50p - top rate of tax: keep or get rid?

[Pavilionaire]

I don't dispute what you are saying Bold Seagull but my "f***ed up" comment is purely in terms of tax policy. When an employer tries to better the lot of his employee and the government ends up with 3/4 of the money that's plainly wrong, and yet it's the reality now.

Moreover, the people with two kids on £40K could probably do with the extra £3K they would otherwise get in a fair system with a £5K gross pay rise to cover the inevitable childcare costs. One child in for 2 days a week is the best part of £4,500 p.a.

It's not rocket science. The government could double the tax-free childcare voucher incentive. from £250-off per month to £500 per month. That way, with salary sacrifice, everybody wins.

 

[Bold Seagull]

I don't dispute what you are saying Bold Seagull but my "f***ed up" comment is purely in terms of tax policy. When an employer tries to better the lot of his employee and the government ends up with 3/4 of the money that's plainly wrong, and yet it's the reality now.

Moreover, the people with two kids on £40K could probably do with the extra £3K they would otherwise get in a fair system with a £5K gross pay rise to cover the inevitable childcare costs. One child in for 2 days a week is the best part of £4,500 p.a.

It's not rocket science. The government could double the tax-free childcare voucher incentive. from £250-off per month to £500 per month. That way, with salary sacrifice, everybody wins.

Well, don't get me wrong either, I'm not suggesting the policy as it stands is right, but frankly it appears that this deficit is being cleared by those who are less well off, and well below having to worry about higher rates of tax. As a country (and world for that matter) we've been f***ed over by the super rich, and we are getting f***ed over again to put it right. Frankly at the moment, the higher earners are the least deserving of attention in regard to who is currently losing out to the current policy cuts.

 

[djm21]

Always ensure the wealthy pay their way. So keep it, but close the loopholes as others have said.

 

[king Wombat]

How many people have actually left the country because they're now paying 50p tax rate?? Sounds like a crock of shit to me that there's a mass exodus because of it.

 

[cloud]

The costs to his employer of paying that extra £5,000 - including Employer's Class 1 NI - would be £5,690. This means the employee gets less than 25% of the benefit, while the government is better off to the tune of £4,290. Now THAT is f***ed up.

Actually the cost to the employer includes the tax they won't pay on it, so if they're a large company it will only cost them £36,020 to employ someone earning £45,000. So they're alright Jack as well.

 

[Bold Seagull]

How many people have actually left the country because they're now paying 50p tax rate?? Sounds like a crock of shit to me that there's a mass exodus because of it.

Exactly, so called 'wealth creators' come here because we are a bloody good country to have a business in, not because we have low taxes. If they don't like it they can set their business up in Spain or Greece or somewhere and see how they get on with the lower taxes.

 

[Westdene Seagull]

Well, don't get me wrong either, I'm not suggesting the policy as it stands is right, but frankly it appears that this deficit is being cleared by those who are less well off, and well below having to worry about higher rates of tax. As a country (and world for that matter) we've been f***ed over by the super rich, and we are getting f***ed over again to put it right. Frankly at the moment, the higher earners are the least deserving of attention in regard to who is currently losing out to the current policy cuts.

I hate to point it out but ALL employees are losing out thanks to the current situation regardless of their tax bracket. In the last 3 years both myself and my partner have lost our jobs thanks to the recession - we were both 40% tax rate payers. Despite years of paying tax we got nearly no assistance from the government to help us through the difficult patch. Hard though it may be to believe, our bank were far more helpful and understanding than any of the agencies we approached.

Combine that with years of pay cuts or, if lucky, no pay rises and ALL tax bands have suffered. this snobbery against the upper tax bands is nothing but jealousy. As you earn more you raise your level of living - it isn't as easy as saying "downgrade" it when income drops - you've made commitments by that point.

What needs to happen isn't the vote catching "tax the rich" it's a fundamental overhaul of the tax system full stop along with the benefits system. Let's start with removing benefits from those that have never worked and never intend to work.

 

[folkestonesgull]

the people I know who earn enough to pay the 50% tax don't mind paying it...it is afterall a 10% increase on earnings above £150k on what has been the status quo for a long time. It seems to me that the people who winge about it the most are doing so from an ideological point of view only...
As said above loopholes need to be closed up. It would be interesting to know how much tax as a total % of income footballers actually pay...As so many people have said above the system needs to be fair..loopholes as far as possible need to be closed up. There is no point having a "fair" taxation system that is not implemented and monitored effectively - as always it is the middle income groups/low level 40% tax payers who are hit the most (as with child benefit).

 

[seagullsovergrimsby]

Perhaps the ConDems should look at UKIP's income tax proposals which follows the principles adopted by several other countries around the world. Have a flat rate income tax which includes the NI contributions element. Start off with an annual tax allowance of £10k which is then uprated annually , after the limit has been reached flat rate tax is deducted at 33% regardless of upper income. Closing all the loopholes including salary that can be taken as share options or capital gains or transferred abroad to a company set up in a tax haven or offset against company losses etc etc will be beneficial to hmrc.

