60% income tax rate

thelawnet

Back to the 70s for Labour. Expect dead bodies in the streets soon.

(60% tax band is from £100k-£113k, and is much more significant than the 50% tax band over £150k. It's the latest in a long line of Labour stealth taxes.)

Edit: Explained below, this is the removal of the personal allowance for incomes over £100k, which is the same as a 60% tax band.

1984ReturnsForReal_2

What are you on about?

Thrugelmir

thelawnet wrote: »

Back to the 70s for Labour. Expect dead bodies in the streets soon.

(60% tax band is from £100k-£113k, and is much more significant than the 50% tax band over £150k. It's the latest in a long line of Labour stealth taxes.)

Labour decided it was the best way of tackling executive pensions....... particularly those of early retired bankers!

mrposhman

thelawnet wrote: »

Back to the 70s for Labour. Expect dead bodies in the streets soon.

(60% tax band is from £100k-£113k, and is much more significant than the 50% tax band over £150k. It's the latest in a long line of Labour stealth taxes.)

Your 60% is crazy, where do you get that from?

Until I see a more coherent statement I will assume that you are talking about the removal of the personal allowance??

Cleaver

thelawnet wrote: »

Back to the 70s for Labour. Expect dead bodies in the streets soon.

I live in Salford where there have been dead bodies in the streets for years. Nothing to do with a tax rate that doesn't exist though.

Thrugelmir

mrposhman wrote: »

Your 60% is crazy, where do you get that from?

Until I see a more coherent statement I will assume that you are talking about the removal of the personal allowance??

I would assume yes. As in the November budget the changes would in effect have created a 50% rate of tax for those earning between £100k and £150k. Which was higher than the proposed 45% rate of tax for those earning over £150k. I assume that todays changes impact this even further.

Mr_Mumble

Thanks thelawnet, I hadn't noticed the government had scrapped the second band effective marginal income tax rate of 60% and were sticking it even more to those earning just over £100K.

thelawnet

mrposhman wrote: »

Your 60% is crazy, where do you get that from?

Until I see a more coherent statement I will assume that you are talking about the removal of the personal allowance??

Yes I am. My statement is not crazy. The removal of the personal allowance for incomes over £100k (the personal allowance tapers down at £1 for every £2 earned over £100k) is EXACTLY the same as creating a 60% tax band. Because not only are incomes above £100k taxed at 40%, there is also a tax in moving income from 0% (personal allowance) to 40% band (higher rate band) at a rate of 1 in 2. 1/2 * 40% + 40% = 60%.

It's just yet another Labour stealth tax.

It's a 60% band, plain and simple. It should be first item on the news, not the 50% band.

They could have raised the same money more honestly by taxing 45% over £100k, and then 50% above £150k.

Instead they're creating complexity. Why? To con the economic illiterates who report on the Budget.

BBC News' headline is "Alistair Darling says the UK will have to borrow a record £175bn this year in a Budget which also introduces a new 50p tax rate."

No mention of the personal allowance change, which will affect more people than the 50% rate. Had he introduced the 45% tax band, as previously announced, that would be in the headlines.

tight_as_a_nats_bottom

can someone pls explain?

oops - they have!

Walletwatch

thelawnet wrote: »

Back to the 70s for Labour. Expect dead bodies in the streets soon.

(60% tax band is from £100k-£113k, and is much more significant than the 50% tax band over £150k. It's the latest in a long line of Labour stealth taxes.)

You would be much more successful at initiating some form of discussion or debate if you were to get your point across in a better fashion. I have no idea what you are on about.

thelawnet

Cleaver wrote: »

I live in Salford where there have been dead bodies in the streets for years. Nothing to do with a tax rate that doesn't exist though.

It certainly does.

Here are approximate numbers:

Personal allowance: £6,000
Basic rate allowance: £35,000
Basic rate of tax 20%
Higher rate of tax 40%

And some figures.

Example 1:
Earned Income £100,000
Personal allowance £6,000
Income taxed at 20% - £35,000
Income taxed at 40% = £100,000-£35,000-£6,000 = £59,000
Total income tax = £35,000*.2 + £59,000*.4 = £30,600

Example 2:
Earned Income £112,000
Personal allowance £0 (budget report page 106 5.88, "The personal allowance will be reduced at a rate of £1 for every £2 over £100,000 until completely withdrawn")
Income taxed at 20% - £35,000
Income taxed at 40% = £112,000-£35,000 = £77,000
Total income tax = £35,000*.2 + £77,000*.4 = £37,800

So example 2 earns £12,000 more than example 1, and pays £7,200 more tax.

£7200/£12000 = 60%.

60% tax rate - undeniable fact.