Reply to: a tax too far?

[expat]

You do know that is unlikely to be within the next 10 years...if ever?

I doubt if taxes will ever come back down so far. Cameron's public-school bullies will be scared to do without the income, and after a couple of terms of them Labour will get back in; and tax rates of less than 50% will be consigned to history along with the other excesses of the Thatcher years. Major kept up with them so as not to be vilified by his own party, and Labout kept up with them in order to be electable "New" Labour. In ten years' time all that will be forgotten.

[expat]

50% tax is 100% of the money you receive. E.g. 50% of 100K is 50K, so the tax man gets as much of the (notional) 100K as you do.

What I mean is, some people talk as if 50% tax from 150k means that a person earning 150k will pay 50% of all his income. In reality, someone earning 150k will not pay 50% tax on any of his income.

Someone earning 160k will pay 50% tax on only 10k of his income: i.e. only 10k of his income suffers a tax increase, from 4k tax to 5k tax, a rise of 1k; or 0.625% of his income.

Someone earning 200k will pay 50% tax on 50k of his income: i.e. only 50k of his income suffers a tax increase, from 20k tax to 25k tax, a rise of 5k; or 2.5% of his income.

You have to go quite a bit above 150k income before the tax increase becomes what you would call significant, however much some people try to imply that a person earning 150k will pay 75k tax: that's rubbish.

[Menelaus]

What do we think of flat-tax economies?

[Not So Wise]

I'm just going to leave more dosh in the company to keep under the threshold until tax rates return to normal. I assume lots of other people will do the same.

You do know that is unlikely to be within the next 10 years...if ever?

Given that less than 2 per cent of the pop earn more than 100k and less than 1 per cent ear more than 150 k I can hardly sympathise for the very well off having to cough up a few more bob in taxes -

And that type of thinking is exactly why the top earners were targeted, they are a minority of the voting population and majority will think exactly like you do.

And when this tax fails to gather enough money and its next band down getting the hike the bands below them (a majority in comparison) will think the same and so on until everyone's tax's have gone up

It's an old tactic to divide the population to play them off each other and is one of the major reasons gov's don't like a single flat tax rate

[TimberWolf]

50% tax is 100% of the money you receive. E.g. 50% of 100K is 50K, so the tax man gets as much of the (notional) 100K as you do.

[expat]

Given that less than 2 per cent of the pop earn more than 100k and less than 1 per cent ear more than 150 k I can hardly sympathise for the very well off having to cough up a few more bob in taxes - and they will probably find ways round this anyway - which is good news for tax consultants and the like.

Persoanlly Im surprised they didnt go for a more substantial 70 per cent target - tax em till their Pips squeak !

And I do wish people would give up with the rubbish about paying 50%: you know, 50% of 150k is 75k, wow! 75k taxes......

[Drewster]

I would like to see a list of the manifesto pledges that these guys have actually kept

1)
2)
3)
4)
....
999)

HTH

[AlfredJPruffock]

Given that less than 2 per cent of the pop earn more than 100k and less than 1 per cent ear more than 150 k I can hardly sympathise for the very well off having to cough up a few more bob in taxes - and they will probably find ways round this anyway - which is good news for tax consultants and the like.

Persoanlly Im surprised they didnt go for a more substantial 70 per cent target - tax em till their Pips squeak !

[expat]

I'm just going to leave more dosh in the company to keep under the threshold until tax rates return to normal. I assume lots of other people will do the same.

If some future clarification of IR35 catches you, that will become deemed payment on which you have failed to pay tax and NICs. These will then fall due, with interest, on that deemed payment, but the money itself will still be in your company and will be taxed again on the way out.

You don't think they would do that? Remember the Vehicle Excise Duty increases for old cars: they government declared that they were not retrospective, because "it has been obvious for the last ten years which way we were heading" - i.e. you are obliged to guess what the govt really wants.

It seems all too similar to me to decide that those who escaped IR35, even legitimately in terms of the rules at the time, were failing to take account of the government's real intentions. This reminds me of the language of HMRC's anti-avoidance unit, which targets activities that cause a difference between the amount of tax received and the amount of tax they expect to receive.

[EternalOptimist]

I would like to see a list of the manifesto pledges that these guys have actually kept

[DodgyAgent]

This tax increase is not big enough to make lots of people leave however it's big enough to restructure earnings and avoid it.

I beg to differ. Although 10% may not sound like much, aggregate it with the tax on pensions and the removal of personal allowances make it substantial enough to make poeple who can try and do something about it. Whether that means leaving the country, I doubt it.

The govt thinks that it will raise 9 billion, which it wont. 2 billion is optimistic.

What matters is that it exposes as a myth that the government wants to encourage entrepreneurs, or encourage consumer spending to get the economy back on its feet. The whole gesture is entirely political looking to capture votes from those who have been made to believe that the whole crisis is the fault of rich bankers.

[ThomasSoerensen]

I'm just going to leave more dosh in the company to keep under the threshold until tax rates return to normal. I assume lots of other people will do the same.

Await the day your company becomes natinalised. Have a nice day.

[NotAllThere]

...I'm often bemused by the fact that I, a socialist (with a small "s" ) hippy, seem to have a much stronger sense of duty towards my country than all those right-wing gits who prate on about loving the nation, yet cut and run the moment they see a financial advantage for themselves by doing so...

As opposed to the left-wing gits who do the same thing. And the right-wing gits who consider anyone who left the country for better things to be a traitor - which is the BNP stance.

I left the UK 7 years ago because I had the opportunity to live and work in a different culture. I've no regrets and no intention to return. It's standard of living that's important, not tax rate. Though I also have a relatively low tax burden - around 20% of my total income goes in tax; my marginal rate is 33%.

[Lockhouse]

I'm just going to leave more dosh in the company to keep under the threshold until tax rates return to normal. I assume lots of other people will do the same.

[PM-Junkie]

I am an Englishman, and therefore a Briton. This country is my home, and it behoves me to contribute towards making it a better place not just for myself, but for all my fellow countrymen. If the Government of the day is making a pig's ear of things, well, they always have done; sooner or later it all evens out.

I'm often bemused by the fact that I, a socialist (with a small "s" ) hippy, seem to have a much stronger sense of duty towards my country than all those right-wing gits who prate on about loving the nation, yet cut and run the moment they see a financial advantage for themselves by doing so.

Worthless hypocrites the lot of them

"a self-righteous, pompous cretin who thinks that everyone who doesn't agree with me is a "right-wing git", even though I know precisely zip about their life or their circumstances...and who is probably getting all hot an bothered at being called names even though I am about to do the same myself."