In absolute terms yes, but proportionally it favours the lower paid.
Literally true, but is proportionality actually a relevant concept, given that virtually everything we have to pay for (whether we are very low-paid or very high-paid) is an absolute sum of money -be it rent, mortgage, Council Tax, fuel bills, food, nappies clothes or whatever?
If a certain increase in tax threshold (personal allowance) enabled a low-paid person (paying tax only at 20%) to buy a certain number of nappies or fish fingers, or enabled them to pay £X towards rent, fuel bill or whatever, then the higher-paid person (paying some tax at 40%) would be able to buy exactly twice as many of those goods, or make double the contribution to some bills, as a result of the the same increase in tax threshold (even though the benefit to him/her had been 'proportionately less').
It's complicated to avoid that
Indeed. Everything about this topic is incredibly 'complicated' almost certainly to the point that any sort of 'deal' solution is effectively impossible.
However, before one can even start trying to design a 'better' (even if not 'ideal') tax etc. system, one needs to decide, strategically, what one is trying/hoping to achieve, and I seriously doubt that that question is often given adequate serious though.
One thing one rarely sees being discussed is that, even if we only had one, 'standard' rate of income tax (i.e. no 'higher rates'), a person with a very high income would pay an awful lot more tax than than would a person with a very low income. One of the arguments for higher (maybe even 'punitive'!) tax rates for those with high incomes (a concept beloved of some political ideologies) is a belief that high-paid people have much more "discretionary income" (often incorrectly termed "disposable income") than low-paid people.
However, I have to say that their premise does not correspond with what I very commonly see in the real world. In the social/family circles I move in, it seems very common that when people work their way up the ladder from relatively low-paid to ultimately very high-paid positions, they (almost masochistically !) seem hell-bent on always keeping themselves 'financially stretched', particularly as regards property purchase - hence, when increases over time in their income means that they can 'fairly easily' service their mortgage, they take that as an indicator that the time has come to move up the property market and buy a new home whose mortgage they will initially struggle to service
I am therefore far from convinced that people with very high incomes
do necessary have much more "discretionary income" than do people with much lower incomes. However, if that is not a valid justification for higher (maybe very high) tax rates, I'm not quite sure what is!
