Introduction Debate surrounding the controversial 50 pence additional rate of income tax for high income earners hit the limelight again at the beginning of this year following Shadow Chancellor ED Beals’ announcement that the Labor Party intended to restore the same if it was elected to power in the 2015 general elections. Addressing journalists in January, the Shadow Chancellor argued that such a move would see the economy raise approximately £10 billion over a period of three years, which would essentially imply that i) the level of national debt would be reduced, and ii) disparities in income and wealth would be minimized through a fully-progressive tax system structured to ensure that “those with the broadest shoulders bear a fairer …show more content…
What is the 5p Additional Rate of Income Tax? The UK taxation system subjects individuals’ incomes, including interest on savings, pensions, and salaries to income tax on the basis of ‘bands’ – the first £ 9,440 (which recently rose to £ 10,000) is exempt from taxation, with any income between this limit and £32,010 attracting a basic rate of 20%, that between £32,011 and £ 150,000 attracting a tax rate 40%, and anything in excess of £150,000 attracting a rate of 45% (BBC, 2014). Prior to April 2013, earnings exceeding £150,000 were taxed at a rate of 50% - the 5p rate of income tax - such that a person earning £200,000 would be taxed at 40% for the first £150,000 and an additional £25,000 for the extra £50,000, as opposed to the £22,500 they would pay under the current 45% rate. The government’s decision to reduce the high-band rate from 50% to 45% in April last year was aimed at stimulating economic growth and facilitating the process of recovery. The Labor Party’s plan is geared towards facilitating income redistribution by raising the high-band rate of income taxation from the current 45% to the original 50%.
Evolution of the ‘Additional’ Rate of Taxation in the UK Ault and Arnold (2010) point out that politics and history have both had an influence on the UK tax system over the years. The
One popular method of tax reform that some of the experts in this field think is worth considering is implementing a flat tax also known as a consumption tax. J. D. Foster says that “any tax with a single tax rate could be considered a flat tax.” An article from the website Tax Policy Center defines consumption as being “income less savings” (Gale). The major difference between an income tax and a consumption tax is the way savings are taxed. With an income tax all income is taxed when it is earned and again when interest is earned on any savings. Critics of an income tax say that this is double taxation and
Before reading the paper, I had no idea what “horizontal equity” and “vertical equity” were. These terms were described in detail at the beginning of the paper and allowed me to more thoroughly understand the key points that the authors made. When explaining how certain parts of the Australian tax system function, the authors made analogies to compare the tax system in Australia to that of other countries, such as the United States. However, some words and terms that the authors used were not clearly defined in the text. Luckily, I have had experience with some of the vocabulary words that the author used, such as "tax burden” and "progressive income tax system". Although, When it came to terms like “marginal income tax”, I had to do further background research so that I could gain an in-depth understanding of what the authors were saying. The authors state, "at the end of 2012, the marginal income tax rate for a person on average weekly earnings had risen to 37%". This left me wondering what marginal income tax is, and why Australia’s marginal income tax had fluctuated so much; neither of these items were explained in the paper. I believe that an average reader, with very little tax or business knowledge, would be unfamiliar with a large majority of these terms. If I were the authors, I would more clearly define the terms that I commonly used throughout the
In the past, previous governments have always placed great emphasis upon collectivism, yet, Margaret Thatchers government saw the future as being more individual and made an attempt at reducing/abolishing collectivist thinking. The government wanted people to think more individually. Mrs Thatcher viewed that the collectivist way of thinking would get in the way of the
The National Labor Union was the first labor federation in the united states and it paved the pathway for the Nights of Labor and the AFL. The National Labor Union was led by William H. Sylvis and was in response to unsuccessful efforts to form a national coalition of local trade unions. The National Labor Union wanted instead to bring together all of the national labor organizations, as well as the "eight-hour leagues" which pressed for the eight-hour day, to create a national federation that could call for labor reforms and help found national unions in those areas where none existed. The NLU was made mostly up of construction unions and other groups of skilled employees, but also invited the unskilled and farmers to join. However, they
Unions began forming in the mid of 19th century in response to the Industrial Revolution. The National Labor Union began to form in the post- Civil War Era. One of the major force emerged in the late of 1880’s was the Knights of Labor, which collapsed for the reason of weak organization.
