Re: Jobs going?
"Ok. That means less Income Tax/N.I. paid but more people on the Dole.
Can someone explain to us mere mortals, how that is sustainable?"
Its actually quite simple, with lower wage bills corporation tax would increase.
Because £11,500 of wages at the moment are not taxed low paid workers dont pay much tax anyway.. they are the ones first to be replaced.
So if you look at a low paid worker on 12k a year they are only paying 20% tax on £500 (£100 income for the government.
However if that person is replaced by a machine the companies profits are increased by £12000 *
Corporation tax is currently 19% BUT its a flat 19% with no allowances so the government would collect £2400 in corporation tax.
Even if the robot costs 11k a year to lease and maintain it would still result in a higher tax take for the government because of the different way the taxes are structured.
* I know the cost of the machine needs to be factored in as it would be an expense, Im trying to keep it simple at the moment!