UK Tax System Essay Example | Topics and Well Written Essays - 3250 words

UK Tax System - Essay ExampleWith the governments source taken from the public levy everlastingly greater than the amount that is intended for use by the government, taxes are levied to fund several programs. Other governmental policies are also geared towards the redistribution of wealthiness from the rich and poor respectively in relief operations, public education, social security benefits and reparations. However, fundamental methods of collection are not foolproof and possibilities for inefficiencies are always prevalent. Tax policies being a highly political and controversial issue do require extensive analysis and determination on its viability to gain the give sectors acceptance and economic performance. The neo-classical economic theories whose studies believe that taxation brings about economic inefficiencies have suggested changes in the tax systems that would work to minimise the distortion. Tax remittances of the ordinary works sector accommodating deficiencies brou ght about by certain deficits were seen as the basis for the recognition of its disadvantages. However the complexities of the British Tax system have served to greatly plus the stress and expense to millions of taxpayers as tax season approaches in Kay(1990)1. Simplification of the British tax system has allowed the common platforms of mevery political parties in grandstanding tax rules and exemptions. Disadvantages in the assessment, calculation and collection of taxes are often criticized as ineffective and administratively expensive according to Emes and Clemens (2001)2. Determined to maintain absolute performance of the economy, changes were aimed at creating several programs that redistribute wealth and prosperity to all. Tax cuts became a scene in fiscal reforms that has announced reductions in income taxes and simplification of the system which focused on the tax laws themselves without upsetting the current balance of tax burdens or taxes paid by the individual. Alternativ e tax base system was introduced that basically focused on income, expense and wealth. Income derivatives in the corporate ladder include Value added tax (VAT) and excise taxes while individual income tax has pre-existed along with social insurance continuity. On investment and entrepreneurship, under expenditures or consumption taxes, capital gains and sales taxation is considered tentative in nature. Property tax summarized under wealth taxation has gained withstand claiming that anti-wealth tax is funded by a coterie of wealthy taxpayers whose instinctive rejection of the system comes from the broad aspiration to become wealthier and amass more fortune by every means.Income derived from gainful employment pensions shares and dividends interest on savings and trust and rentals is deemed taxable at a certain level. Forming the bulk of revenues for the British government, each earning person on a lower floor the age of 65 is afforded an income tax allowance or a tax-free allowance each year of 5,035Gbp. For earning persons of over 65 but below 74, any income above 7,280Gbp is taxable while elderly individuals whose income is below 7,420 are exempted from paying taxes. But where income is in excess of ones tax-free allowance, taxation is based on the age-related allowance. Earners, whose income is 1 to 2,150 above their mandated tax allowance, shall enjoy a flat 10% tax rate. Those whose accumulated gross