New pension allowances , autumn statement

zagfles

grey_gym_sock wrote: »

there may well be something in the budget that can be spun as making the rich pay more (however you define "the rich" - it can mean lots of things, indeed). there are usually plenty that could be spun that way, because there are many different measures in every budget. for most ppl, you win on some, and lose on others.

the supposedly anti-rich measure could be almost anything. they have nowhere near ruled out everything except pensions contributions.

There were mutterings about a wealth tax, but it would seem almost inconceivable the Tories would go for that. It would probably result in a backbench rebellion bigger than over Europe!

My money's on still pensions.

System

Taxing the rich doesn't preclude taxing everybody else as well.

Eellogofusciouhipoppokunu

So many ordinary people are caught in the 40% tax that any impact on those within it it can't really be seen as an attack on the 'toffs'. I could imagine the 50% tax bracket could lose its pension rebate, but not the 40% band.

However, if they did get rid of the 40% tax rebate, then they'd have to combine it with a raising of the 40% bracket so that it hits those with truly higher incomes.

grey_gym_sock

given they have been reducing the threshold where higher rate starts in the last few years, and also way they are going to means-test child benefit, the government clearly thinks that hitting ppl in the not far into the 40% bracket is a good way of appearing to tax the rich.

meanwhile, they've already announced that the 50% rate will be cut to 45%. so that tells you who they really want to look after.

so the evidence suggests that ppl earning c. £40-60k should be worried about threats to make the rich pay more. and ppl earning £150k+ should relax.

gadgetmind

grey_gym_sock wrote: »

meanwhile, they've already announced that the 50% rate will be cut to 45%. so that tells you who they really want to look after.

When the top rate of tax went up by a staggering 1000 basis points, it was made clear by labour that this was a temporary move, but they also knew they were about to get booted out and this was also their "poison pill" for the next government.

grey_gym_sock

yes, but why is this rise being reversed now, when other taxes are still rising, public services being cut, (hence) unemployment increased, there is still a huge public sector deficit, etc? the crisis isn't over for most ppl.

gadgetmind

grey_gym_sock wrote: »

yes, but why is this rise being reversed now

Because it was temporary and also because it's causing damage as it is so the faster it's unwound the better.

Is it time for us to discuss the Laffer Curve again?

grey_gym_sock

gadgetmind wrote: »

Is it time for us to discuss the Laffer Curve again?

well, if you insist ...

at a high enough marginal rate of tax, ppl won't bother to work as much, so tax revenues will actually fall?

yes, somewhere over 90% ... at 50%? no.

zagfles

grey_gym_sock wrote: »

well, if you insist ...

at a high enough marginal rate of tax, ppl won't bother to work as much, so tax revenues will actually fall?

yes, somewhere over 90% ... at 50%? no.

It's not so much they won't bother to work, but they'll find ways paying the tax, or even moving abroad like some high profile people have. It only takes a small minority to do this for higher rates of tax to become counter productive.

It's the same at the bottom end, as I've been saying on the benefits forum. There the marginal rates are even higher, up to 100%. UC will improve this massively, so although UC appears to pay more, it may well save the govt money. Just like lower tax rates.

grey_gym_sock

zagfles wrote: »

It's not so much they won't bother to work, but they'll find ways paying the tax,

yes, but that's really an argument for proper anti-avoidance measures.

and there are plenty of avoidance schemes with 40% tax. 50% doesn't make much difference. at 98%, there'd be a lot more of it, but not at 50%.

or even moving abroad like some high profile people have. It only takes a small minority to do this for higher rates of tax to become counter productive.

insignificant. very few ppl would move abroad because of tax rates at any level. many of those who move abroad would do so regardless. there's virtually nobody who'd stay to pay 40% tax but move if it's 50%.

a few cases have been publicized in a deliberate attempt to make the issue appear more significant than it is.

It's the same at the bottom end, as I've been saying on the benefits forum. There the marginal rates are even higher, up to 100%.

yes, the marginal rates are high enough there that there's some truth in the theory!