How times have changed.

ILW

stewil18 wrote: »

what about a flat tax.....oh sod it, i'm not going there.......;)

Stamp duty is payable on flats.
Or am I missing something here?

stewil18

ILW wrote: »

Stamp duty is payable on flats.
Or am I missing something here?

without going into detail, yes you are....a flat tax instead of a progressive tax. not a flat as in a dwelling.

ILW

stewil18 wrote: »

without going into detail, yes you are....a flat tax instead of a progressive tax. not a flat as in a dwelling.

Thank you for explaining to me.

Generali

StevieJ wrote: »

In the 70's we had the rich marginally taxed at (up to) an incentive busting 98% of their income :eek: That was sorted and now we have the shocking tales of how that poor are now being hit with marginal rates at similar level


http://www.mindfulmoney.co.uk/wp/shaun-richards/a-real-debate-is-still-required-on-higher-tax-rates-in-the-uk-as-they-are-to-be-found-in-unexpected-places/

The top rate of tax on 'unearned income' (e.g. interest on savings) maxed out at 168%. For each pound of interest earned, £1.68 was payable in tax!

The effective marginal rate of tax is a problem for a welfare state. IIRC, under the Tories in the 1980s, welfare was often withdrawn at a rate greater than the additional income earned so if you earned more money you had less cash in your pocket at the end of the week.

The alternative is to do what New Labour did and extend benefits to the rich which allows you to taper removing benefits so that people don't face this problem. That then creates a whole new !!!!!! sandwich of course where pretty much everyone is on benefits.

kabayiri

Working tax credits are effectively a subsidy on business.

If they did not exist, would a lot of low paid jobs become unviable ?

StevieJ

Generali wrote: »

The top rate of tax on 'unearned income' (e.g. interest on savings) maxed out at 168%. For each pound of interest earned, £1.68 was payable in tax!

.

I would like to see that calculation.

Generali

StevieJ wrote: »

I would like to see that calculation.

A quick Google can't find it but if you can be @rsenalled to search through my posts you will find a link.

There was a specific tax on unearned income (called Surtx/Super Tax I think). Twice it was raised at a rate above 100%.

StevieJ

Generali wrote: »

A quick Google can't find it but if you can be @rsenalled to search through my posts you will find a link.

There was a specific tax on unearned income (called Surtx/Super Tax I think). Twice it was raised at a rate above 100%.

I was Spurred on by your challenge

• For 1947-48 a special contribution was payable when a person’s total income exceeded £2,000. For investment income over £5,000 it was 50%. So with income tax at 45% and surtax at 52.5%, the effective rate was 147.5%.
• In 1967-68, the special charge was imposed. For investment income over £8,000, the rate was 45% which - with income tax at 41.25% and surtax at 50% - meant a total rate of 136.25%.

http://forums.moneysavingexpert.com/showpost.php?p=41153240&postcount=11

But I have to post this as well from the same thread

All the historic tax tables are still available.
Do you actually have any evidence that marginal rates were higher than 100% ?

It sounds a bit like a urban tory myth to me (like so much of the early 1970's)

AFAIK top rate on income was 83% with a 15% surcharge on unearned income.

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 !:eek:Surely not.

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

Or that it was Edward Heath that increased employers national insurance premiums in 1973 - or that the rate of employee national insurance was 6.5% before 1979 and has marched up ever since (most of the increase under Tory administrations).

The top 10% of taxpayers paid 35% of all income tax pre Thatcher (source IFS) - by 1986/7 this had increased to 39%, it then increases to 42% in 1991 and on to 51% by 2001 (note how the biggest increase in share occurs well after the main top tax rate changes).

This is much as function of the changes in income distribution as anything else (ie the rich have taken progressively more of the cake no matter who has been in power).

http://forums.moneysavingexpert.com/showpost.php?p=41152596&postcount=10