 

[seagullsovergrimsby]

Let's start with removing benefits from those that have never worked and never intend to work.

I would give them a last ditch option before benefits are stopped , do 30 hours a week of unpaid voluntary work such as for charities or in the local community. Give them 30 days every 12 months to use as "paid benefit holidays" or "sickies" , if they breach the limit then their benefits are taken away.

 

[catfish]

Until the Philip Greens of this country are made to pay their fair share of taxes we should keep the 50p rate. With so many people suffering financial hardship it hardly sends the right message if we cut tax for high earners.

 

[Bold Seagull]

I hate to point it out but ALL employees are losing out thanks to the current situation regardless of their tax bracket. In the last 3 years both myself and my partner have lost our jobs thanks to the recession - we were both 40% tax rate payers. Despite years of paying tax we got nearly no assistance from the government to help us through the difficult patch. Hard though it may be to believe, our bank were far more helpful and understanding than any of the agencies we approached.

Combine that with years of pay cuts or, if lucky, no pay rises and ALL tax bands have suffered. this snobbery against the upper tax bands is nothing but jealousy. As you earn more you raise your level of living - it isn't as easy as saying "downgrade" it when income drops - you've made commitments by that point.

What needs to happen isn't the vote catching "tax the rich" it's a fundamental overhaul of the tax system full stop along with the benefits system. Let's start with removing benefits from those that have never worked and never intend to work.

Have you made the conclusion I'm not in the upper tax band then?

 

[drew]

If the 50p band costs more to administer then what is the point.

Who says it costs more to administer? There are no figures as to how much it has raised yet so what is the point of your comment?

Intrestingly the article states what was hoped to be collected by the extra 10p over £150k but doesn't tell us what was really collected.

Personally I believe higher tax is a disinsentive to work - once you hit £150k why would you attempt to earn more if half of it has to go to HMRC ? 40% is more than adequate. It would be better to put more effort into preventing tax evasion, benefit abuse, making tax calculation and collection simpler and getting services to the tax payer in a more efficient way.

What a load of rubbish. If you earn £150k and then earn an additional £100k you end up with an extra £50k in your pocket give or take a little NI.

If you read the article, it quite clearly says they won't know how much has been raised until all the self assessment forms have been returned/completed at the end of Jan 12.

The focus needs to be on growth, and a 50% top tax rate is a "barrier to entry" for some mobile entrepreneurs. Also, with all the red tape surrounding business, many top earners will think "is it worth the hassle?" when considering starting up businesses. This comment is quite extraordinary. How many people thinking of starting up a new business that you know of have decided not to because of an extra 10% tax but only when they earn over £150k. I would suggest that the vast majority of small business do not pay anywhere near that amount. Afterall, we are only talking about the top 1% of earners.

Don't forget National Insurance either - those that derive their £150K plus from sole trading will find the government actually get 52% and the trader 48% on the excess profit over the £150K mark. Whilst most people in business at this level will be incorporated as limited company the fact is the government are taking at least half and sometimes more, and that's a real turn-off for job creation.

As KW says below, where exactly is the evidence that these jobs have moved abroad or that companies can't recruit from abroad due to the high tax rate. It's laughable. We are still recovering from a recession induced by the greed of the wealthy and they now seem to be positioning themselves to benefit earlier than everyone else. You only have to look at the increases in top salaries over the last 10 years, the payment of bonuses for short term profit. The letter is described as being from 20 leading economists. The implication being that they are the best. How many other leading economists don't actually agree or wouldn't sign up to the letter in the first place.

How many people have actually left the country because they're now paying 50p tax rate?? Sounds like a crock of shit to me that there's a mass exodus because of it.

As for stimulating the economy that will only happen when demand is increased, not when tax breaks are given to the top 1% of earners. The banks (yes them again) should be lending more, whether that is to business or mortgages to individuals. At the moment, we've bailed them out and they are still trying to screw us over.

When ever this is discussed there are those that go on about the politics of envy but never mention the politics of greed!!!

 

[drew]

If the 50p band costs more to administer then what is the point.

Who says it costs more to administer? There are no figures as to how much it has raised yet so what is the point of your comment?

Intrestingly the article states what was hoped to be collected by the extra 10p over £150k but doesn't tell us what was really collected.

Personally I believe higher tax is a disinsentive to work - once you hit £150k why would you attempt to earn more if half of it has to go to HMRC ? 40% is more than adequate. It would be better to put more effort into preventing tax evasion, benefit abuse, making tax calculation and collection simpler and getting services to the tax payer in a more efficient way.

What a load of rubbish. If you earn £150k and then earn an additional £100k you end up with an extra £50k in your pocket give or take a little NI.

If you read the article, it quite clearly says they won't know how much has been raised until all the self assessment forms have been returned/completed at the end of Jan 12.

