That's because there are more self-employed people. For instance, there were 1.9 million self employed in 1975. By 2014, the number had risen to 4.6 million. Both a rise in the absolute numbers and the share of workforce.
Overall highest level of tax receipts in June since records began. .
Income tax was introduced in 1799 and raised £6 million for the UK government. Since some people now earn £6 million, it's not difficult record to beat.
Tax returns are up because the economy is growing, not because the top rate was cut.
If the top rate was still 50%, tax returns would be even higher. The laws of mathematics state 50% of x is more than 45% of x.
Tax returns are up because the economy is growing, not because the top rate was cut.
If the top rate was still 50%, tax returns would be even higher. The laws of mathematics state 50% of x is more than 45% of x.
That rather assumes that x stays the same in both cases.
The contention of The Chancellor and others is that 0.5 * x1 < 0.45 * x2
That's because there are more self-employed people. For instance, there were 1.9 million self employed in 1975. By 2014, the number had risen to 4.6 million. Both a rise in the absolute numbers and the share of workforce.
Tax returns are up because the economy is growing, not because the top rate was cut.
If the top rate was still 50%, tax returns would be even higher. The laws of mathematics state 50% of x is more than 45% of x.
The higher the income tax band the more likely that people will act in a way to reduce the tax they pay.
Labour have never come to terms with the law of diminishing returns.
I have a tax level I am quite happy to pay to support my fellow man, but if you start to punish me for being successful, I will look for reasons not to pay it at all.
It is interesting to note that despite all of Labour's whinging about tax avoidance, they did nothing in thirteen years to stop it - in fact it increased, because of their policies and being in thrall to the banks for their financial model.
Tax returns are up because the economy is growing, not because the top rate was cut.
If the top rate was still 50%, tax returns would be even higher. The laws of mathematics state 50% of x is more than 45% of x.
The ONS figures on income tax payments provides insight into the spread of income and income tax payments in the UK.
For instance, there are 169,000 UK taxpayers earning over £500,000 per annum. 169,000 taxpayers is slightly less than the population of York. These taxpayers raise £16 billion in income tax - about 10% of the entire income tax receipts. There are 6.7 million taxpayers earning less than £10,000 to £15,000 and who contribute £4.7 billion or 3% of the income tax raised.
That rather assumes that x stays the same in both cases.
The contention of The Chancellor and others is that 0.5 * x1 < 0.45 * x2
Indeed. Supporters of higher taxation and Laffer Curve deniers always assume that the thing being taxed remains constant.
If tax rates go down then more tax can be raised as
- people are incentivised to work harder/longer/more productively as they keep more of their money
- people and businesses are attracted to move to the country
- people and businesses are less likely to leave
The higher the income tax band the more likely that people will act in a way to reduce the tax they pay.
Add on top stopping entitlement to benefits in old age which many want to do and the phrase 'shooting yourself in the foot' springs to mind. Or to put it another way - To do or say something that inadvertently undermines one's interests.
Why doesn't that apply to poor people who get caught with high effective tax rates
Do you mean high marginal tax rates?
Perhaps it does - if it is going to cost you to go to work, especially if you need to pay child care costs - why go out to work. It is what is known as the benefit trap.
(and I would fully understand someone who stayed at home rather than working if it was going to cost them - the problem is not with the benefit recipient it is with the system).
So how about reducing the standard rate of income tax from 20% to 10% ? That will generate more income tax revenue.
No it probably wouldn't. In economics just because a little bit of something leads to a positive change it doesn't follow that more of it leads to an even bigger or better change. Very few relationships in the real world are linear.
The whole point of the Laffer Curve is that that it depends on what side of it you are. On the left, increasing taxation increases revenues. On the right hand side, increased taxation decreases revenues. The hard bit is knowing where you are on the curve and where the maximum is.
That rather assumes that x stays the same in both cases.
The contention of The Chancellor and others is that 0.5 * x1 < 0.45 * x2
But altering the top rate of tax by 5% is not going to have any effect on the rate of economic growth, so x would stay the same.
Even the Tories said that cutting the top rate would cost the government millions of pounds.
No it probably wouldn't. In economics just because a little bit of something leads to a positive change it doesn't follow that more of it leads to an even bigger or better change. Very few relationships in the real world are linear.
