Merging income tax and NI contributions.
Tories believe the change – which is being actively considered by party chiefs – would make it clearer to taxpayers how much of their earnings they are handing over to the state.
Precisely. People need to realise just how much the light-fingered state is taking from them. NI is simply another income tax – so being honest about it is a step in the right direction. It might – just might – make people angry enough to vote for parties with low tax policies.
The move would mean basic-rate taxpayers handing over 32 per cent of their earnings and higher-rate taxpayers returning 52 per cent. Employers’ NI contributions are likely to remain unchanged under the plan.
If that rate of outright plundering doesn’t make you furious, it bloody well should. How dare the state routinely take over half our earnings – and higher rate taxpayers aren’t “rich” they are the middle earners who currently hit the 40% rate. Which in itself is an outrage. But as we see, 40% is in reality over half. Over half going to an avaricious, thieving, feckless state to spend on fake charities, quangos, foreign aid and propaganda campaigns.
Scum. Vile, evil scum. So, yeah, let’s have the merger and let people see what they are really paying these parasites. And while we are at it, do away with PAYE and make people actually hand over the money after they have earned it.
Except the administration of this would be a total nightmare.
My wife works in Tax, in the City for a large, but not big_4 firm of accountants, & life is horrendously complicated enough as it is ……
Looks attractive on paper.
Actually, please don’t go there.
Haven’t we learnt from the mistake of merging HM Revenue with the Customs thugs … ?
because government can’t make anything simple and likely as not have an unnecessarily complex IT system in place. The principle, however, makes sense here. Unlike merging the revenue and customs which had different functions, income tax and NI are both taxes and keeping them separate helps to disguise just how much the state is helping itself to our money.
The current system is certainly a shambles and needs sorting, but I can see an argument for not merging it into general taxation.
The alternative would be to collect it, ringfence it,and use it as its name suggests – as an insurance premium/pension scheme The money to be used only to pay for state pensions, HNS health treatment, and a financial safety net (maybe as subsidised loans?) for people suddenly made redundant or taken ill and unable to work.
If treated as an insurance premium then only those who had paid in (lets say for a minimum of 2 years) would be eligable to benefit from it. Pension and benefits levels would depend on years of membership of the system (as pensions used to be) and at a stroke it would prevent people growing up feeling entitled into a life on benefits while also preventing immigrants moving here for the benefits.
Shoving it all into one pot removes the element of personal responsibility and further turns state pensioners (people like myself have paid in for 40 years) into benefit recipients rather than their having a bought entitlement. People facing sudden unexpected hardship, redundancy or illness, would be able to claim, not as ‘scroungers’ but as properly entitled insurance customers.
There is no reason why it couldn’t be collected along with income tax for simplicity and the premiums related proportionately to income (to please the socialists), so it would become a part of income tax in that sense. It’s just that I’m not sure lumping it al together is sensible, rather I prefer the opposite, to specify what every tax is used for and limit government’s ability to fudge everything..
The reason I would like to see it merged is because I want people to get good and angry about the amount of money the state is pocketing. While it is in separate pots, people are less likely to notice – especially if it is taken before they even get their hands on it.
32 and 52 percent? And that’s before VAT, road tax, fuel tax, council tax, insurance tax and a raft of sin taxes.
Dear Mr Longrider
The so-called “employers’ NIC” is actually a part of the employees’ incomes which is taxed at 100%. It is part of the total remuneration package and is as much a part of the employees’ incomes as the their nominal incomes are.
The true rate of tax for 20%/12%/13%* income tax/employees’/employers’ NIC tax rates is therefore (20+12+13)/(100+13) = 45/113 = 39.82% and 65/113 = 57.52% for 40% income taxpayers, which all falls on the employee.
DP
* rates for illustration only
I think you’ve let the Government off lightly. Don’t stop at the 52% marginal rate that even middle income earners are now milked for.
Let’s add in the Council tax, let’s consider the 20% VAT which is added onto the cost of most goods. Let’s consider the 78% of the price of petrol which is tax, or the taxes on cigarettes and booze which vastly exceed the levels of VAT.
Let’s consider the taxes on savings, the taxes on pensions. And of course After you’ve spent your whole life working so that Westminster can bilk half your earnings, the bastards raid what’s left when you die as well.
Indeed.
The trouble is, no matter how good an idea it might be at first reading, could anyone, honestly, trust our present bunch of moronic PTB to (a) simplify anything, (b) apply any common sense when formulating the administration of such a system, or (c) avoid the temptation to use the new “system” as a means of somehow cunningly taking away even more of our money than they do already? I certainly don’t. Any change these days seems to be seized upon as an opportunity to make them wealthier and the rest of us poorer. I heartily wish that all of our politicians would take a 5-10 year “holiday” and do absolutely nothing for a while, because everything they do – no matter how good it might sound at the outset – always turns to dust and dismal failure.
And I’m not sure that combining NI and income tax would make people any angrier than they already are, to be honest, LR. A quick glance at one’s payslip and a comparison of the basic with the take-home pay is enough to make most people’s blood boil even without analysing the exact make-up of the money that’s been stolen.