There are three different types of tax systems presented in this article: Progressive income tax, Flat tax, and the Fair Tax. The progressive tax system is what we have in the US and is common in countries across the world. It bases the percentage of income tax you should pay by the amount of income you receive. Basically, if you have a large income then the rate of tax you will pay is larger and, furthermore, if you have a low income you will have a lower rate to pay. Many conservatives dislike this system because it forces the top percentage of taxpayers to pay a majority of the tax revenue. “According to the Tax Foundation, the top 1% of taxpayers have consistently paid more in federal income taxes than the bottom 90% since 2003…” It treats people differently and it allows for
The Depression Era was a period of major strife brought about by speculation and largely unregulated business practices. Almost everyone in the United States was affected, even many citizens of other countries around the world, but the working poor were disproportionately affected. Factory workers and farmers alike experienced a mass anti-union sentiment since before the turn of the century, and were subject to extremely hazardous working conditions, low wages, and in the case of farmers, many accumulated mass debt to decreasing prices of produce. While the great depression led to the unnecessary suffering of working poor, it also led to many great successes by the work of the labor movement, which went on to benefit future generations and
The American labor union has failed in its duty to protect the employees. Currently, most of the public unions agree to the plan that every worthy benefit or wage ought to be balanced by the union’s special consideration like agreeing to a two-tier salary scale, surrendering some hours, raised copays or even deductibles for medical procedures. However, these associations have done little to fight for the workers when they are faced with salary reductions, poor pays, unwarranted cutbacks and when they are denied compensation for retirements or injuries. According to Aronowitz, the US labor movement has continued to deteriorate and lacks the voice it had some times ago. By 1990s, the labor had already decreased in intensity from the higher 35 percent membership in 1953. This is just an indication that workers have no hopes in the then merged AFL-CIO (American Federation Labor-Congress of Industrial Organizations) who sought to democratize the labor movement. Their so-mediated organizing model that aimed at expanding the membership was a change of the core role of the previous service model of unionism that focused on petitioning for the members’ requests. Where the distresses may have begun earlier in the 1970s, it was not until the era of Ronald Reagan that the impact was felt. Since then, members of the labor unions have turned to be mere clients. The restructuring of the economy through technological change, and company merges, so millions of workers lose jobs. However, the
Democrats and Republicans in the United States have contrastive stances on the implication and enforcement of taxes. Typically, members of the Democratic Party support a progressive tax, which taxes higher earners at a higher rate. Republicans, however, tend to agree with a flat tax. This policy taxes everyone at the same rate, regardless of income. Although these two ideologies are the most common, there is still a place for a third or fourth opinion from other political parties. The Democratic and Republican views on taxes don’t include every possibility for the United States.
In 1776, this great nation, the United States of America was created by Congress through its hopes of an independent nation. In the last two hundred plus years, we have accumulated forty-four presidents. Our longest serving president was Franklin Delano Roosevelt. He a served a consecutive three terms and was re-elected for a fourth term but sadly he died two months in(A&E). FDR was a dominant leader in the democratic party and had lead the country through economic depression and all-out war. In the twelves years he had served he had created many important legislations, such as the Securities Exchange Act and the National Labor Relations Act(A&E).
Taxes have always been a contentious issue of debate in the United States; furthermore it is exacerbated by the specific philosophy of individuals, states, and regions. Too be clearer, nobody enjoys paying taxes, however it is the cost we pay for having civilization. Nevertheless, selfishness creeps in to many individuals who feel no particular benefit. Taxes have a real way of polarizing many people from different socio-economic backgrounds, because a tax is inexorably linked to a person’s belief-system. For instance, in the context of social welfare policy liberals are inclined to feel that the tax-burden should be heaped on individuals who have benefited the most from “the system”. On the other hand, we have conservatives who feel they did not receive any support, and all that is necessary is hard work and perseverance to succeed. I am not suggesting either one is correct; it is only a simple illustration to show the relation between pocketbook and personal belief. I hope studying the tax structures of New Jersey and Alabama will give me insight they both reconcile their political beliefs with their individual tax structures.
Many people may say that Pro-labor is the way to go because they want people to get fair wages, health care, and good working conditions. Doesn't that sound amazing, and wouldn't you think that would have to be made a law because how our country runs. You can say you don't live in the same country as me, but you live in a country that there is such things that keep you safe when you go to work. This is by the law, we the people take for granted how much the government does for us and how we should appreciate it. If you didn't know some areas in Mexico you can bribe a cop if you were doing something illegal and they will let you go. In the United States ,I don't believe that theres a cop that has been bribed at all that has taken it. Now we
Despite Paul Keating expressing support for a consumption tax in 1985, the GST did not gain serious political traction until it formed the centrepiece of the Fightback! platform championed by Liberal opposition leader John Hewson. The difficulties of explaining the nuances of a goods and services tax (GST) to the public significantly contributed to Hewson losing in 1993 what many commentators considered to be an ‘unlosable election’ (Eccleston 2013).
Many new tax plans have been presented over the many years of the U.S. Some push to increase the current tax percent for the upper class in hopes to increase the governments funding along with dreaming that the poor and middle class will then have their taxes reduced. What many fail to understand is that increasing taxes alone on the rich will actually cause the lower two classes to carry more of a burden. The reason the upper class has so much wealth is they have tax teams with several tax specialists advising them how to maximise their money used for investing. With such advisement for the upper class one
The UK taxation system relevant to the typical tax paying resident within the UK consists of Income tax, Corporation tax and Capital Gains tax. In the past tax payers have tried to ‘evade’ paying tax, with some ludicrous plans to keep their own personal taxes to a minimum, if not have a tax liability in the negative. This is partly why the UK Government has had to implement tax laws to maintain and clarify the structure of the taxation system within its policies. The system relies on a number of references, these are known as ‘sources of tax law’. These keep control of the taxation system and give a framework which users can adhere to. There are three different types of sources for tax law. Initially primary sources, such as Statute law,