https://www.taxresearch.org.uk/Blog/2013/07/11/the-inequality-of-the-uk-tax-system/
More telling is the next line. Indirect taxes - so much loved by the current government and many tax theorists at UK universities - like VAT, alcohol duty and so on impact most on the poorest. That is something I have long argued.
Put these together and you see that the group with the highest tax rates in the UK are the poorest - paying more of their income overall than the most well off, quite astonishingly.
The reason is clear as the last two lines show - and that is that as a part of their spending indirect taxes have a much higher impact on this group and their capacity to spend - despite the zero-rating and exemption fo so called essential items.
https://www.taxresearch.org.uk/Blog/2013/07/11/the-inequality-of-the-uk-tax-system/
Note that uncooked non-luxury food is exempt from VAT in the UK. So are many other essentials.
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Blasphemy: a National Sales Tax would be MUCH better than our present or any Income Tax system [View all]
Goodheart
Sep 2019
OP
Are you suggesting a sales tax or a VAT as is commonly used in Europe?
The Velveteen Ocelot
Sep 2019
#1
If food and clothing were exempt (except alcohol and luxury clothing) it could work n/t
Blaukraut
Sep 2019
#7
Sales taxes in general are regressive so legislators have to build in some protections for the less
CTyankee
Sep 2019
#13
UUnfortunately, the tax structure you described above disproportionately affects really poor people
intrepidity
Sep 2019
#53
I am cognizant of this as my husband is the (volunteer) chairman of New Haven's Homeless
CTyankee
Sep 2019
#58
Enforcement is 1) too complicated 2) too expensive 3) too difficult 4) impossible.
Goodheart
Sep 2019
#15
Yes, a National Sales Tax or a VAT would be simple and there would be no evasion...
Girard442
Sep 2019
#12
because the rich have eaten away at the income tax code and haven't done as much to the sale tax.
unblock
Sep 2019
#23
Sales taxes are not regressive if they're not universally applied across all purchases.
Goodheart
Sep 2019
#22
"you could not find a single credible economist to agree with your position."
Goodheart
Sep 2019
#50
You do a VAT on top of income tax. It pays for medicare for all. You do both.
applegrove
Sep 2019
#52