The whole point of the Laffer Curve is that that it depends on what side of it you are. On the left, increasing taxation increases revenues. On the right hand side, increased taxation decreases revenues. The hard bit is knowing where you are on the curve and where the maximum is.
Complicated by different tax bands and availability of tax havens.
A 2009 study did indicate that the US and most European states are on the left of the Laffer curve and therefore would increase revenue if taxes were raised.
Comments
http://www.dailymail.co.uk/money/markets/article-3169375/Boost-income-tax-receipts-helps-government-borrowing-fall-June.html
interesting to note that this is the best june performance for 18 years (more income tax raised than during the boom years in the early 2000s').
well done osborne. keep it up.
That's because there are more self-employed people. For instance, there were 1.9 million self employed in 1975. By 2014, the number had risen to 4.6 million. Both a rise in the absolute numbers and the share of workforce.
ONS report here: http://www.ons.gov.uk/ons/dcp171776_374941.pdf (page 2)
Self employed people file income tax returns.
Overall highest level of tax receipts in June since records began.
UK deficit lowest in 7 years.
Income tax was introduced in 1799 and raised £6 million for the UK government. Since some people now earn £6 million, it's not difficult record to beat.
If the top rate was still 50%, tax returns would be even higher. The laws of mathematics state 50% of x is more than 45% of x.
About the time Labour took over.
No point being made at all, just an observation.
That rather assumes that x stays the same in both cases.
The contention of The Chancellor and others is that 0.5 * x1 < 0.45 * x2
These figures are not just the physical returns - but all income tax payments.
The higher the income tax band the more likely that people will act in a way to reduce the tax they pay.
I have a tax level I am quite happy to pay to support my fellow man, but if you start to punish me for being successful, I will look for reasons not to pay it at all.
It is interesting to note that despite all of Labour's whinging about tax avoidance, they did nothing in thirteen years to stop it - in fact it increased, because of their policies and being in thrall to the banks for their financial model.
The ONS figures on income tax payments provides insight into the spread of income and income tax payments in the UK.
For instance, there are 169,000 UK taxpayers earning over £500,000 per annum. 169,000 taxpayers is slightly less than the population of York. These taxpayers raise £16 billion in income tax - about 10% of the entire income tax receipts. There are 6.7 million taxpayers earning less than £10,000 to £15,000 and who contribute £4.7 billion or 3% of the income tax raised.
Why doesn't that apply to poor people who get caught with high effective tax rates
Indeed. Supporters of higher taxation and Laffer Curve deniers always assume that the thing being taxed remains constant.
If tax rates go down then more tax can be raised as
- people are incentivised to work harder/longer/more productively as they keep more of their money
- people and businesses are attracted to move to the country
- people and businesses are less likely to leave
Add on top stopping entitlement to benefits in old age which many want to do and the phrase 'shooting yourself in the foot' springs to mind. Or to put it another way - To do or say something that inadvertently undermines one's interests.
Do you mean high marginal tax rates?
Perhaps it does - if it is going to cost you to go to work, especially if you need to pay child care costs - why go out to work. It is what is known as the benefit trap.
(and I would fully understand someone who stayed at home rather than working if it was going to cost them - the problem is not with the benefit recipient it is with the system).
because they are most likely on PAYE, and / or can't afford crafty accountants.
on another note, aren't you happy that income tax receipts are rising?
So how about reducing the standard rate of income tax from 20% to 10% ? That will generate more income tax revenue.
No it probably wouldn't. In economics just because a little bit of something leads to a positive change it doesn't follow that more of it leads to an even bigger or better change. Very few relationships in the real world are linear.
The whole point of the Laffer Curve is that that it depends on what side of it you are. On the left, increasing taxation increases revenues. On the right hand side, increased taxation decreases revenues. The hard bit is knowing where you are on the curve and where the maximum is.
None.
But altering the top rate of tax by 5% is not going to have any effect on the rate of economic growth, so x would stay the same.
Even the Tories said that cutting the top rate would cost the government millions of pounds.
Complicated by different tax bands and availability of tax havens.
A 2009 study did indicate that the US and most European states are on the left of the Laffer curve and therefore would increase revenue if taxes were raised.