60% income tax rate

hubba

I think all of us would like to earn over 150k a year but having said that if i was one of them i would be looking at ways to get round this one.. At the end of the day these people will start to wonder if its really worth it they might as well earn 99k.
i totally agree about the car scrapage scheme we bought our mpv for 1500 as we have 4 kids (before my husband got made redundant) lets face it how many of us can afford the £20,000 ish even with the new allowance to buy anew car most of us might consider it if we wanted a two door for about 6 grand these days but that dosent help the majority of us who drive round in the 10 plus year old cars.

lostinrates

vivatifosi wrote: »

Sorry guys, not through PAYE, but through owning their own companies and doing it that way. I would imagine a fair few of those who are on over £150k pa are also the owners of the business.

I think thats what I find frustrating. Its unfortunate that the tax cannot be applied fairly to all. I think higher earners DO need to play there part in sorting it out: a healthy economy surely will be better for future earning/pensions for higher earners too, but that those who are PAYE should pay more than those able to otherwise earn more seems, and has done before this, not cricket.

hermanmunster_3

lostinrates wrote: »

This isnt possible in all careers/employers. If it were available to DH, to have a £99,000 k salary on a restricted hour basis, by heck, I'd love it.:) I'd definitely be hoping he went for such an option.

true - only poss because already do 50+ hrs a week and some of income is self employed.

TomJ

kennyboy66 wrote: »

Something like 13% of adults pay a marginal tax rate of over 70% once benefit clawbacks are included.

Actually I hear quite a lot about this on the blogosphere, typically on libertarian or right leaning blogs arguing for a massive simplification of the tax system (often by abolishing tax credits and raising the personal allowance) to get rid of massive distortions and disincentives to work like this. See, f'rinstance, here.

kennyboy66_2

TomJ wrote: »

Actually I hear quite a lot about this on the blogosphere, typically on libertarian or right leaning blogs arguing for a massive simplification of the tax system (often by abolishing tax credits and raising the personal allowance) to get rid of massive distortions and disincentives to work like this. See, f'rinstance, here.

I was wary of posting a "spectator" link in case anyone thought I normally read it;).

It does have the disadvantage that if you pay no income tax, then you could argue that you have less incentive to see that spending does not get out of control (obviously you still pay VAT, council tax, etc etc.

Graham_Devon

Rochdale_Pioneers wrote: »

Sounds good to me. I weep for all the captains of industry on 6 figure salaries. Will they be sat worried about unemployment? Paying the bills? Having to manage/reduce food budgets? Capping spending on luxuries and days out?

Thats what so many of their employees are doing right now - if my MD isn't sharing the pain then the system is rewarding them and punishing us. Trust me - the government start publicising this move and it will be VERY popular. The mood out there is for payback from the fat cats - if the Tories want to oppose this tax on the rich then more fool them.

How can it possibly be a good thing to have 60% planned out like that. It's a balls up.

It only sounds good to you, because as you have explained, you are completely jealous of their salaries. Everything you said to justify why, was jealousy.

Reaper

thelawnet wrote: »

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.

Well I'm going to deny it.

It might work out at 60% for somebody at the very worst level of income but it maxes out once the personal allowance has been used up. So somebody on £500,000 will be paying less than 60% tax.

Unless I'm misunderstanding all this talk of a 60% tax is flawed.

itsnever2lateisit?

Rochdale_Pioneers wrote: »

Sounds good to me. I weep for all the captains of industry on 6 figure salaries. Will they be sat worried about unemployment? Paying the bills? Having to manage/reduce food budgets? Capping spending on luxuries and days out?

Thats what so many of their employees are doing right now - if my MD isn't sharing the pain then the system is rewarding them and punishing us. Trust me - the government start publicising this move and it will be VERY popular. The mood out there is for payback from the fat cats - if the Tories want to oppose this tax on the rich then more fool them.

Thanks for clarification Rochdale

So you admit that this isn't a revenue raising measure to help plug the gaping hole, but just spite, a la Dennis Healy:rolleyes:

I am sure Darling has left enough loopholes which will mean that the tax take from those earning >£100k might fall.

I cannot understand why they don't just raise the rate of VAT, the only way you can avoid paying that is to steal the goods!

wolvoman

Rochdale_Pioneers wrote: »

Thats what so many of their employees are doing right now - if my MD isn't sharing the pain then the system is rewarding them and punishing us.

So your MD will pay more tax and take some pain for the greater good then. But what pain exactly are you sharing? What extra tax are you contributing towards reducing government debt?

Graham_Devon

wolvoman wrote: »

So your MD will pay more tax and take some pain for the greater good then. But what pain exactly are you sharing? What extra tax are you contributing towards reducing government debt?

You'd be hoping he simply works out what he needs to live, and then makes a voluntary contribution of tax for the rest of the money he earns.

Afterall, it's for the greater good, and only "fair" as he probably has more money than someone cleaning toilets.