In the UK, if the taxman screws up, he'll give the money back at the end of the year

True here as well. However, I think Bitt's point is that how are we to know if the taxman screws up without the process we go through of delcaring our taxes every year. That's why the word automatic sets off some warning signals. At least I think that's his point. I hadn't heard about any of this this until this thread.

Edit: actually the word "automatic" isn't used anywhere, but I'm gathering that's the idea.

I occurs to me that this is somewhat interesting, so I'll describe how US taxes work. Amongst the most obvious ones are sales tax, which is generally analogous to your VAT, as I understand it, in that you pay an additional percentage of your purchase to the government. This tax goes to state and local (usually county) governments. It's really a tax paid by the seller, but it gets directly passed to the consumer in probably more than 99% of the cases.

Then there's income tax. Most of us fill out a federal form at the beginning of our employment tenure called a I-9 that is used to tell the employer how much to take out of our paychecks. It asks you to describe, essentially, how many people there are and how many jobs are held in your family. Then some magic unseen formula is used to determine how much gets withheld every pay period. Those who are self-employed use a different set of forms used to pay esitmated taxes that they send in themselves on a regular basis. At the end of the year, you get to fill out forms used to determine how much you needed to pay for that year. If you paid more in those withholdings, you get it back. If you paid less, you get to pay up. If you paid a lot less, you get to pay up plus a penalty. (Which is why people pay estimated taxes instead of just waiting for the year end.) Then you do it again for the state. (Some states don't have income tax, though, IIRC.)

There are some other taxes, too, like those used to support Social Security (which is mostly federally sponsored old-folks pensions) and some others that I forget right now. There's also an income tax on ``Capital Gains'', which are investments that made money over the course of multiple years. It's taxed at a lower rate than regular income tax. There are also property taxes that you pay on cars, houses and other big possessions that get remitted to the state or local governments. There are random other things, too, but that covers probably 95% of the outlay.

Some states don't have income tax, though, IIRC.

Correct. For example, Texas does not have a state income tax.

I’m afraid also that Bitt is leaving out a big portion of the tax system here with regards to income tax: credits and deductions. Certain activities or situations allow people to pay less income tax at the end of the year and so two people with the same salaries can end up with drastically different bottom line payments. Marital status, number of dependents, giving to the church, loan interest, and everything else other the sun can cause you to play less in taxes than the simple percentage everyone has to pay.

While this is nice and all, it ends up making the whole process horribly complicated to the point that it is ridiculous for me to actually try and fill out all of the forms myself. I hire someone to do my taxes for the simple fact that I'm afraid of making some silly mistake and getting the IRS after me (which will happen if you don’t fill it all out exactly right). So there are professionals who prepare tax forms for people, and some are better than others (for example, I ended up owing 2K one year by one accountant, took my information to a second and ended up only paying 1K). The net effect of this is that the amount of taxes you pay can be drastically affected by who is preparing the forms, and IMHO that just isn’t right. But then again, I don’t know a better way do to it. If we want to use tax break incentives for certain activities then I guess we’re stuck with a complicated tax code and the people with the best accountants getting the best breaks.

OK. That's all interesting stuff. Here's how it works in the UK:

VAT (sales tax)

VAT is analogous to Sales Tax, except that it all goes to Central Government. This is generally 17.5%, but is less for some things (e.g. household fuels) where it's 5%. Some items (those classified as essentials) are not subject to VAT.

VAT is included (where applicable) in the price tag shown on each item in the shop, so there's no need to remember to add it on when shopping. I always get caught out by this in the US.

The exception to this rule is office supplies, computers, etc.. These are generally bought by businesses that can claim the VAT back, as long as they charge VAT on their products/services. Here the price is generally listed both with and without VAT included. Businesses still have to pay the VAT, but because they can claim it back, the lower price is useful to them.

Duty

Certain other things (petrol, diesel, alcohol, cigarettes, etc.) also have "duty" added to the price. This is partly a way for the government to chisel more money out of us, and partly to discourage us from smoking/drinking/etc..

Income Tax

Income Tax is normally paid monthly. Each person is assigned a "tax code", which tells the employer how much pay to withhold. This money is sent to Central Government, via the Inland Revenue (the taxman). If you're self-employed, I think that you have to do this yourself.

At the end of the tax year, you generally have to fill in a tax return, which tells the government what else you earned that year (interest on savings/share dividends/etc.). Then you'll send that in for assessment, and the taxman will either send you a bill for the outstanding amount or a cheque for what you overpaid. Alternatively, the taxman has the option of adjusting your tax code so that you pay more/less next year.

Often, you won't have to fill in a tax return -- your employer will send a form P60 to the taxman at the end of the year, and they'll sort it out from there.

We don't have to fill in any form similar to your I-9. The taxman generally assumes that you'll earn the same this year as last year, and assigns you a tax code based on that. If you've never worked before, you'll get assigned a special code and have to pay "emergency tax". Any discrepancy between this and what you should have paid is sorted out at the end of the year.

Income tax is assessed on an individual basis, not per household.

