Reply to: 50% tax rate is damaging the economy.

[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!

[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 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 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]

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'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]

Maybe you could follow Mr. Cameron on Twitter.

I lead, not follow.

HTH

[Waldorf]

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.

+ 1

[d000hg]

All taxpayers should be listened to

Maybe you could follow Mr. Cameron on Twitter.

[AtW]

I'm not disputing that, or suggesting the tax is "fair" (I've already said it isn't), but the issue at hand is whether the 50p tax rate is harming the economic recovery, and I don't think it is harming the recovery in fact it might even be helping it along.

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.

[doodab]

We are talking about income tax here anyway, quote: "The group that pays the 50p tax rate pays 28% of all income tax"

I'm not disputing that, or suggesting the tax is "fair" (I've already said it isn't), but the issue at hand is whether the 50p tax rate is harming the economic recovery, and I don't think it is harming the recovery in fact it might even be helping it along.

[AtW]

I said across all taxes which of course includes consumption taxes which hit the poor far harder. % of income paid as tax by the poorest 10% is about 46%.

Well, naturally such %-tage as proportion of income would be higher for poor people and pensioners, that's by definition because of fixed cost of living, what do you propose to fix that - print money to make everybody "rich"?

We are talking about income tax here anyway, quote: "The group that pays the 50p tax rate pays 28% of all income tax" -

Source: George Osborne 'must abandon folly of 50p tax' - Telegraph

[doodab]

Now show me the link to prove that 10% lowest taxpayers contribute 46% of income tax because I call BS on this one.

I said across all taxes which of course includes consumption taxes which hit the poor far harder. % of income paid as tax by the poorest 10% is about 46%.

http://clients.squareeye.net/uploads...cuts%20WEB.pdf

Now show me the link that says these 500 odd people pay 30% of the income tax in the UK

[AtW]

Across all taxes, the top 10% of earners pay ~34% and the lowest 10% around 46%. Who should we listen to?

All taxpayers should be listened to and offered reduction in taxes through more effective usage of money - Govt should learn how to provide more for less.

Now show me the link to prove that 10% lowest taxpayers contribute 46% of income tax because I call BS on this one.

[doodab]

I think all income taxes should be reduced, especially on lower end of earnings to make sure working pays better than being on benefits however people who pay 30% of total income tax in UK have got the right to have an opinion about it and their opinion should be listened to because they contribute so much tax.

Across all taxes, the top 10% of earners pay ~34% and the lowest 10% around 46%. Who should we listen to? Should we still listen to them if their opinion is contradicted by observable facts?

Everyone is entitled to an opinion, but if they choose to spout bollocks then everyone else is entitled to be of the opinion they are spouting bollocks.