GOV TAX CREDITS fraud - Beware!

Aren't there social security taxes on top of these (like NI)?

Yes, and the tax bands are much wider for married couples filing jointly, so the fact that married couples support each other financially is recognised in the tax system, unlike here.

Here they still manage to recognise it in the benefits system though, a married person trying to claim means tested benefits will always be asked how much their partner earns (same applies to unmarried couples living together).

No doubt, but to do so would mean the firing of 10s of 1000s of state employees.

One doesnt need much in the way of Benefits officials when say the 1st grand/month is exempt and the remainder is flat taxed at say 30-35%.

greg

Those who could disappeared and paid their taxes in some other jurisdiction.

Those who were left quite rightly did all in their power to frustrate such state sanctioned theft, thus reducing the overall take.

Yes, levied at about 1/2 the UK rate.

Unlike the UK its not a thinly disguised additional income tax.

And they manage to do so without the state consuming silly amounts of GDP.

greg

that's not a reason for taxing people (coz it gives other folks something to do) - that's like saying we cant use wheels on cars coz we currently employ

anyway, no doubt they would be redeployed futher up the tax chain

That hasnt stopped govts interfering in that manner previously.

greg

"Greg Hennessy" wrote

Are those just *federal* income tax rates? What about *state* income tax rates??

Single digit %ages varying state to state.

Unlike here in the UK, mortgage interest is deductible from the gross.

greg

My understanding was that child benefit is not means tested and thus an assessment is not needed ?, has this changed ?

Regards

Ian

How about property taxes? I've heard some real horror stories of families forced out of their homes for non payment of those.

not as far as i know - but Family Credit (another child benefit) [is] means tested

Child benefit isn't means tested. The 3 assessments I was talking about were for:

It's surprising how high up the income scale a family can go yet still be eligible for HB... a family on 25,000 who rent are likely to be eligible, which shows how crap the tax & tax credits system is.

It is actually similar here at that level of income, if you cancel out taxes with tax credits and child benefit.

The big differences here are that such a family would have to jump through masses of bureaucratic hoops, paying taxes and then getting them back in tax credits & benefits. Also if their earnings rise above the "break even" point, they'll effectively get taxed at 70% or possibly 89.5% or even more on earnings above that point.

AFAIK they vary state by state and are deductible.

A few years ago when I told someone what I was paying in Council Tax annually compared to what he was paying in New Jersey, he nearly choked on his coffee in horror.

Try holding onto your house in this country if you owe the IR or HMC&E money and cannot pay.

greg

The last time I looked at this, $30k PPP adjusted is around 20-21K sterling.

All figures from the IR.

The tax + NI on £20000 is around £4700,

Less child tax credits for 2 sprogs £1161.76, Working tax credit entitlement £0

Less Child benefit== 27.55*52 £1432.60

Giving Net tax contribution £2105.64

Now add ~£1200 council tax paid for out of net income £1568.62 (1568.62 being the gross ) (15300/20000 = 76% net)

So a hypothetical UK couple pays £3674.26

more than what their equivalent would in the US.

Never mind the yawning gap w.r.t indirect taxation.

greg

Currently 1 = $1.80, making $30,000 = 16667. Are "PPP" rates something to do with purchasing power rather than the actual exchange rate? If so then where do assess the purchasing power, since 100 will buy you more in Linconshire than London, and I guess similarly $100 will get you more in Kansas than California.

I make it 4793.

I make it 2022.

Agreed.

The "break even" point (income tax + NI = tax credits + CB) for such a family in the UK is 18088, but anything above this is taxed at 70% up to about 24,000.

Why are you grossing up the council tax?

Would the American family pay no property taxes?

True. Although the US family are likely to have much higher medical bills/insurance payments - any figures on these?

Yes.

I used the OECD PPP figure for the UK. One assumes it's adjusted for that.

I used the IR webform, 2 kids under 16, partner at home not working or claiming welfare, no child minders.

Not all states have property taxation, I believe they are deductible, hence the gross up.

Unlike the UK, FWICS some states have exemptions or reduced rates for the low paid & pensioners.

The average US worker and family will be covered under their employment scheme.

That's a rats nest. LOL.

Interesting insight here

IIRC that calculator works out your entitlement from today's date till the end of the current tax year - not your annual entitlement. Try using it next week and you'll get a lower figure.

It would make more sense to calculate the net property tax in the US. If the family have no liability to tax anyway, then property tax being tax deductable doesn't really help them.

Well, we do have council tax benefit. But it is means tested (rather than income tested).

The average US worker will still have medical expenses. A typical health insurance may require the insured to pay the first $30 towards the costs of any treatment, and 20% of the expenses above $30, subject to an annual limit of $600 per person and $1800 per family. (I.e. once you have spent $600 of your own money, the insurer will cover everything.)

The Cato Institute is a right-wing think-tank, but many of the things in this report are very true and apply to the NHS.