The focus needs to be on growth, and a 50% top tax rate is a "barrier to entry" for some mobile entrepreneurs. Also, with all the red tape surrounding business, many top earners will think "is it worth the hassle?" when considering starting up businesses. This comment is quite extraordinary. How many people thinking of starting up a new business that you know of have decided not to because of an extra 10% tax but only when they earn over £150k. I would suggest that the vast majority of small business do not pay anywhere near that amount. Afterall, we are only talking about the top 1% of earners.

Don't forget National Insurance either - those that derive their £150K plus from sole trading will find the government actually get 52% and the trader 48% on the excess profit over the £150K mark. Whilst most people in business at this level will be incorporated as limited company the fact is the government are taking at least half and sometimes more, and that's a real turn-off for job creation.

As KW says below, where exactly is the evidence that these jobs have moved abroad or that companies can't recruit from abroad due to the high tax rate. It's laughable. We are still recovering from a recession induced by the greed of the wealthy and they now seem to be positioning themselves to benefit earlier than everyone else. You only have to look at the increases in top salaries over the last 10 years, the payment of bonuses for short term profit. The letter is described as being from 20 leading economists. The implication being that they are the best. How many other leading economists don't actually agree or wouldn't sign up to the letter in the first place.

How many people have actually left the country because they're now paying 50p tax rate?? Sounds like a crock of shit to me that there's a mass exodus because of it.

As for stimulating the economy that will only happen when demand is increased, not when tax breaks are given to the top 1% of earners. The banks (yes them again) should be lending more, whether that is to business or mortgages to individuals. At the moment, we've bailed them out and they are still trying to screw us over.

When ever this is discussed there are those that go on about the politics of envy but never mention the politics of greed!!!

 

[Westdene Seagull]

I would give them a last ditch option before benefits are stopped , do 30 hours a week of unpaid voluntary work such as for charities or in the local community. Give them 30 days every 12 months to use as "paid benefit holidays" or "sickies" , if they breach the limit then their benefits are taken away.

Agree - that would be fair. Now it just needs the government with enough guts to do it.

 

[Conkers]

Where's the option "whatever will generate HMRC the most income in the medium to long term"?

 

[looney]

Agree - that would be fair. Now it just needs the government with enough guts to do it.

It would mean leaving the EU first.

A few Points.

The argument for a flat ta is not about tax avoidance. Contrary to what LB says its about cutting beurocracy as all those accountants are being paid by the government to work out peoples taxes at HMRC as well as the ones paid to dodge taxes.

The Optimal taxation level to maximise revenue is called the Laffer Curve, if the level of tax is creating a disinsentive to work/pay it then the tax level is to high.

Its over 50% tax rate including NI. Then you have everything else taxed, the government is robbing the wealthy to fund its f***ed up social policies.

 

[ewe2]

Electric cars ,smoking and drinking condemed.........50p, lets talk 70p !!!!!!

 

[beorhthelm]

Morally it should be kept. Practically, there's no point doing so – these people will always find ways to dodge it.

"morally"? you mean politically. there is no moral reason to say someone earning more than another should pay a higher proportion of there earnings. they are already paying more.

this was debated on TV the other day. it was quite clear, more or less admitted by the supporter of the tax, that it is a punitive tax imposed for policital reasons. the gerneral debate is misguided by recent event, people ignore that for every "banker" there is a entrepreneur, industrialist, company owener, salesman or just plain hard workers who get paid more many. just because its "right" to tax a trader more for earning more, why should we tax a company owner more?

 

[beorhthelm]

How many people have actually left the country because they're now paying 50p tax rate?? Sounds like a crock of shit to me that there's a mass exodus because of it.

so you want to play chicken with this group, which as pointed out include the 1% of people that pay over a quarter of all tax? the problem is those in this earning bracket are the most able to relocate (at least for tax) or otherwise avoid taxes.

Exactly, so called 'wealth creators' come here because we are a bloody good country to have a business in, not because we have low taxes. If they don't like it they can set their business up in Spain or Greece or somewhere and see how they get on with the lower taxes.

i read recently (i dont recall the exact source, one of the broadsheets) that the 3k non-doms are calculated to directly or indirectly employ ~30k people in this country. house keepers, valets, plumbers, mechanics, car salesmen, waitresses, chefs, etc. then their business interests that might use local martketing, PR, design, web development, consultants, accountants that are London/UK based. many years ago, companies, businessman and wealth creators *did* leave this country because taxes were too high, they went to the Med, eastern Europe, the Far East (obviously lower wages a factor too).

the people I know who earn enough to pay the 50% tax don't mind paying it...it is afterall a 10% increase on earnings above £150k on what has been the status quo for a long time. It seems to me that the people who winge about it the most are doing so from an ideological point of view only...

maybe to a degree. but someone i know who is in the 50% braket is royally f***ed off on prinicple that after NI he's taxed more than half some of his earnings. to the point were he is questioning whether to expand his business (which would see additional jobs) as he'll see only 40p in the pound for the extra investment. thats the reality behind the politics.