Details of Labour's tax plan?

Snakey

Are they planning to keep the PA clawback in their new tax rates? So the marginal rate on £100-123k of earned income would become 69.5%?

Just in case anybody happens to know. I couldn't find it when I looked.

I wasn't bothered originally because they looked unelectable, but although I still think that's probably the case I am less confident based on the more recent polls and media coverage...

Pennywise

They won't have thought about it in such detail. Just the headline changes as usual with no regard for unforeseen consequences.

agrinnall

There are no plans to scrap it.

"The planned overhaul of the taxation of those on higher incomes would have been an obvious chance to remove the absurd and arbitrary marginal income tax band between £100,000 and £123,000, which arises from the policy described as withdrawing the personal allowance. Instead Labour’s proposals would leave this in place, and would increase the marginal income tax rate from 60% to 67.5% within that band - or 66.6% to 73.2% once employer and employee National Insurance contributions, as well as income tax, are included."

https://www.ifs.org.uk/publications/9230

Snakey

Ouch. Well, fingers crossed it doesn't happen then. I can imagine my boss's face if I say I want to drop to a four-day week because the marginal benefit of coming in on the Friday just isn't worth it.

Wayne_O_Mac

Still better than the Tories though.

Then again, taking a bath with a toaster is better than a Tory government.

Pennywise

Snakey wrote: »

Ouch. Well, fingers crossed it doesn't happen then. I can imagine my boss's face if I say I want to drop to a four-day week because the marginal benefit of coming in on the Friday just isn't worth it.

There's already an epidemic of doctors and dentists cutting their hours and some even retiring early to avoid the current 62% marginal rate. (experienced/senior doctors and dentists have average earnings in the range of £100-£123k). Putting the tax up to 69.5% will mean even more cutting their hours. Not only will it reduce the tax income, there'll be fewer doctors/dentist hours worked, thus increasing waiting lists.

I already have loads of clients either reducing hours or increasing pension contributions to get their incomes under £100k. The proposal will tip many more over the edge to avoid it.

Economics of the asylum!!

Wayne_O_Mac

If they're at retirement age or thereabouts, they'll presumably have benefited from free university education. Seems decidedly selfish to take steps like that to avoid paying back to the society that helped them get to where they are.