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Income tax payment
bwenyenye
#21 Posted : Thursday, May 12, 2011 12:17:44 PM
Rank: Elder

Joined: 5/24/2007
Posts: 1,805
Guys,

I have never understood the concept of 'equity' in taxation. Why should one pay more in tax simply because they earn more yet they utilise the exact same government services as the guy who makes less ? Normally the other guy uses more of government utlities e.g public hospitals and schools. Just a thought!
I Think Therefore I Am
'user'
#22 Posted : Thursday, May 12, 2011 12:26:09 PM
Rank: Veteran

Joined: 12/3/2010
Posts: 1,141
Location: Londokwe
Ric dees wrote:

On a slightly different tangent, would it not be prudent for say any one earning above a net of kshs 200k be charged 40% and the rest 30% and those earning a net of 50k and below be charged 20%.
Anything above 500k should be at 50% (do i hear mps say aye)!!

So my question is would this aleviate the feeling of 'un-equalness' across people earning differently??


My bossom buddy ,Best friend Ric Deessmile smile the taxman knows that most reliable salaried tax payers( teachers(TSC was the highest institutional tax payer last year) nurses, policemen earn less than 30,000 in income.Changing the tax rates would severely hit the tax revenue.Hence itakuwa populists to charge 20% for those earning less than 50K as long as our taxes are not used efficiently( Read in a corruption free environment).

2012 is here.Kenya is Ours.Be Part of The Peace Keeping Mission To Protect Our Motherland.Say No To Violence and Tribal Hatred .If you can read this,wewe ni mtu amesoma, usifikirie kama mtu hajaenda shule .Ni Hayo Tu
mozenrat
#23 Posted : Thursday, May 12, 2011 12:27:30 PM
Rank: Veteran

Joined: 5/18/2008
Posts: 796
mukiha wrote:
mozenrat wrote:
'user' wrote:
Mozerat, I have no problem paying even 60% if the the tax collected is put into good use(schools hospitals roads and other public goods), not foreign trips , paying bloated cabinet , overpaying Mpigs only to block Parliament buildings sewerage system with Condoms and sh8t.



That is where we differ. I have a problem paying anything above 10% tax especially when I know that nearly 80% of the budget goes to recurrent expenditure.. to pay salaries for people who do not produce anything.. New governor, his secretary, his guard at work, his guard at home, his tealady at work, the KYM who rushes his suits to the dhobi... yaani by the time you're done..

Argggh!! I still don't understand how people could have voted for this new constitution...

NOT true: in the 2010/11 FY, out of the total budget of Sh998.8b, Sh320b (32 per cent) goes towards development and Sh675b (68 per cent) to recurrent expenditure... SOURCE: 2010 budget speech


Oh sorry.. I meant nearly 70%.... otherwise everything else holds.

When I said differ.. I meant the fact that you are willing to pay such high percentages of tax.. I disagree at a very fundamental level that there is something special about the people in Govt (any Govt) that they somehow know, better than I, what to do with 30% of my earnings. As far as I can tell most people in Govt (from Obama to Museveni) are there coz they can make lots of noises, nothing more.
mozenrat
#24 Posted : Thursday, May 12, 2011 12:35:43 PM
Rank: Veteran

Joined: 5/18/2008
Posts: 796
bwenyenye wrote:
Guys,

I have never understood the concept of 'equity' in taxation. Why should one pay more in tax simply because they earn more yet they utilise the exact same government services as the guy who makes less ? Normally the other guy uses more of government utlities e.g public hospitals and schools. Just a thought!


@bwenyenye.. I'm still looking for someone to explain this one to me.. Why? Why? Why?

I think its ok to have a threshold below which one doesn't pay income tax, simply to reflect the ideal minimum living standard (much in the same way as minimum wages are set) but why should one pay 50% while another pays 40% on their wages??

Obaks may have inspired many people to become conscientious tax payers (although he doesn't pay any himself) but really I think Republicans have it right, the Govt should have little or nothing to do with my life.
Ric dees
#25 Posted : Thursday, May 12, 2011 12:53:34 PM
Rank: Member

Joined: 3/6/2008
Posts: 632
@Mozernat & Bwenyenye

Simple with this, we will see an increased in specialization services catering for those in the higher tax bands (read more jobs, more tax for government) ie specialised road lanes for the affluent like in Russia.

The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday's logic.
mukiha
#26 Posted : Thursday, May 12, 2011 3:55:26 PM
Rank: Elder

Joined: 6/27/2008
Posts: 4,114
mozenrat wrote:
bwenyenye wrote:
Guys,

I have never understood the concept of 'equity' in taxation. Why should one pay more in tax simply because they earn more yet they utilise the exact same government services as the guy who makes less ? Normally the other guy uses more of government utlities e.g public hospitals and schools. Just a thought!


@bwenyenye.. I'm still looking for someone to explain this one to me.. Why? Why? Why?

I think its ok to have a threshold below which one doesn't pay income tax, simply to reflect the ideal minimum living standard (much in the same way as minimum wages are set) but why should one pay 50% while another pays 40% on their wages??

Obaks may have inspired many people to become conscientious tax payers (although he doesn't pay any himself) but really I think Republicans have it right, the Govt should have little or nothing to do with my life.

There are two reasons:

FIRST: People who earn higher are not greatly affected by deductions from their incomes. If you take 30% from a guy earning 1m, he is left with 700k... what you can do with 1m per month you can do with 700k in two months!

But if you take 30% from a guy who get 10k, he is left with 7k and after paying rent, the balance might not be enough to buy food for the remainder of the month.

Thus this school of thought says, why not tax high incomes at a higher rate than smaller ones to compensate the poor guys?

SECOND: This is tied to the first. It begins with appreciating that it is only fair not to tax lower incomes for same reason as above. But as soon as you say than people earning less than, say 10k shall not be taxed, the people just above the threshold will complain that they are being overtaxed. So you introduce them to taxation gradually, starting with 10%, the 15% and so on.

Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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