Income Tax

vivatifosi

I've never understood how, in a capitalist country, people have thought taxing the rich on 98% of their income above a certain level is a good idea. I'm old enough to remember this. Anyone who was rich enough went to Switzerland, or Monaco, or whatever tax regime was more benign (which at the time was most). Very few people said they'd stay in the country and pay the high taxes other than Paul McCartney.

Pennywise

Loughton_Monkey wrote: »

I think us early retirees should be able to get 'tax' tax credit! A free bus pass and heating allowance is not good enough!

You are getting a "tax" tax credit - it's called the state pension - knock that off the taxes you're paying and you'll see you're paying far less "tax" than the person next door! Look at how much the Govt is paying you and then deduct how much you're paying the govt - forget what it's called, just look at the figures.

Generali

blueboy43 wrote: »

It always strikes me as a little strange that people forget that under the Tories between 1970 & 74, the top rate of income tax was 75% and that Anthony Barber increased corporation tax to 52% in 1973 !

(even the Guardian archive claims that Dennis Healey increased corporation tax to 52% when in fact it was done from April 1973).

Denis Healy increased Corporation Tax in 1973 (link) in his March 1974 budget (aka Ways and Means):

HC Deb 26 March 1974 vol 871 cc319-20 319 § Companies have in general been doing rather better in the last year or two and profits last year reached a very high level. There was, in fact, a significant increase in the share of total national income going to companies. In these circumstances, it is only right that companies should bear their share of the cost of putting the economy back on course.



§ I propose, therefore, first, that the corporation tax rate for the financial year 1973 should be 52 per cent., a little above the rate of 50 per cent. which, I think, has been generally expected; and, secondly, that companies should be asked somewhat to accelerate the payment of a proportion of the corporation tax for the next year. This acceleration will work on the following lines. As from 1st April, when they pay their advance corporation tax on distributions, they will have to make an additional payment of a half of that sum. This extra amount will then be set off against their corporation tax liability on their profits for their accounting years ending in 1974–75. I propose that small companies shall be charged at a rate of 42 per cent. Building societies, co-operative societies and housing associations will remain chargeable at their present rate of 40 per cent.

In the reading of the above I would guess that it was normal at the time to see how the economy and companies were doing and then tax them accordingly.

From Barber's 1973 budget speech (link):

HC Deb 06 March 1973 vol 852 cc261-2
I now turn to corporation tax. The new system of corporation tax for which we legislated in last year's Finance Bill comes into effect next month—in April. As from then, the old system will no longer be operative. As the House knows, however, corporation tax is paid in arrear. It follows therefore that in this Budget it is necessary to fix the rate for the financial year 1972, the last under the old system. There will be no change in the present rate and it will therefore remain at 40 per cent. for the financial year 1972. Next year the rate will re-sect the change in the system, but it is too early yet to reach a decision as to what the appropriate rate will then be.

It's easy to get caught out by only looking at a part of the picture. Get it from the horses mouth if you can, much more reliable IME.

StevieJ

I have been looking at cabinet papers and they give a fascinating insight into the thinking of the time, and very often expose created myths e.g. Labour always leave a financial mess.

StevieJ

vivatifosi wrote: »

I've never understood how, in a capitalist country, people have thought taxing the rich on 98% of their income above a certain level is a good idea. I'm old enough to remember this. Anyone who was rich enough went to Switzerland, or Monaco, or whatever tax regime was more benign (which at the time was most). Very few people said they'd stay in the country and pay the high taxes other than Paul McCartney.

Good old Macca

StevieJ

Pennywise wrote: »

You are getting a "tax" tax credit - it's called the state pension - knock that off the taxes you're paying and you'll see you're paying far less "tax" than the person next door! Look at how much the Govt is paying you and then deduct how much you're paying the govt - forget what it's called, just look at the figures.

I thought he was an early retiree? so presumably no state pension yet. I suppose he will be saving on NI contributions though.

StevieJ

Generali wrote: »

Of course I do (link), from HMRC.

In 1947-48 Atlee* (Lab) was PM. In 1967-8 Wilson (Lab) was PM. Both presided over Governments that confiscated wealth or at least tried to.

Presumably that is where those woodlands came in handy, where there's a will there's a way

TrickyDicky101

Politicians (of whatever political hue) are all convinced that they know how to spend taxpayers money much better than the taxpayers themselves.

Generali

StevieJ wrote: »

Presumably that is where those woodlands came in handy, where there's a will there's a way

...and suitcases full of cash being taken to Zurich via France.

Generali

TrickyDicky101 wrote: »

Politicians (of whatever political hue) are all convinced that they know how to spend taxpayers money much better than the taxpayers themselves.

Thatcher was one of the very few in my lifetime that seemed to think otherwise.

She also broke the power of a lot of legal cartels eg unions, professions, banks. Very MSE to allow competition to drive down prices.