06-28-2003, 09:56 AM | #14 | |
Elven Warrior
Join Date: Jun 2003
Location: Tolkien's England where the tale grew in the telling...
Posts: 330
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Quote:
You then pay local taxes for council sevices, insurance tax if you buy any insurance products (including motor insurance, house insurance etc), you pay stamp duties if you buy a new house, you pay excise duties on petrol, cigarettes and alchohol, indirectly (you don't always realise it, but its included in your bills) you pay environmental taxes when you use gas, electricity or pay your local council to take away your rubbish, you pay airport tax when you fly anywhere, you pay road tax if you drive a car, TV licence fees (which is a form of tax for watching state funded television), and various other fees and licences for things which the state supplies eg passports, medical perscriptions etc. Depending on your pattern of consumption, these taxes easily equate to about 10-15% of a person's annual salary if they are on high earnings. However, because these taxes are paid at the same rate by everyone, no matter how much they earn, they take up a much bigger share of income for those on average wages (say 15-20%). So far, you have a combined tax rate of between 50-55% and 63-68% depending on your income. Virtually everything you buy (goods or services) with the remaining 45-50% or 32-37% of your income is subject to 17.5% VAT (a kind of sales tax). Thus, approximately 9% or 7% (depending on your level of income) goes to pay VAT, bringing your total tax bill to approximately 59-64% if you are on average earnings, and 70-75% if you are a higher earner. Taking both together, they average out at just below 70%. I have tried to be prudent with these calculations - I haven't included inheritiance tax (which is only paid by relatively wealthy people, and only on death), capital gains taxes (which apply to disposals of only certain types of assets) nor have I included extra business taxes paid by people who are self-employed. The last point is this: the UK is considered to be a low tax country by European standards. Basic rates of income tax in Germany, Belgium, France, etc are much higher than the UK, their social security rates are also higher (as indicated by our Norwegian friend) and their VAT rates are also often higher. It may seem surprising, but I don't think the 70% rate is that unrealistic. Last edited by LutraMage : 06-28-2003 at 10:19 AM. |
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