The 50% Tax Rate

lostinrates

kabayiri wrote: »

In the context of our economic situation, the 50% tax rate is a non issue in my view.

On it's own it isn't going to generate much tax revenue to reduce the deficit.

Dropping the rate won't bring in many foreign wealthy people. They weren't exactly flooding in prior to it's introduction were they?

We'd be much better off raising the tax threshold at which people pay tax. This plus a squeeze on benefits will encourage people back to work.

I agree re raising tax threshhold I think...but yes, foreign people DID ''flood'' into London. Football club ownership, big landmark businesses and housing etc....it would be much better if the taxation were changed to reflect this. A lot of that was political too. I also know and know of wealthy people from overseas who bought property in London and university cities with their children's future in mind. I mean, for example, I always thought to not grant Al Fayed citizen ship on the basis he was greasy and ''not nice'' was stupid, on the basis he would have had a LARGE tax bill to pay as a UK subject as opposed to a Swiss resident visit to run his businesses and indeed, his ''second homes'' in Enlgand and Scotland. I'm not sure how we tax, for example, homes used two weeks a year...but Knightbridge has a fair few on a high council tax rate. SWalk down Sloane St, and its not English chatter that fills the ears. And that's all good...if it can raise money for the coiffers IMO.

StevieJ

Loughton_Monkey wrote: »

My sentiments exactly, and similar to my own past rantings.

I have several anecdotal personal experiences of families; ones who dote on their children to degrees you can't imagine [e.g setting fire to the Cricket Clubhouse meets with a mere 'talk' trying to explain to a 13 year old why it was not a 'good idea' and how he has cost the club 'lots of money'.....].

Predictably, such parents ultimately suffer two things (a) a bit of poverty since huge amounts have been spent on spoiled children, and (b) the spoiled chidren turn out to be drop-outs, drug smugglers, or in jail....
.

Or (c) Deputy PM

During an interview in which he condemned the vandalism wrought by rioters last week, the Deputy Prime Minister was reminded of his admission that he had set fire to two greenhouses as a schoolboy.

http://www.telegraph.co.uk/news/uknews/crime/8706292/England-riots-Nick-Clegg-reminded-of-prickly-past-in-radio-interview.html

holly_hobby

For the benefit of lostinrates...

Tax evasion/doging as stated is illegal - I apol for inc the term of "avoidance" in place of evasion. Tax mitigation is as I stated, perfectly legal.

Regrading your "corrections" however ....

150k is where the 50% (2010/11, 2011/12) tax band kicks in ... which was the point in hand - please refer to HMRC for your clarification. For your ease of ref - http://www.hmrc.gov.uk/budget2011/rates-allowances.pdf

The 100k salary you (incorrectly) corrected and directly link the 50% higher tax band to is wrong - this figure is actually in relation to the upper income limit for personal allowances (2010/11, 2011/12) - whereby the individuals personal allowance is reduced by £1 for every £2 that exceeds the 100k threshold. (albeit this reduction in personal allowance was not raised for discussion, but does have the effect of further increasing the individuals marginal rate of tax).

To be clear - I have absolutely no objection to anyone adding to, or amending inaccurate info on anyones post (an attitude I'm sure all forum members hold) - but to do so without actually checking the accuracy of the original statement or the validity of the proposed "amendment", is clearly a most grave error and obviously to be highly avoided when unfamiliar with the facts.


H

lostinrates

holly_hobby wrote: »

To be clear - I have absolutely no objection to anyone adding to, or amending inaccurate info on anyones post (an attitude I'm sure all forum members hold) - but to do so without actually checking the accuracy of the original statement or the validity of the proposed "amendment", is clearly a most grave error and obviously to be highly avoided when unfamiliar with the facts.


