60% income tax rate

lostinrates

Sir_Humphrey wrote: »

What really angers me about these whinging bankers is that some of the tax rise was made necessary due to the bank bailouts.

They get billions from the taxpayer to save their jobs, yet moan about paying a bit more tax.

I do actually think that all bankers are that sociopathic, but if those that are decide to leave, then they can sod off to be frank.

Its not only bankers that earn over 100k, though.

(althouh I agree, the better paid have to take their part in paying this back)

Intoodeep

mitchaa wrote: »

I have a close friend who earns around £400k pa (Championship footballer) I was chatting to him about this last night as i seen a comment on his facebook page digging in at A.D after his budget announcement.

I was winding him up that he was going to have an extra tax burden bill of £25k next year (£2k+ pm) he was not amused.

I wasn't aware though and i dont think he was either of the removal of his personal allowance so i guess that will be even more. 20% of £6475 = £1300.

I'll mail him and tell him the further good news if the maths is true Anyone confirm?

I cant see many people leaving the country to be honest. Why would they leave when they are wealthy enough to pay it and have family and friends here. A bit extreme to move country away from F&F just to save a few thousand in taxes.

Footballers get PAID, people in the real world EARN.

Thrugelmir

On reflection this tax change was a great piece of spin. All over the newspapers and the press today. In terms of tax take though it pales into insignificance with the money that needs to be raised in the future. Rather than address the issues that the Country has. The matter has been postponed a whole year.

Brown fiddles while London burns seems an apt description.

What has not been spelt out is how much the average earner is going to have to contribute starting in 2010 after the election. Politicians need to come out into the real world!

thelawnet

kennyboy66 wrote: »

You seem remarkably excited by this, but at least you explained this nice and clearly. You are also right about Brown doing it this way purely for political purposes.

However it is not a "tax rate" or "tax band" in the normal sense.

It is a marginal tax rate between 2 earnings points - oddities like which exist all over the tax and benefit system.

Actually this one's different. You actually pay 60% TAX. Not 31% tax and then lose benefits as well.

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

That's not strictly tax. They pay 20% income tax, 11% NI = 31% tax.

Then they lose their benefits at a rate of 39%. This adds up to 70%, but only 31% is tax, the rest is lost benefits.

This is not the same as taxing somebody at 60% on their earned income.

Not everybody earning say £6k will be eligible for tax credits (childless under 25s come to mind), and so there's no guarantee that anyone will lose more than 31%. But everybody earning over £100k will be taxed at 60%. Tax and benefits are different things, 'marginal tax rates' that don't purely involve tax are misleading.

Surprise, surprise, you don't hear much about this, despite the fact that low paid marginal tax rates affect literally millions more people.

If Labour had been truly radical, they could have reformed this over the last 12 years. The opportunity has been sadly wasted.

I've heard plenty. The basic problem is that the Labour party has extended the welfare state to most of the population. So nearly everybody's filling in forms, applying for benefits, etc.

There are a few measures designed to discourage the same thing I've mentioned (people declining to work because they end up hardly any better off) - the 16 hour threshold for tax credits, and the thirty hour element are two - basically if you work a certain number of hours you get much more benefits.

But there are ridiculous numbers of people working exactly 16 hours a week because they lose benefits at 39% above that level (adding up to 70% tax). I'm sure if the low paid have worked this out, the rich will do the same, and people will be queueing up to avoid the ridiculous 60% income tax rate.

silvercar

These company owners could take more money out of their companies this year, in order to avoid the higher tax next year.

so the government could gain in higher tax receipts this year.

baby_boomer

The problem is that banking profits added 1% to our average annual growth.

If you take that away - as we can agree on from both sides of the political spectrum - then Darling's growth forecasts are fanciful.

ukcarper

what about the 11% less tax above national insurance upper limit so someone earning between 35k & 45k is paying more than someone earning 45K +

mewbie_2

Scrap NI and put it on tax so we can see what's what.

Why should people who earn more pay a higher proportion of their income in tax? I don't get it. They are already paying more, simply by earning more and paying more effing tax.

Fairer system would be a much higher starting band as suggested by the Liberals <spit>. And then one tax rate - simple - no matter what you earn. Mr. 100k still pays more tax than Mr. 50k, but at least it's not blatantly unfair.

JasonLVC

kennyboy66 wrote: »

Complete rubbish.

Players are on PAYE just like everyone else for most of the payments they receive from clubs.

Some foreign players set up offshore companies to handles sponsorship income or "image rights".
Dennis Bergkamp won a case against IR a few years ago.

Almost all footballers worth their salt have companies to manage their image rights and sponsorships (that's a given), not just the foreign players and they also get paid for each goal they score (but again, paid via a Ltd Co., not directly so they can draw a dividend from the company rather than a salary) and the transfer fees have also been siubject to various tax tribunals in the past as well. Some footballers are not actually employed directly by the club but are employed via a ltd company again, so all income is paid as dividend rather than salary - dividends are not subject to the rules as a normal salary.

Okay - whilst I may have slightly excagerated about them not paying much more tax than an average Joe, the reality is they do not pay nearly anything near what you think they do.

lostinrates

mewbie wrote: »

Why .

Because they are all bankers,and it was entirely their fault.:D