National Insurance

Then there's National Insurance, which is in addition to Income Tax. There are two flavours of NI. Employee NI is withheld from your monthly salary. Employer's NI is paid in addition to this, and doesn't come out of your salary. Obviously, the employer will factor this in when he decides whether to hire someone. This goes towards the NHS and State Pension scheme.

Council Tax

We also have to pay Council Tax, which goes directly to the local authority, and is assessed according to the value of where you live (whether you own or rent). The local council can also apply to Central Government for extra money from the Exchequer.

Then there's all the other little taxes, like the Road Fund License and stuff like that.

As Jeff points out, filling out the tax form at the end of the year (which is the 1040 form, if you ever run across that in some pop culture reference) involves an absudity of rules. Most of this has to do with how much you get to deduct from your yearly income as living expenses. You can either go with the standard of some amount per person or you can ``itemize'', which means listing all the things that you paid over the year that count towards that. The usually biggest thing that comes up there is interest paid on real estate, so unless you have a mortgage, usually you end up taking the standard deduction. Those that do have a mortgage end up going through all of their receipts for the whole year figuring out what's deductible and what's not. This is where people get in trouble for cheating, mostly.

We have taxes like the ones you list under duty, as well, but they're not as significant as the ones you pay (at least on auto fuel), so you don't really think about them. But fuels, tobacco, and alcohol all have taxes applied, even if they're mostly hidden within the price you pay (except for gas, which always has that nine-tenths of a cent per gallon tacked on, which is part of the tax).

Often, you won't have to fill in a tax return -- your employer will send a form P60 to the taxman at the end of the year, and they'll sort it out from there.

That would be nice. I'd love to not have to "do taxes" every year. Unfortunately our whole system of credits and deductions makes this impossible.

I don't think that that's true. If they really defined what was deductible at what level, and have that stuff reported to them, which is mostly done already, then they could do that.

Personally, I'd feel uncomfortable with that, because I know the quality of the employees that the government generally hires. But, then, I can usually do a 1040EZ, or at least a really simple 1040A with no penalty, so it doesn't take me too long to do it.

BTW, I bring it up most every year, but some of you may want to check out TaxACT, a free piece of tax software. I've done my taxes with it for the last several years and have been quite happy. Their electronic filing is also usually pretty cheap, and I've done that once or twice.

... a free piece of tax software. I've done my taxes with it for the last several years and have been quite happy. Their electronic filing is also usually pretty cheap, and I've done that once or twice.

I've done mine online and Efiled for several years now. No muss, no fuss, and quickie refunds.

I have completely lost faith in my country and its people in the last year. That is a hard thing to lose, and it has helped make 2003 one of the worst years of my life. I really don't see 2004 being any better, and I have no hope anymore that this country will come to its senses anytime soon. I hope when we do it is not too late.

Sigh. I sigh with you. Back when my country elected (really elected, IIRC) the co-star of Bedtime for Bonzo, I was horribly disaffected. I seriously considered trying to become a Canadian citizen (got all the paperwork and filled half of it out)....then other life events distracted me...

So here we are years later with a monotonous cretin who makes an early-onset Alzheimer president look *good*. Yes, hard to believe, but it is even more depressing. OK, Ronnie and Nancy had wacky, lovable notions of good, evil and Armageddon, but they had nothing as depressing as Shrub's retinue (OK, Reagan had a lot of them!) and the born-born-born again likes of Delay and Ashcroft.

Ick! Icky, Icky, Icky!

OK, if you don't vote, I understand.

But I have a suggestion. Join me in my new initiative: National Hold-Yer-Nose and Take a Hip Flask to the Polls Day. Yes, a bunch of us plan to take the day off, pour some Knob Creek into our Triple-Tall No-Foam Low-Fat Lattes and then meander down to the polling place to pull some levers, dimple some chads and maybe chat up some elderly, lovable female poll workers.

Join us?

Dean, on the other hand, really scares me.

Those are very good points, and, I think, are caused by some of the reasons I do like him. That he doesn't always have a prepared answer that he tries to fit into whatever question is asked of him. He seems to speak honestly. Some of that honesty is not what you (or I, much of the time) want to hear, but I appreciate that effort, or, maybe, lack of effort. But I agree that much of what he says is disconcerting.

Yes, some of the reasons I like him, too. My love isn't unconditional, though. He has made some stupid statements and the voids in his policy map are pretty apparent. As it seems pretty apparent that he will be the Democratic nominee, I hope Dean's ship will still float after his Democratic opponents get done with their cannon fire. Wesley seems less positioned for VP now, so Dean/Edwards?

The most disturbing bits coming out of the Dean camp haven't been bloopers so much as really horrible, transparent ploys -- stuff about Dean trotting out his religious convictions and relationship with Jesus. If these didn't seem like jaundiced, cynical, "southern strategy" types of moves, I would not be so close to throwing up.

Howard..... Howard!!!!

Howard..... Howard!!!!

Here's what I don't get. Is there any reason more Democrats aren't voting for Clark other than the fact that he jumped in late? It seems to me that the Dean momentum snuck up on everyone, and when he appeared at the top of the early polls, nearly every Democrat seemed to jump on the "well, he's not Bush" bandwagon. Well Clark isn't Bush either, and he's certainly come out with a more error-free campaign (unless you count starting late as an error.) It really seems to me like people are holding onto Dean simply because he's a new name on the Democratic landscape, he's at the top of the polls, and he's got a chance to beat Bush.

So I guess my question has two parts... First, can anyone poke holes in my theory that people who might otherwise be tempted to vote for another candidate (be it Clark or anyone else with a prayer of being nominated) are simply too scared to switch to someone else because it would lessen the appearance of solaridarity amongst Democratic voters? Second, is there any precedent for a guy like Clark (a political novice entering the campaign late) to actually make headway and win the nomination? I really think there's some kind of dynamic in this "grassroots Dean momentum" that smells of a bunch of Democrats that aren't voting with their hearts, they're just too chicken-shit to consider switching to someone else who isn't at the top of the heap right now.

Here's what I don't get. Is there any reason more Democrats aren't voting for Clark other than the fact that he jumped in late?

It does appear that Dean is getting more airtime in news spots than the rest of the Democrats put together. The conspiracy theorist in me would believe that the Powers-That-Be have decided that he is the best candidate (ie credible but beatable) and that allowing Clark to win the primary would be far too dangerous for the incumbent.
Seriously though, I haven't the faintest idea. If Gore hadn't given his endorsement to Dean then the race would still be more open. The Clintons' endorsements could have been useful to Clark except for that little cigar incident.

The Clintons' endorsements could have been useful to Clark except for that little cigar incident.


Yeah -- that would cost him the Cuban vote for sure.



tanstaafl.

Except if you earn above a certain amount you have to fill in your tax return - which should be simple for someone like myself with no savings, no stocks or shares, no extra incomes, but most of the questions on the damn thing make no sense to me at all!

At least the tax code gets altered when you have a wife and kids, and you get an extra childrens tax benefit, which helps offset the huge amount you have to pay in Council Tax.

But my least favourite tax is the speed camera tax, which doesn't go towards making road improvements or anything like that, blimming cameras!!!!

But my least favourite tax is the speed camera tax, which doesn't go towards making road improvements or anything like that, blimming cameras!!!!

If you have time to spare there is lots of fun to be had here! I haven't had the opportunity yet, but plenty of people are having fun filling up the courts and wasting the "Safety" Camera Partnerships time by challenging all and every part of the process and taking them all the way to the High Court. Many cases get dropped when the Partnerships don't want to challenge certain points or would rather spend their time issuing more tickets!

Some links for those interested:

http://groups.yahoo.com/group/unsigned_forms/
http://pepipoo.com/NewForums2/index.php
http://ww.safespeed.org.uk/

Gareth

Is there any reason more Democrats aren't voting for Clark other than the fact that he jumped in late?

Like I said, I haven't voted at all. (And I assume you mean this poll, not the US populace.)

My first reason to distrust Clark is that he's a career-miltary Democrat? That's a little hard to swallow. I need to study his military record more closely, but I don't want someone who's gung-ho. I cansee how being in the military could lead you to that viewpoint, but I can see how it could bring you to be reticent to engage in military action, while being capable when necessary. I'd love the latter, but hate the former possibly more. His current rhetoric doesn't lend itself either way. All he's said is that attacking Iraq was wrong because they had nothing to do with terrorism, which I agree with. But that begs the question of what should have been done instead. My preferred answer would be that we should have secured Afghanistan and dealt with North Korea diplomatically, perhaps pushing the UN to deal more strongly with international human rights issues, including those in Iraq. But I fear that his might be that we should have attacked someone else instead. It would definitely be better than what happened under Bush, but not my ideal situation.

I like his tax simplification ideas and the push to get the rich to pay more, but I'm not sure if that might imply a conservative fiscal standpoint, which I'm not a fan of. I think that it takes money to make this country work, and the more I see tax cuts, the more worried I get. Not, again, that he's said ``tax cuts'', more just ``tax redistribution''. But it raises a flag.

I realize that I now know more about Clark's fiscal policy than anyone else's. I need to do more research.

I haven't had the opportunity yet...

I might. I got flashed this morning on the North Circular . Hopefully there was no film in the camera, or my plate was obscured by the guy in the left-hand lane.

Some items (those classified as essentials) are not subject to VAT.

And there are some interesting stories here.

The humble Jaffa Cake was classed as a biscuit by HMC&E until a court case by McVities who demonstrated that the ingredients were the same as a cake, and they were not a biscuit at all. The government changed the rules and now VAT applies.

Also, flavoured milk drinks are not luxury items and at McD's the milk drinks (not thick shakes) are VAT-free if you take them away. (resturant meals always have VAT added)

Apparently there was a higher rate of 25% during a previous government, but this was added on certain photographic and video items but applied on their intended use. This meant that an item (eg. scissors) sold in a staionery shop could have the 15% rate but if sold for photographic use would have 25% VAT applied.

Gareth

How 'bout John "F'N" Kerry? He took Iowa and now New Hampshire? I didn't see that coming and was hoping Howard Dean would win the primaries since it would be a lot easier for Bush to win against him. John "F'N" Kerry may give ol George dubya a run for his money.