What should the maximum Income Tax rate be?

oldvicar

Those who voted for very high e.g. 100% rates are making a valid suggestion: They are effectively voting for a maximum income or standard of living in this country. The end of fat-cattery. Its just the flip side of the coin to the present system of guaranteeing a minimum standard of living for everyone. Idealistically pure, but economically flawed.

I voted 30%, presuming that NI would be on top. Otherwise I'd have gone for 40%, for no reason other than it feels about right.

I'm very tempted by the arguments advanced for a flat tax - such as everyone pays the 30 or 40 % on income above a tax-free allowance. Elegantly simple and cheap to administer and nicely progressive (or "fair" in today's parlance). Of course politicians are only human and there would be tinkering around the edges such as extra allowances or benefits for the disabled and parents etc., but a flat rate overall would do away with a lot of perverse incentives.

Jeff_Bridges_hair

samhale wrote: »

My economics lecturer says the optimum tax for the highest band is 53.5%. Any more and people move away to havens, and any less, less money is collected.

This move from 50% to 40% is entirely for personal reasons - nothing for the benefit of this country at all.

Well the move is from 50% to 45%

sophipureland

Im shocked by the poll rates, majority of votes said tax at 50%. Are they low earners looking at it from an angle where the wealthy should pay more tax.
We are taxed on Earning and everything we spend!!!
NI
Council tax
food
Clothing
Petrol
Car Tax
Tax on savings
The list is endless for the worker. Whether wealthy or not the only people who benefit are the super rich or those on benefits (free wage, free housing and no money to spend).

ukmonkey

205 people have voted for 100% - are they real?! Do these people understand what percent means?

Morons.

BNT

I don't see any reason why anyone should pay more that 30% of his income to the central state. If the government stopped interefering in our day to day lives they'd need less money.

patanne

How about :-

Nobody working 40 hours per week (between a couple) for minimum wage should pay tax. To keep them recorded for tax & NI purposes they should pay 10p per week NI. We should go back to tax allowances for children upto say a max of 3. This amount gets added to the tax allow. for min wage & can be allocated between parents or to the parent with custody. If the person does not reach that code then the amount is added automatically to their pay & is deducted from the employers liability to HMRC. The same can be done with any care-type allowances & anything else I have forgotten in this spur of the moment set of random thoughts. Tax is then paid on the rest at whatever rate is deemed necessary for all with possible higher levels but NOT eroding the personal allowance which in my opinion can never be seen as fair as, after all it doesn't matter how rich you are you ARE still a person & therefore entitled to that personal allowance. Go on now all have a go if think you can justify it

Eco_Miser

happyinflorida wrote: »

Why have so many people answered the vote that people should pay 100% of what they earn in tax?!! That's silly - you'd have no money left to live, so what's the point?! I can see one or two people being silly but as many as 145 so far seems downright ludicrous. Wish people would answer these votes properly and not just muck around.

I think you are misunderstanding the question, which is about the top marginal rate, which might only apply to that part of someone's income above £1million, not the whole of their income. It certainly wouldn't leave anyone with no money to live, though it would provide a very strong incentive to avoid tax and/or restrict one's income.

inicholson

I don't think that what the maximum tax rate should be is relevant at this point in time. How can a government claim that we have to reduce public spending and/or raise more taxes in order to reduce the national debt and that "we're all in this together" when they're cutting the rate of income tax for some people but freezing wages and increasing pension contributions for public sector workers such as nurses and teachers.

An honest government (has anyone ever seen one of those?) would have either raised one or all income tax rates marginally or frozen all rates of tax while reducing public spending. This government is using public sector pensions and wages to pay off the national debt while offering tax cuts to those one the highest salaries. Some of us are in it a lot more than others it would seem!

CutTheJargon

MothballsWallet wrote: »

I still think there should be a super-high rate for celebrities and sports stars (eg footballers) who have endorsement deals - after all, what extra work do they do for that money? Just wear and talk up the product(s) in question. That's about it (from the outside).

So why shouldn't they pay a higher rate on that money because they've done very little extra to earn it?

The tax system should allow people to be rewarded for actual work that benefits them and others, not for promoting brand X over brand Y for whatever reason(s) (including the endorsement deal).

Does that mean that Marketing people should pay more tax? Or sales people?

StevieJ

makintracks wrote: »

What a good point you have. It is a long time since I last posted because someone invariably makes a nasty comment even if you are posting something useful, but I too could not believe that there are folks who actually voted for 100%, 95% etc. as a tax rate.

What a great story too. I hope that the people who voted for tax rates up to 100% may read it and think about it.

100% tax that is nothing, apparently the UK have twice had periods since WW2 when taxes were well above that :eek:

Special rates have been introduced twice within the post-war years, causing income tax in certain circumstances to exceed 100%.

• 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://www.hmrc.gov.uk/history/taxhis7.htm