Who do you think generates the wealth for the public sector to spend? All taxing public sector employees does is take some of the money the government gives back again.

It'd probably save load of money just to pay them less and keep the tax man out of it.

The best way to balance the budget is to make cut makes in public spending. It will get rid of the non jobs that were created. I would also add a huge increase in capital gains on house prices and shares, back to the levels that they were some time ago. Then if necessary raise income taxes, but offset that with abolition of many stealth taxes which do not raise as much and cost a lot to administer. I would also get rid of a lot of the tax loopholes that allow people to make a fortune here but not pay tax on it before they become tax exiles.

Who do you think buys the products that private sector companies sell? The idea of 'wealth generation' is largely a fantasy - a trick played on balance sheets that has no actual value in the real world, as we have all recently found to our cost when it turned out that the numbers didn't add up. The only place wealth (i.e. money) is generated is in the royal mint, everybody else is just passing it around. Everybody puts in and everybody takes out. The idea that one group of people are somehow more meritorious within this system than another is bunk. All the money looks the same in the bank or your pocket. The rules should be standard for everyone, regardless of where their pay packet comes from.

Frankly, I'm in favour of a flat rate taxation system. OK, you'd lose something in the gross 'tax take' but the reduction in bureaucracy involved in the enforcement of arbitrary divisions would more than make up for it IMO.

Jon

And the bureaucrats who's jobs would be lost would allow that change of course

Flat rate taxes are the idea of the same sort of people who think that the earth is flat as well. The changes necessary to have a flat tax are enormous and the only countries to have tried are a couple of baltic countries. Primarily because on emergence from a soviet system they needed a new system of raising tax. Flat taxes were simple and everyone was at the same level of income so fair. Though all its inherent problems became apparent, and while they had a boom they also had a huge crash when things went wrong and are now changing from a flat tax. they found that tax evasion was a serious problem and only the average worker ended up paying it. Complex economies cannot be run with flat taxes no matter who says so. The people who want it think that they will benefit. In reality they will not. Taxes are there as a way of deterring bad things like smoking.

The same people also call for the abolition of the public sector. The problem is that without a public sector providing police, justice education customs then all that will happen is that a few people will pay for private schools health and security and the rest of us can go to hell. We would not be able to afford these on our meagre salaries.

Ultimately we wall try and minimise the tax we pay one way or another its just that some are more successful than others.

What is this Our meagre salaries business? I'm sure you've just mentioned spending greater than the average wage (pro rata) on commuting in another thread.

No that was me and my company pays that. So not part of what I earn.

On a different tangent, how many people here have paid for services with cash to avoid paying VAT? I wonder how much money the governement is missing out on from this and other related avoidances such as smuggling for excise duty on booze and fags.

vast quantities but that will always be the case.

It shouldn't always be the case. How come the more money you have the easier it is to avoid taxes? Perhaps the government should chase what they are rightly due instead.

Okay imagine what you would do if you had to do if you had to pay privately for health insurance and education, and everything else if we had no public sector. Could you afford the full cost of private education even if you add back all your taxes? Not just for you but for your family?

I agree with that. Deal with the tax dodgers first. Then raise taxes if necessary.

The problem is some of the tax dodgers ARE the government (or pretty soon will be).

There is always of course the slippery line between 'avoidance' and 'evasion' but the bare fact is what was said earlier is true : if you have lots of money, you can pay people to make sure you pay the least possible amount of tax (and presumably come out ahead in the bargain) where as if you're poor old Joe Bloggs paying PAYE and having it taken straight out of your pay packet before you get it, you don't have that kid of luxury.

Tax avoidance/evasion is rife, both in terms of the rich using accountancy tricks and the 'working classes' operating in cash in the black economy. Loopholes come and go but the number of them barely seems to change. My father was an inspector in the Inland Revenue for pretty much his whole working life - got to quite a senior level in the process, which means he went after some fairly important people (and some fairly dangerous ones at times) and dealt with some very large sums of uncollected tax. He's said to me that on occasion he felt his work was doing absolutely no good at all, because he was spending most of his time dealing with red tape, the same red tape that practically encouraged tax avoidance. The Inland Revenue (and now that part of HMRC) exists purely to enforce an arcane and impenetrable set of regulations that have.. mutated organically over 100 years or so as successive administrations tried to square the circle of making progressive taxation both 'fair' and sufficiently robust to maintain the public finances. Our tax system is massively counter-productive and, having looked into it in some detail advised by someone whose life's work was to enforce I have come to the conclusion that there simply must be a better way to do it, because the way we are doing it is utterly broken.

I don't think a flat 17.5% VAT rate on everything will help at all - the fact is it will be levied on the people who don't spend anything on luxuries because they can't afford them much more than people who have money to burn.

I agree. The problem is that it is one thing that political parties will not agree to. They get voted in because their big business backers want things. If they cannot fiddle the system for their backers what would be the point. A good example was the reduction of capital gains tax. The hedge funds lobbied for a much lower rate or they would all move offshore. The government capitulated and lowered it to 18% for everything. Then the MPs started flipping houses and only paid 18% if they were stupid enough not to change the designation of their main home for tax purposes. Then they paid nothing instead of the 40% that they would have had to pay under the old scheme.


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