H

Thanks and apologies...I checked with the tax payer, who it seems is incorrect....discussions recently here also highliughted that this loss of personal allowance at £100k puts people in a certain payment bracket at 62% effective loss.

holly_hobby

lostinrates wrote: »

Thanks and apologies...I checked with the tax payer, who it seems is incorrect....discussions recently here also highliughted that this loss of personal allowance at £100k puts people in a certain payment bracket at 62% effective loss.

Thanks and happily accepted ....

A reduction of £1 in every £2 off the indviduals PA is certainly eye watering, especially when you hit the 50% bracket too - but the argument by some, that if you get to those levels of salary you would hardly notice the difference, a pretty mute one I feel.

Unfortunately, balancing the books (apart from loan stock) can only really be achieved by taxing those who contribute, be it by standard inc tax, or back door taxes such as NIC & PA reduction.

Our free (on treatment) NHS and benefit system are the envy of many countries (and rightly so), our banking protection, and public services & armed forces that we take for granted, all need funding ... from somewhere.

Unfortunately, it is only those who pay taxes who are the contributers - so the less of us in employment, utilising invesments, paying road tax, tax on fuel, VAT duty etc .. etc .. the higher they will have to raise taxes to take account of the rising deficit in tax income - v - gov liabilities.

If the Gov are worried about a back lash on raising coffers - good old petrol & road fund licence gets it, and the smoker & those who like a tipple bear the brunt .. as how ever much we may complain, we still use/need our car, can't give up smoking and lets face it need a good large chardonary on a Friday eve to put celebrate if we are lucky enough to still be earning an income !!! :j


The attitude is those who can contribute more, should, is in essence plausible and I do agree ... but to a point ....

As I said in my earlier post we need higher rate tax payers in our society, but to effectively punish them for being in the higher achieving income bracket due to their employment/role etc (by the reduction in PA & advanced tax band), is I feel equally as barmy as (in a number of published cases) making unemployed income and benefits pay more than the average earned salary creating a "it doesn't pay to work" attitude amongst those in the situation.

The idiotic thing about the Osbourne cuts to gov sectors (local councils), in the published numbers, is that the gov have lost income tax/nics etc from all those who now find themselves unemployed - and will no doubt be paying a fair number of them a whole range of unemployment and social benefits instead .... and the higher the benefit bill the larger the booty bag the Gov need to break even .... and up go taxes again .... utter ... utter ... barking madness...

Unfortunately there are only 2 things certain in life ... death and taxes ... and you may try, but won't suceed in avoiding either of the blighters ... :mad:

Holly x

cepheus

holly_hobby wrote: »

Unfortunately there are only 2 things certain in life ... death and taxes ... and you may try, but won't suceed in avoiding either of the blighters ... :mad: Holly x

So the rich club would like us to believe. About a decade ago I attended a seminar on tax planning by someone from the Rothschild group.

They introduced the lecture by unapologetically bragging that the richest person in Britain at the time, the Duke of Westminster pays no tax. Everyone in the audience thought this was a wonderful achievement, whilst I was completely flabbergasted. Actually the reality is even worse, this guy actually gets paid by the government!

The Duke of Westminster - Britain's richest man, with estimated wealth of £4 billion - has received £3m in taxpayers' money to help boost his farm's profits.

http://www.guardian.co.uk/uk/2001/may/20/ruralaffairs.theobserver

Very nice indeed Eh? I'm sure he deserves every penny.

Remember the 'Queen of Mean' Leona Helmsley? Her fate was sealed when she was overheard stating: "We don't pay taxes. Only the little people pay taxes...",

Unfortunately, she only served a fraction of the 16 years sentence. After all only the little people do time.

StevieJ

Hey leave DOW alone he is one of our boys, we quite like the fact that he owns the posh half of London but lives up here because it is[STRIKE] cheaper [/STRIKE] nicer

holly_hobby

cepheus wrote: »

They introduced the lecture by unapologetically bragging that the richest person in Britain at the time, the Duke of Westminster pays no tax.

I obviously need to change my accountant ....

