finances question: how much taxes paid over 40-yr work history

[redrobot]

can anyone help work out how much tax my dad wd have paid over 40 years working in uk. i dont have exact figures and am happy with an estimate.

he began work in 1955, probably earned 20pounds a week, UK income tax wd have been about 25%

by 1995 he was earning 50 000 pounds pa.

if you guess that tax stayed roughly at 25% and there was some kind of arc in income between 1955 and 1995, there should be some kind of result possible as to how much tax he will have paid over 40 years. the maths is beyond me.

 

[mmm4444bot]

I hope that I'm not doing your homework assignment, here. :cool:

£20 per week for 52 weeks is £1,040.

We could get a rough estimate, by assuming your dad earned £1,000 the first year and then got a £1,256 raise each year after that.

1st year: £1,000
2nd year: £2,256
3rd year: £3,512
and so on...
40th year: £49,984

This progression of numbers (terms) is called an arithmetic sequence because adjacent terms differ by a fixed amount.

To add up a specific number of terms in an arithmetic sequence, we average the first and last terms, and then we multiply that average by the number of terms.

The average of the first and last terms is 25492, and there are 40 terms to add up.

25492 × 40 = 1019680

In other words, using all of the assumptions, your dad earned roughly £1,000,000 over 40 years, so he paid about £250,000 in taxes.

 

[mmm4444bot]

Denis showed me what happens, using a different assumption about how the income varied. (Perhaps, he will post it.) His method estimates the tax at about £130,000.

My linear-growth assumption is not very realistic; it likely over-estimates the tax.

Here's yet another assumption. This one yields a tax estimate of £191,000. In other words, the estimates vary substantially, based on the income assumptions.

[FONT=courier new]Years @ Salary
  2      1000
  2      1500
  3      3000
  3      5000
  5     10000
  5     20000
 15     25000
  4     40000
  1     50000
[/FONT][FONT=courier new]-------------
 40    764000[/FONT]

 

[stapel]

can anyone help work out how much tax my dad wd have paid over 40 years working in uk. i dont have exact figures and am happy with an estimate.

he began work in 1955, probably earned 20pounds a week, UK income tax wd have been about 25%

by 1995 he was earning 50 000 pounds pa.

if you guess that tax stayed roughly at 25% and there was some kind of arc in income between 1955 and 1995, there should be some kind of result possible as to how much tax he will have paid over 40 years. the maths is beyond me.

There's waaaaaaay more information needed, as tax rates rarely stay constant for so long a time, and deductions, loopholes, etc, change over one's career.

Please reply with all of the assumptions you're expected to make, all of the rate information for the forty-year period, and all other required information, including clarifications of the "probably's" and the "about's", which of course are too vague to form the bases of mathematical exactness.

When you reply, please include a clear statement of your thoughts and efforts so far, as we'll be assisted in figuring out what you're needing to do by seeing what you've attempted. Thank you!