'Should high earners pay 50% tax?' poll discussion

jimpix12

Mum_of_3 wrote: »

This means that anyone with their own company taking enough to take them over the supposed 50% tax band will only pay 32.5% anyway. How is that paying more tax??

M_o_3

Do you have any figures as to how many people on >£150k a year run their own company then? See what you're saying though.

brizey47

Some people forget that the tiny minority earning these sums still get the same allowance as the rest of us for income below £150,000 so £50% for any amount above is fine with me, maybe it should have been 55%.

Sorry Martin you're probably one of that tiny minority

tuggy12

Mum_of_3 wrote: »

anyone I know who owns a limited company pays themselves a minimum amount for NI reasons & gets the majority of their money from the company via dividends which are taxed at a far lower rate then PAYE (32.5% over £37,400 compared to 40%)!

M_o_3

Not true !!

Dividends are paid net of 10% tax, so the marginal rate of 32.5% tax effectively increases the total tax to 40% of the gross dividend amount.

I'm_With_Stupid

spunko2010 wrote: »

Britain is the third/fourth most expensive country in the world to live in:

http://news.bbc.co.uk/1/hi/talking_point/1136184.stm

That's working on, presumably, an average wage. There are only six countries in the OECD with a higher tax rate than the UK – places like Denmark, Sweden and Finland. Go figure.

It's also working on figures from 2001. Besides, it wasn't the cost of living that I was talking about, it was the cost of running a business. You said we have one of the highest rates of corporation tax. That simply isn't true. Now if you want to demonstrate how we have higher costs of running a business, go ahead. But income tax isn't part of that. VAT is. And we've got one of the lowest rates of that in Europe too.

ivorbeck

All the vote proves to me is that no one likes paying taxes and those that are about to be "bounced" like it less.
A fact of life I'm afraid.

ceridwen

Hmmm....all this bleating about "soak the rich and they'll only run" (as in heading for another country) just sounds like good cause for concerted international action to me - so theres nowhere they can run TO.

Maybe they have got rich through hard work/enterprise/etc - that may be true for some of them. But then - on the other hand - its rather more likely they have got rich through underpaying their workers and/or overcharging for their products or cheating a supplier out of a fair price for their goods.

Guess I'm too fairminded ever to be rich then - sigh..

bermudasniper

I think the following tale sums up the situation:

HOW THE TAX SYSTEM WORKS

Suppose that every day, ten men go out for beer and the bill for all ten comes to £100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay £1.
The sixth would pay £3.
The seventh would pay £7.
The eighth would pay £12.
The ninth would pay £18.
The tenth man (the richest) would pay £59.

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. 'Since you are all such good customers,' he said, 'I'm going to reduce the cost of your daily beer by £20.' Drinks for the ten now cost just £80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the £20 windfall so that everyone would get his 'fair share?'

They realized that £20 divided by six is £3.33. But if they subtracted that from everyone's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid £2 instead of £3 (33%savings).
The seventh now pay £5 instead of £7 (28%savings).
The eighth now paid £9 instead of £12 (25% savings).
The ninth now paid £14 instead of £18 (22% savings).
The tenth now paid £49 instead of £59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings. 'I only got a pound out of the £20,' declared the sixth man. He pointed to the tenth man, 'but he got £10!' 'Yes, that's right,' exclaimed the fifth man. 'I only saved a pound, too. It's unfair that he got ten times more than I did' 'That's true!!' shouted the seventh man. 'Why should he get £10 back when I got only two? The wealthy get all the breaks' 'Wait a minute,' yelled the first four men in unison. 'We didn't get anything at all. The system exploits the poor' The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill.

And that, ladies and gentlemen, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

lamp

I think the tax rise is wholly unfair. There are far more people who have 'creative' methods for having their salary paid, which completely averts the majority of taxes people have to pay. Something like this is only likely to encourage this kind of behaviour.

Increasing taxes is likely to cause a heavy reduction in spending from the 150K club. This may have knock-on effect on unemployment, social well-being, etc.

Yes there is a big deficit of funds in this country. I'm not entirely convinced raising taxes of those who are probably now seeing no increases in salary, potential redundancies, etc improving the situation. There are many inefficient government systems operating in this country that could potentially offer far greater savings.

I can point out a few MPs with creative expense claiming who could probably spare a few pennies to help the economy they so woefully let down....

squidworth

I'm_With_Stupid wrote: »

Err, no it doesn't. Let's compare it to some of the worlds leading and emerging countries, shall we?

UK - 21-28%
Looks like the UK has one of the cheaper tax rates in fact.

lols no!!!

add in national insurance (which goes in the same pot as income tax and is just income tax under a different name)

so if your employer decides to "pay you" £100 extra for sake of simplicity then the employer has to pay 12.8% of that as NI leaving you with £87.20 taxable income

then take off that your 11% NI and 20% tax (31% of 87.20 is 26.16) then that leaves you with 61.04, or in other words the standard uk rate of tax is more like 39%

And then there's always VAT... spend the 61.04 and 15% (£9.16) leaves you with 51.88, so the equivalent of 48% of your £100 can go in tax

KingRaj

Martin!:money: Oh dear.... from the results of this poll, it looks as though you are not attracting too many high earners to the site...........I wonder why that is.......:rolleyes: