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A flat tax is also being considered by politicians in ... Germany and Spain.
Nobody is wedded to massive government and big tax like the UK.
if everyone pays, let's say 25%, the high income earners would keep a lot more money. Example: I earn $10 mil, and and pay 50% in taxes. If the 25% flat tax is instituted, I would only pay $2,500,000 and the state is $2,500,000 short, and unless they cut social programs drastically they would have a problem. I hope flat tax is instituted, however I doubt it will be, because most people benefit from progressive taxation and politicians love to say "we're doing this for you," with other people's money.
So many of these same people make a little money on the side with EBAY - and of course it easily ads up to 25% of their income.
It's tough going for many of the workers of the world.
would only pay $2,500,000 and the state is $2,500,000 short, and unless they cut social programs drastically
Actually study after study has shown that a flat tax is more equitable (read those links I provided) and those who benefit most are the ones on lower incomes!
In your particular example the state being £2.5 million short is not a problem if they dispense with the several million extra employees they've got (they won't need them to manage the simpler tax structure). At a low, flat rate those people would readily find productive jobs in the private sector. The £2.5 million doesn't come out of the social security budget.
Look at it this way: Your £2.5 million saved will likely now be consumed on luxury goods. Say you buy a yacht and car. The manufacturers of those items pay wages and make a profit which is spent again in the economy which is spent again in the economy. You could generate about £25 million worth of economic activity by consuming that £2.5 million rather than paying tax. A flat 25% tax on £25 million is over £6 million. The treasury is massively better off.
[edited by: oddsod at 9:52 pm (utc) on Feb. 15, 2006]
I earn $10 mil, and and pay 50% in taxes. If the 25% flat tax is instituted, I would only pay $2,500,000 and the state is $2,500,000 short
Well, no, because if you're earning that much then you've got accountants working overtime for you to exploit loopholes and you have offshore investments and you're buying favours from politicians and you're not paying anything like 50%.
By removing the loopholes, there's a fair chance that the government might get more of your money than they would otherwise. And as oddsod points out, the tax bureaucracy is made more efficient and the government requires less tax money to keeping the system running.
And furthermore, the extra money flowing into the treasury enables the government to boost the basic allowance so the people on crap wages will have a lot less tax to pay and be better off in real terms.
It's not taking advantage. It's taking what's due.
Yes, that's what I meant - I wasn't trying to imply any undue victimisation. Bad choice of words perhaps.
"take advantage" as in "enable themselves to have access to" is what I meant. (Yes, it was a bad choice of words).
Does eBay ask its sellers to declare where they pay tax?
An excellent question! Does it?
usually there is fine line between "what's due" and "taking advantage," but in this case it's not even close as taxes rates have reached astronomical rates. If you said what they must legally pay, no one would argue.
BTW - you pay tax on profits you declare, not your ebay sales or any other sales for that matter.
However you are obliged to declare all sources of income and profits. So if you make a living on eBay (or part of one) you have to declare it. That's my interpretation of English law anyway.
So to solve the problem, eBay should make it a requirement that sellers declare where they pay tax.
However you are obliged to declare all sources of income and profits.
Only if you investigated and asked to.
In the UK you file the amounts of incomes, expenditures,assets and liabilities - no sources are requested.
At this point you have to register with the IR and fill in a tax return every year.
Any nett profit over your taxable allowance is liable for income tax at the appropriate rate.
On the other hand, if you are already employed elsewhere and you make a nett loss you can get a rebate from the tax you have already payed from you other income source.
The revenue have an idea how to plug the ebay hole it is just questionable whether the government would go for it
That's my interpretation of English law anyway.
Did you mean British law?
Jock.
