50% tax rate is damaging the economy.

[AtW]

Maybe you could follow Mr. Cameron on Twitter.

I lead, not follow.

HTH

[doodab]

It's pissing off a lot of people who have money and who already contribute a lot - for some of them with NI factored in their effective tax is easily around 70% (due to anomaly of removing personal allowance for earnings over £100k).

I can't remember them saying 40% was big problem but if those people say 50% tax is a problem them then situation should be addressed because it is those people who can and should drive economic recovery.

Their marginal rate of tax is not around 70%, because one has to be earning > £150k to be paying 50% tax and the loss of personal allowance is a distant memory at that point.

One guy reckons he avoided making investments that would have employed 12 people because of it. To employ 12 people for 20 hours a week on minimum wage costs £90k. He runs care homes, so we can guess that the investment required was somewhat more than this, lets say £400k. Are we seriously to believe that he decided not to make this investment because the pay off on his investment was going to be taxed at 42.5% instead of 32.5% for the next few years? Or is it because the higher tax rate meant that he didn't have the money to invest because he needs to pay himself an extra £400k a year in order to maintain his standard of living? Neither of those scenarios seem very plausible to me.

[AtW]

There effective tax is not around 70%

It is, read up on it:



Factor into this NI (employee and employer) and true tax rate is around 70% for those people who are not even in 50% bracket.

Source: BBC News - If we can have a single benefit, why not a single tax?

Taking more than half in direct income taxes from what people earn is taking the piss and as it appears won't contribute that much extra anyway.

[doodab]

It is, read up on it:

I did. The original article itself states that their marginal rate of tax is 58% after NI. That includes employers NI.

BTW, effective rate of tax is different than marginal rate. Marginal rate = rate of tax on additional income. Effective rate = total tax paid / total income.

[AtW]

I did. The original article itself states that their marginal rate of tax is 58% after NI. That includes employers NI.

It's way too much - more than half of earned money taken as direct tax. Not even in communist USSR they did such tulip.

[doodab]

It's way too much - more than half of earned money taken as direct tax. Not even in communist USSR they did such tulip.

I agree it isn't fair but I don't believe it's harming the economy as they say it is.

[AtW]

I agree it isn't fair but I don't believe it's harming the economy as they say it is.

I'll think about it over a pint of Guiness - every little helps the economy!