Alistair Darling to raise income tax rate for top earners

[Sysman]

guardian.co.uk, Sunday November 23 2008 22.45 GMT

Alistair Darling is set to announce a new higher rate of income tax on top earners, it was reported tonight.

The chancellor was said to be unveiling the plan for a 45% top rate in his pre-budget report tomorrow.

But the new rate, to be levied on those earning more than £150,000 a year, would not be introduced until 2011 - after the next general election.

OK, the intention is clear...

The strategy would mean the proposal would not come in unless it is endorsed by voters when Gordon Brown goes to the country.

A sure sign that this will be highly unpopular and affect more people than is apparent at the moment. Cue some hefty inflation and maybe a dropping of that 150K threshold?

[SantaClaus]

Good luck to Alistair Darling trying to find these alleged high earners!

Oh yes, thats right! They all hold top positions in the public sector

[AtW]

M***************

[Sysman]

Good luck to Alistair Darling trying to find these alleged high earners!

Oh yes, thats right! They all hold top positions in the public sector

LOL! Hadn't thought of that.

[d000hg]

Good luck to Alistair Darling trying to find these alleged high earners!

Oh yes, thats right! They all hold top positions in the public sector

Balls they do. Loads of people in private industry earn that much. And in fact I am sure some people on these forums will be too, or very close... £600/day ends up as >£150K gross if you don't have holidays, though you'd need a bit more to be paying that rate on any dividends. Sure there are a few here on those kind of rates.

[BrilloPad]

Balls they do. Loads of people in private industry earn that much. And in fact I am sure some people on these forums will be too, or very close... £600/day ends up as >£150K gross if you don't have holidays, though you'd need a bit more to be paying that rate on any dividends. Sure there are a few here on those kind of rates.

But there are expenses, income shifting, pensions, etcetc.

[Purple Dalek]

Balls they do. Loads of people in private industry earn that much. And in fact I am sure some people on these forums will be too, or very close... £600/day ends up as >£150K gross if you don't have holidays, though you'd need a bit more to be paying that rate on any dividends. Sure there are a few here on those kind of rates.

His essential premise is correct though. An awful lot of these top earners are in the public sector, so the net effect will be slightly negative. Slightly negative as it will cost more to collect this tax increase, and the people in private industry will make more efforts to mitigate their tax liability. Also, an awful lot of those higher earners in private industry only need one more shove to leave the country.

Remember: don't let the door slap your on the way out...

What is actually really funny in this report is that they intend to also drop VAT to 15%. Well, the machinations to encourage lots of cheap imports is what got us into this mess in the first place.

Blind leading the blind and all that.

[BrilloPad]

His essential premise is correct though. An awful lot of these top earners are in the public sector, so the net effect will be slightly negative. Slightly negative as it will cost more to collect this tax increase, and the people in private industry will make more efforts to mitigate their tax liability. Also, an awful lot of those higher earners in private industry only need one more shove to leave the country.

Remember: don't let the door slap your on the way out...

What is actually really funny in this report is that they intend to also drop VAT to 15%. Well, the machinations to encourage lots of cheap imports is what got us into this mess in the first place.

Blind leading the blind and all that.

Bigger issue was borrowing too much. Spending it on cheap imports not great - but even spending on stuff manufactured in UK would have been bad.

We need Thatcherism/Micawberism

[_V_]

Go to laugh.

During the boom, millions of people in the City were earning shedloads of wonga and they turned a blind eye.

Now, these people are thin on the ground, they wan't to tax "big earners!".

I don't think there's many IT contractors coining in over £150K a year here.

Mind you, it will hit General Practitioners pay packets.

[Purple Dalek]

Bigger issue was borrowing too much. Spending it on cheap imports not great - but even spending on stuff manufactured in UK would have been bad.

We need Thatcherism/Micawberism

That's what I'm saying, borrowing loads of money from the Chinese to buy loads of Chinese imports, was always going to end in tears.

Spending it on stuff manufactured in the UK wouldn't have been as bad as the money would have kept washing around the economy, i.e. it would still be in the UK economy, well, a fair bit would have still gone out to buy raw materials, but it stands to reason, not as massive an amount.