Re: 45p Tax on high earners
 

Andrew is right that reducing higher rate tax bands can actually increase tax revenues in certain economic circumstances (I seem to have a dim recollection of something called the Laffer Curve but I'm sure someone with a better grasp of economics will correct me!).

My priority for the budget would be to take lower income earners out of tax altogether which would help boost the economy, help the less well off and be a lot simpler than tax credits.

Re: 45p Tax on high earners
 

I know, it just pains me to think about it!:D

Re: 45p Tax on high earners
 

sadly i dont think it will infact the extra tax wil probably pay the benefits of even more imigrants :rolleyes:

Re: 45p Tax on high earners
 

I would have though by removing tax credits in such a way would actually save the Government and therefore us money.

Re: 45p Tax on high earners
 

I take it you wont be encouraged by the Government taking more money from you?


Basic rate: 20% £0-£37,400
Higher rate: 40% Over £37,400

Your tax already doubles then when you reach £37,400. An extra increase of 5% makes the gap even bigger. It does kind of make you not want to better yourself doesn't it?

I think the 40% band should be moved a lot higher than £37,400 if they are going to increase it to 45%.

Re: 45p Tax on high earners
 

Would having multiple levels that are watertight be better based on wht you earn? As it stands someone who earns shedloads with a good accountant will pay very little tax. It is not as though it is propotional to your income is it.

Re: 45p Tax on high earners
 

Its disgraceful. What about single parents?? You can have a two income household with both wage earners earning 25k, and paying the lower percentage tax. A single parent with just one wage to supportthefamily pays double tax with no tax credit support.

Why the hell do we encourage our kids to have a good education, work hard and furthertheir career when theyre to get penalised for it.

I work in sales and remember a good amount of time ago, deliberately stopping doing my job so I wouldnt getpushedinto the highertax bracket (with commission) and being worse off

Why should people work hard to better themselves and earnmore, only to be penalised.

Absolutely atrocious.

Re: 45p Tax on high earners
 

That's after deduction of your personal allowance of £6,475 (if you're under 65) so your gross earnings would be £43,875 before you're in the 40% band.

Re: 45p Tax on high earners
 

Understand all this, but what is Andrew talking about with a £150,000 tax band ? Is this where the new 45% is coming from or over the current (well, 2009/10) 'high earners' rate of over £37,400 ... :confused:

Re: 45p Tax on high earners
 

So you pay 20% on earning from £6,475 to £43,875 and then 40% on earnings over £43,875, is that correct?

Re: 45p Tax on high earners
 

HM Revenue & Customs: Rates and Allowances - Income Tax

There you go from the government itself ... the rates

Income Tax rates and taxable bands 2008-09 2009-10
Starting rate for savings: 10%* £0-£2,320 £0-£2,440
Basic rate: 20% £0-£34,800 £0-£37,400
Higher rate: 40% Over £34,800 Over £37,400

The link gives you all the details.

Re: 45p Tax on high earners
 

quoting andrewb... now were have I haeard that logic before?.. the same old kak Alan Walters the economic advisor to Thatcher was saying in the 80's.. if increase the tax on income of the rich they will all ****** off to the USA and leave us all alone.."the brain drain".... the fear the Tories try to put upon that if these people that have done very nicely out of the present difficulties will decide to jump ship if thier taxes are increased to help provide a more stable ecomomy....does anyone really care if the like of Andrew Lyyod Webber or Richard Bloody Branson ****** off?..the same old Tory attitude that we have to pamper the rich ... keep them happy and everything will be OK.. ;)

Re: 45p Tax on high earners
 

Nope, its definately 40% on anything over the 37K. :(

Brain drain - possibly but in teh worlds climate as it is there isn't many places where you are unlikely to get hit. The potential for tweaks only comes in for those outside the PAYE system. Self employed, business owners etc. then its all about how many things can be set against tax, wages to spouses as directors etc. I personally don't have an issue with playing teh game. teh rules are there and put there by very clever people. If there is a loophole then fair do's, use it to your advantage.

Re: 45p Tax on high earners
 

You're quite right, there are many legal ways of avoiding the taxes that most other people have to pay, who don't have the resources to find those loopholes.;)

New whistleblower claims over £1bn Barclays tax deals | Business | guardian.co.uk

Re: 45p Tax on high earners
 

Could not agree more!

It's economics not 'Alan Walter'. If you want to take your line, and punish the rich for creating wealth, do so. Your policy is to make the poor poorer just as long as we punish the rich.