[rusk]

By this reasoning I should only be taxed on income once food, fuel and housing costs are taken into account, or am I missing something? I end up paying VAT on a lot of these things as well ...

I do get tax credits for some essentials but it's relatively speaking a miniscule amount.

There's an interesting formula for a progressive tax regime if anybody wants to take it up ...

[icebraining]

That's kind of the purpose of deductions; it's common for housing (particularly mortgage), education and health costs to be deductible on one's income tax, much like a business deducts its expenses to calculate profit.

Taxing only your disposable income would mean that a person living in a mansion would pay much less than someone living in a small home, which is weird; arguably, the extra niceness of the house is "profit", whereas the shareholders don't usually benefit from paying more for their inputs (some exceptions notwithstanding).

[pault]

> Taxing only your disposable income would mean that a person living in a mansion would pay much less than someone living in a small home, which is weird;

Just as weird as a corporation with billions in revenue paying a zero or negative tax rate? Or weirder?

[icebraining]

Not as weird :)

[smallbigfish]

>it's common for housing (particularly mortgage), education and health costs to be deductible on one's income tax

Oh! What's the name of this country?

In my country all taxes are applied before you get to see the actual money.

[rusk]

Tax credits == Deductions