Fair Taxes

The absurdity of our tax structure was amply demonstrated in an analysis in
the Independent newspaper in association with PWC on 13th March. This
analysis looked at ten possible combinations of taxpayers and their families.

The results are almost impossible to sensibly summarise except that both
single pensioners & those with partners do very badly until their combined
gross pension exceeds about £35000 per year.

In the other 8 combinations those at the very bottom (gross income £ 10000
p.a. or less) gain a bit (max.£90 p.a.) but this is steadily eroded in a
random manner until gross income exceeds about £35000 p.a. after which very
modest gains typically about £30 p.a. kick in.

One has to ask what is the point of incurring the cost of administering such
trivial and inconsistent changes. The whole tax system needs root & branch
reform. It is insane that the 40% rate starts as low as £36001 of taxable
income & then remains unchanged up to whatever number of millions of pounds a
tiny minority get paid.

Politicians are terrified of income tax. Could that be because it is about the
ONLY tax that reflects a persons ability to pay & thus the better off would
wind up losing the subsidy that the poor give to the rich? If you earn
£20000 p.a. then to pay £ 175 VAT on a £1000 TV represents just under 1%
(0.875%) tax on your gross income. If you earned £100000 the VAT on the same
TV is still only £175 but now it represents just under one fifth of one
percent (0.175%) of your gross income. This is not fair taxation.

Previous blog

This is a new blog because I had misplaced the various codes that allowed me to get into my old one. Reminds me of when the Vicar said that at my age I should be thinking of the hereafter. I said "Vicar I do. Every time I go into a room I think what the devil am I here after."

Then, of course, I found the details of how to get into the old one! It can still be read at:
www.politicswriggling.blogspot.com

But I'm only going to use this one from now on.

It's tough for some people

It is reported in the FT that Philip Richards, CEO of RAB Capital, had his bonus slashed by 40%. Apparently one of RAB's Hedge funds lost some £70m on its' position with Northern Rock. Poor Mr Richard's bonus was only £11.3 million. My heart bleeds.

Bankers & Taxes

Where do those who are commenting on the current financial crisis get the idea that any control over 'City' bonuses will cost us tax revenue? The Financial Times carried a story about a banker who skilfully & legally managed to put most of his £500k bonus into his pension fund & got an £82k TAX REBATE as a consequence. It is those of us for whom that bonus = 20yrs salary who pay taxes.