Britain INCREASES tax on ebooks

[GeoffC]

Originally Posted by astra

If I understand correctly, he says that there is very high tax if you earn more than a certain figure.
For example:
If you eran 15K pa., the tax is 20%, so you pay 3K
If you earn 40K pa., the tax is 30%, so you pay 12K
If you earn 51K pa., the tax is 40%, so you pay 20K
If you earn 100K pa., the tax is 50%, so you pay 50K

If you earn 15K, then the first £6,475 (currently) is tax - free. It's higher when you reach 65 at £9,490. The UK emergency budget increased this by £1000 for the year 2010-2011 - perhaps to reach the intended 10K eventually ?

[JordanRHughes]

Originally Posted by garygibsonsf

In a fairly shock move discussed at the link below, the new 'emergency budget' raises VAT on ebooks (and also audiobooks) to 20%, which I'm sure will piss off many UK readers who frequent this forum, myself included.

http://www.thebookseller.com/news/12...off-books.html

I'm surprised they haven't taxed the air yet.

[GeoffC]

Originally Posted by JordanRHughes

I'm surprised they haven't taxed the air yet.

funny you should say that .....

[tompe]

Originally Posted by astra

If I understand correctly, he says that there is very high tax if you earn more than a certain figure.
For example:
If you eran 15K pa., the tax is 20%, so you pay 3K
If you earn 40K pa., the tax is 30%, so you pay 12K
If you earn 51K pa., the tax is 40%, so you pay 20K
If you earn 100K pa., the tax is 50%, so you pay 50K

However, if the percentage was the same 20% for everybody, then people who earn would not have to find ways to hide their income.

Why? The opinion that the percentage must be the same regarding of the income seems arbitrary to me. I do not see how you can use an argument that makes it OK for high income persons to avoid taxes that cannot be applied to a lower income. A rights based argument would be applicable independent of income level for example.

[ATimson]

Originally Posted by tompe

I do not see how you can use an argument that makes it OK for high income persons to avoid taxes that cannot be applied to a lower income. A rights based argument would be applicable independent of income level for example.

That depends on what rights-based argument you're using. If you're saying that nobody has the right to be taxed, then, yes, that would be independent. If you're saying that nobody has a right to be taxed in a discriminatory manner, then it only applies to people above the lowest tier.

[pdurrant]

Originally Posted by GeoffC

In my scenario I am assuming that after 2 years, I would sell ... capital gain losses are (as far as I understand it in the UK) not tax deductible, for me as an individual.

They are against other capital gains.

Lose five million on the Picasso. Gain five million on a Rembrandt. Net liability for capital gains: 0.

I believe losses can be carried forward for several tax years.


[whoops - late to the thread]

[pdurrant]

One interesting thing about marginal tax rates is what happens at the very bottom of the scale.

Take a 30-year old, single, long term unemployed person currently in a shared house, paying £75 a week in rent but with no savings or income.

In the UK they would receive about £140 a week in Income Support and Housing Benefit

Now suppose they get a half-time (20 hour) job at minimum wage. That'll bring in £116 a week.

They now have no entitlement to Income Support, and their housing benefit drop from £75 to £42 a week. Total weekly income: £158.

That looks to me like a marginal tax rate of about 85%!

And people complain about a 50% marginal rate on income over £150,000 pa?

[DawnFalcon]

Originally Posted by HarryT

For the same reason they are everywhere else in the EU: the EU's eCommerce VAT directive requires them to be.

No, it does not. It requires, IF they are classified as digital media, that some rate of VAT be charged. Spain used an incorrect justification, they'll get it sorted.

And for takeaways, there is an exception for cold takeaway, but not hot.


ATimson - No, just simplify the tax system to bring an end to their evasions. Sorted.

pdurrant - Yea, and ironically the net effect of these tax changes is to *increase* the number of people who will have a marginal tax rate of 90% (you forgot council tax benefit) if they find minimum-wage work.

[MovieBird]

I'm curious, in the US you're only allowed to apply $3,000 in losses each tax year. A common practice is to "tax loss harvest". Let's say you invested $100,000 in the S&P 500 index fund, which dropped 12%. You then sell your S&P 500 shares and immediately invest in another, somewhat similar fund, say a Total Market Fund. You've just "lost" $12,000 but because the new investment is very similar to the old investment, when the S&P 500 recovers 12% the new fund should recover a similar amount.

Now, you can only apply $3,000 of that "loss" each year, or over 4 years.

Is there a similar cap in the UK, or can you apply that whole 12,000 against capital gains in the first year?

Another off topic question, are capital gains treated as income, or are they taxed at different rates such as in the US?

[Bremen Cole]

Originally Posted by Bilbo1967

These aren't the actual thresholds in use in the UK, I think that they are 22%, 40% and 50% (40% kicks in at 40k and 50% at 100k I think, but don't quote me on it). This means that you don't get the situation where it's better to be paid 99k rather than 100k for example.

In the US you can get into the situations where you make more money, by making less. A few years ago I actually took home less money after a raise, than I did before it. I even tried to talk the company into taking the raise away, and rolling it into the next years raise so it would be worth it......

These complex taxing schemes can create some interesting problems....

[nguirado]

Originally Posted by Hadel

I admired UK because the government made the access to the state museums free of charge.
But raising the tax on books is clearly working against your nation's future!

Maybe making things "free of charge" is why the state has to raise taxes.

[tompe]

Originally Posted by ATimson

That depends on what rights-based argument you're using. If you're saying that nobody has the right to be taxed, then, yes, that would be independent. If you're saying that nobody has a right to be taxed in a discriminatory manner, then it only applies to people above the lowest tier.

But you have to define "discriminatory manner" and I do not see how to do that in a non-arbitrary manner.

[J. Strnad]

It isn't the luxuriousness of the items in my example, oh so long ago, that caused them to be taxed higher, it's simply the cost. So an ebook (Remember ebooks? It's a board about ebooks.) would be taxed more or less than a print book based solely on its price.

I've never actually seen a tax rate inhibit a wealthy person's desire to make money, btw. And if it does, so what? Maybe they'll find something else to do with their time, like volunteer at an elementary school or build homes with Jimmy Carter or play with the kids or something. What's wrong with saying, "Okay, I've earned enough money this year, let somebody else grab a few bucks?"

Sorry if I seem insensitive to the problems of the wealthy but, it's only because I don't give a crap about the problems of the wealthy. If it's so damned hard being rich, give your money away and quit whining.

[DawnFalcon]

Originally Posted by nguirado

Maybe making things "free of charge" is why the state has to raise taxes.

Yea, never mind that it actually raises tourist revenue overall. By an appreciable percentage. Ahh, the minds of the "cut and tax only" brigade.

J. Strnad - Heh. I'd tax uninvested wealth. THAT would get the rich screaming.

[jbjb]

Originally Posted by J. Strnad

What's wrong with saying, "Okay, I've earned enough money this year, let somebody else grab a few bucks?"

Perhaps because it's not a zero-sum game? A wealthy person choosing not to make any more money doesn't "leave more" for others. In fact, wealthy people making money frequently involves activities (like starting or growing businesses) which *make* money for others.

/JB