H

yesdigger

Hi,

I haven't read every page of this thread, but I thought for what it is worth I would stick my ore in.

This thread began as comments about the 50% tax rate, to be honest when you look around the world there are two things that become clear.

1st : Higher taxes make people (especially lower earners) poorer - to solve this problem I would scrap income tax for low earners and limit tax for everyone at no more than 20%. Scrap or lower VAT to no more than 5%. Scrap other taxes such as inheritance tax, car tax etc

People at this point might say this is unfair, but lets look at how the current system works in the UK, if you earn the minimum wage (around £12,000 I think) you pay around £7,000 in tax! Where as if your a millionaire chances are you have an accountant, and avoid paying tax on lots of your income.

The next thing people think is "well, that's all great but how you going to pay for it?" By cutting tax it is proven that your tax take actually goes up (see Hong Kong, early 60s. Eastern Europe, early 90s etc). Also because companies are earning more money they invest more, create more jobs, more wealth, push up wages etc. This has happened in Europe and Asia.

This brings me on to point 2....

2nd : State Monopolies never work, competition does (provided it is correct regulated by governance and the educated consumers) - in an earlier post I read ...

Our free (on treatment) NHS and benefit system are the envy of many countries (and rightly so)

This is totally wrong, I have been lucky enough to have lived in Europe and let me tell you the NHS is shocking in comparison we do not measure up well compared to other wealthy nations. People in Germany and France don't look at the NHS and say how good it is, actually they are shocked at how poor many aspects of it are! I think the people in the NHS are excellent but the service as a whole is poor and constrained.

The NHS punishes the poorest people as its often middle class people who kick up a fuss get to see the consultant first or get the drugs they need and so on, other state monopolies also punish the poorest, education is another good example. The poorest children end up in the worst schools as children of "pushy" middle classes kick up a fuss, threaten court action to get little John or Jane into the best school in the area.

How I would introduce competition in health is that I would make it the law that everyone needs private health insurance, like in Germany or France but the state would provide that insurance for the lowest earners and children up to 16. This would mean companies would compete for your business meaning continued investment in hospitals and treatment. We could make the law enforce these companies to provide the same service and treatment for people on the government scheme.

I think the key thing I want to make clear is that I think any such schemes will need to be well regulated to ensure that the poorest don't lose out but at the moment I think they would benefit.

Before people give me some stick for this post, I want to make it clear that I am a working class Yorkshireman, who lives in a working class area but believes the current system is so wrong that drastic change is needed.

I believe that the state should only provide certain key services, such as fire, police, national security and so on. The state should also provide protection for the poorest in society, but at moment we go to far, as benefits are limitless even in Norway and Sweden the benefits are generous at first but after a given time they stop as you must find a job if you are able to work!

As a country we are robbing our children of their future to pay for our standard of living, this is theft and we need something drastic to fix this and above is a sample of what I think we should do.

People are free to agree or disagree but we need to have a discussion as a nation about where we go next! I know this has gone off the original topic about the 50% tax rate but I think it is related.

Thanks

lostinrates

holly_hobby wrote: »

A reduction of £1 in every £2 off the indviduals PA is certainly eye watering, especially when you hit the 50% bracket too - but the argument by some, that if you get to those levels of salary you would hardly notice the difference, a pretty mute one I feel.

Um, with out wanting to create ire through lack of understanding again (I am not the clearest communicator)...do you mean ''Moot'' or can you explain that otherwise...not sure I understand If its moot, then I don't agree. Its neither necessarily ''not noticed'' at that level...eg

The difference in tax for us this year would be enough for me to buy the white goods I'm doing without and to install some heating into our house. I guarantee we'll notice come December/January the extra tax.

...nor do I necessarily feel its a bad thing to notice it however....I just would rather we noticed it a little less! I think its good to feel contributary to an important function of society. Where the argument lies perhaps is by how much, and how far the state involment in function of society should be and how successful it is.