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The average taxpayer with income between £20k and £30k pays on average £2630 tax, some 10.7%. If you hand him over £15k and them tax him on average additional £
by dandare 9y ago
The average taxpayer with income between £20k and £30k pays on average £2630 tax, some 10.7%. If you hand him over £15k and them tax him on average additional £15k then his tax rate must be around 44%. This will be extremely demotivational. A hard-working person will have barely more than absolute freeloader and if he tries to work extra hard you will take half of his reward.
- bryanlarsen 9y agoNo, he will have almost twice as much money as the freeloader. More importantly, if both him & the freeloader are spending £15k on rent & food, then the freeloader has £0k of disposable income and the worker has infinitely more disposable income. Another way of looking at it is that average taxpayer with UBI has an income of between £35k and £45k and has a marginal rate not much different from what people making £45k are paying right now. People making £45k aren't currently significantly demotivated by taxes, are they?
- dandare 9y agoYou are contradicting yourself. "the average taxpayer would pay £15k extra in taxes if they receive £15k in BI" vs "Another way of looking at it is that average taxpayer with UBI has an income of between £35k and £45k". Today a taxpayer with median income £21k takes home £19k net. After your reform, he will take home the same £19k net (remember: pay £15k extra in taxes if they receive £15k in BI). Except hew will now be way below the median and making only £4k more than the now ubiquitous dude Lebowski type.
- bryanlarsen 9y agoThe average taxpayer is well above £21k -- that's the median income, which includes the 40% not paying taxes and of course median is well below average due to tail effects.