People earning less than £10,000 a year should not have to pay Income tax
Currently the personal tax allowance over a tax year is set at £6,475. Many feel that this doesn't go far enough for those on the lowest incomes, and that people earning less than 10,000 pounds a year should be exempt from paying Income tax. The Lib dems have advocated raising the personal tax allowance to £10,000 a year, thus freeing around 4 million of the lowest earners from paying Income ax.
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Taxing the poorest is unfair and makes no sense
Currently the personal tax allowance stands at £6,475. This should be raised to at least £10,000 as it makes little sense to tax those on the lowest incomes, as the levy generated isn't that much. If the personal tax allowance was raised to 10,000, the £705 saved could go a long way to for those with the least, as living in our society gets more and more expensive. Why should those that make the choice to work, when technically they are considered to be below the poverty line have to pay tax when they are doing all they can in order to survive?
[[http://blogs.telegraph.co.uk/news/alexsingleton/8046867/Its_inefficient_and_unfair_to_make_poor_people_pay_income_tax/]]. It seems absurd to tax those who are in most need of our help. We should be taxing those who can afford to pay it, not those who cannot.
But this will only mean that those who earn just over £10,000 a year will claim that they are the lowest paid in society and therefore should not have to pay income tax either. Drawing arbitrary lines is a hard task. We have to acknowledge that people do have to pay income tax in order to fund all the things that our Government do for us. Therefore, everyone should contribute something to the public pot no matter how small. Income tax is a percentage. So if you earn a little, you only pay a little, if you earn a lot you pay a lot. This is what is fair. The personal tax allowance is a mere act of generosity from the Government, not a right that should be extended.
It will provide an incentive to those on benefits to find paid work
For those on benefits it is often more financially viable to remain on benefits than to find paid work. Surely we must be doing all we can to encourage those on benefits to find work. By increasing the threshold for the personal tax allowance, the stimulus will be there for more people to return to work. More people in work can only help the welfare state in cutting its costs. Especially in the current economic climate where public spending is under such scrutiny.
Instead, surely we should create an attitude towards working for a living which does not revolve around fiscal gain. People should want to work, not just for money, but also for a sense of self and satisfaction. If people lack this motivation, something is wrong. We need to find and solve the route cause, not just give these people more financial reasons to work. Work incentives are most effective through means-tested benefits and tax credits, not through the rates of income tax.[[Stuart Adam, Mike Brewer and Andrew Shephard, The poverty trade-off: work incentives and income redistribution in Britain, Joseph Rowntree Foundation, 3/10/06, http://www.jrf.org.uk/sites/files/jrf/1936.pdf%5D%5D So changing the tax bands would not be as effective as promising extra benefits to those who work, particularly for those things that work get in the way of like after school and holiday childcare.
We should take away the tax allowance and replace this with a £10,000 income rule
Currently, any one who pays tax gets an allowance of around £6,000 a year. This money is untaxed. It means that each month the person pays a little less tax than they should to ensure that they get their £6,000 tax free. If we were the change this whole allowance into £10,000 the Government would be short of just under £4,000 per working person in Britain per year. This is not viable. Therefore, we should scrap this allowance and instead implement this rule whereby if you earn under £10,000 a year you do not have to pay tax. That way, those who can afford to will pay more into the tax system, whilst those earning a meagre wage will be able to keep all that they earn.
This is not a viable option either. What rate do you set tax at for those who earn over £10,000? We would end up in a situation where people would rather stay in a job that pays £9,000 than get promoted to a job that pays £11,000 because the person earning £11,000 would probably end up earning less than £9,000. The reason why the tax allowance system works is because if you earn over £6,000 a year, you only pay tax on the money which exceeds that threshold. The tax system would simply collapse if we had no personal tax allowance. It would cause amass disservice to justice and fairness.
today a person earning money is fed up of increased expenses and acc. to me this shud nt be a liability on people to pay tax.......tax is taken fr people's benefit if they r nt paying dont wat a big deal ?????
Everyone should contribute to the state
Everyone in the UK has access to free healthcare and education. Many people take our welfare system for granted yet through our taxes, we all contribute to it. Therefore, as it's free to everyone. If people do not contribute taxes towards it, why should they be open to its benefits?
there are people on small incomes such as private pensions,who do not qualify for any state benifits. they pay tax on small incomes such as £7,500 per anumn, and find it very hard to manage as we are so heavily taxed on everything from council tax to car taxes, vat, income tax. It is very difficult to make ends meet for these people who pay their way on small incomes and dont claim anything from the state. A tax allowance of 10, 000 would be fair on this group of people, many of whom have been hard working and paid into the system all their lives, and may not yet be old enough to access their state pension, which of course they have paid for.
Those who earn less receive more from the Government already
Most benefits are mean tested. We have tax breaks, we have child care allowances, house cost allowances, fuel allowances, EMA. Britain is known as the welfare state because we give so much away in terms of benefits to those who are less well off. Given that they receive the most out of the system, surely it is in their interest to keep paying income tax. They will get the money back, if not two-fold anyway.
Personal tax allowances are given to everyone
Everyone gets a personal tax allowance. It does not only mean that you have to earn above this threshold to start paying tax. It means that every year, everyone can earn over £6,475 un-taxed.[[http://www.hmrc.gov.uk/rates/it.htm]] If we changed this figure to £10,000 we would also be giving a benefit to those who earn substantially more than £10,000. This will mean that there are less taxes being paid into the public purse and therefore less benefits around to help those who really need it. Raising the personal tax allowance to £10,000 is not a publically or politically viable option.
This argument does not explain why those who earn under £10,000 should be taxed, it merely asserts that other people will benefit from the personal tax allowance being raised. But then what we should argue, as above, is that the personal tax allowance should be scrapped and replaced with the idea of no-one paying tax if they earn less than £10,000. That way there is more money in the pot from those who earn more to account for those who earn less. This is the way meritocratic Britain should work.
What do you think?