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'Should high earners pay 50% tax?' poll discussion

edited 5 May 2009 at 3:34PM in Money Saving Polls
67 replies 8.9K views
edited 5 May 2009 at 3:34PM in Money Saving Polls
Poll between 27 April - 5 May 2009:

Should high earners pay 50% tax?

Last week in the budget, the Chancellor announced from next April there’s a new 50p per pound rate for those earning over £150,000. Plus high earners will lose the tax-free personal allowance and higher rate pension tax relief.

Arguments for include. The govt needs the money. Those who can afford it should pay.
Arguments against include. Worries it won’t raise revenue due to avoidance, a brain drain, or discouraging enterprise.

Which of these is nearest your view?

A.I’m NOT a high earner. It should be more than 50%. - 10% (1192 votes)
B.I’m NOT a high earner. 50% is fine. - 40% (4960 votes)
C.I’m NOT a high earner. 50% is too high. - 46% (5713 votes)
D.I’m a high earner. It should be more than 50% - 1% (77 votes)
E.I’m a high earner. 50% is fine.- 1% (143 votes)
F.I’m a high earner. 50% is too high. - 2% (298 votes)


This vote has now closed, but you can still click 'post reply' to discuss below. Thanks :)


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Replies

  • I'm_With_StupidI'm_With_Stupid Forumite
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    50% is about right to me.

    If tax avoidance is an issue, then that should be dealt with seperately. Why should the fact that some people try to find loopholes ever be a reason to lower taxes? Why do we have any taxes at all then?

    As for a brain drain, aside from the fact that most people with brains (scientists, academics, etc) don't earn that sort of money anyway, America is the only developed country in the world that doesn't have a similar tax on the top earners anyway, and I don't think anyone wants to replicate their public services. And discouraging enterprise might be an issue if we were talking about corporate tax, but we're not, so it isn't.

    The alternative is to sack a bunch of public sector workers, creating more jobless, meaning what you'd save on salaries, you have to fork out in benefits anyway.
  • someones got to pay more, people on a low income cant afford to pay any more, so those with higher income will have to sooner or later:confused:
  • MozetteMozette Forumite
    2.2K posts
    I don't see 50% on anything over £150,000 is unreasonable.
    If I earned that much I'd happily pay it!
  • edited 27 April 2009 at 8:12PM
    jimpix12jimpix12 Forumite
    1.1K posts
    edited 27 April 2009 at 8:12PM
    someones got to pay more, people on a low income cant afford to pay any more, so those with higher income will have to sooner or later:confused:

    People who earn more do pay more in terms of actual tax amounts anyway. Why should someone on more money than you pay a higher RATE (not amount) of tax?

    Make the tax rate the same across the board, don't punish the rich with higher tax rates because they have more often than not earned it through hard work, risk taking and perseverance. This country already discourages enterprise by having some of the highest corporation taxes in the world. We need to encourage lots more enterprising people to come here, that's one of the ways out of this recession - not put them all on to the next flight to Zurich just so we can bail out some greedy bankers, MPs and so on. Not everyone who earns £150k is on the fiddle!
    "The only man who makes money from a gold rush is the one selling the shovels..."
  • StinkybellStinkybell Forumite
    193 posts
    Although I am in favour of the 50% tax rate, I do not agree the withdrawal of a high earner's tax free allowance and pension relief - everybody should be safe in the knowledge that they have something tax free every year!
    Chipping away at the mortgage...
    2013:£419k @ 3.14%
    2016:£385k @ 1.79%
    2019:£275k @ 1.84%
    2024: ??
  • prowlaprowla Forumite
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    If I earned £150k and wasn't using "alternative" accounting, then the new tax hike would encourage me to.
    The end result would be a reduction in the tax take.
    Seems to me like a lot of government policy has the opposite effect to its stated intentions.
  • I'm_With_StupidI'm_With_Stupid Forumite
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    spunko2010 wrote: »
    This country already discourages enterprise by having some of the highest corporation taxes in the world.
    Err, no it doesn't. Let's compare it to some of the worlds leading and emerging countries, shall we?

    UK - 21-28%

    Australia - 30%
    Brazil - 34%
    Canada - 29.5-35.5%
    China - 25%
    Denmark - 25%
    Finland - 26%
    France - 33.33%
    Germany - 29.8% average
    Holland - 20-25.5%
    India - 30-40%
    Ireland - 12.5%
    Italy - 31.4%
    Japan - 30%
    Norway - 28%
    Russia - 20%
    Saudi Arabia - 20%-85%
    Spain - 25-30%
    South Korea - 13-25%
    Sweden - 26.3%
    Switzerland 13-25%
    Thailand - 30%
    USA - 15-39% federal, plus 0-12% state

    Looks like the UK has one of the cheaper tax rates in fact.
  • funguyfunguy Forumite
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    The higher rate of tax doesnt affect me but surely they should be trying to encourage people to earn more so they spend more and invest more!!

    I assume people who fall into the higher bracket will simply work less and earn below the threshold, find a loophole or move abroad....i really doubt this will actually gain the government any money! In the long run, i suspect it will lose the government and country money and investment!!

    If the country had a set rate of say 25% on all income then it would encourage people to work more, earn more and pay more tax in general (amount as opposed to percentage)....
  • edited 27 April 2009 at 10:40PM
    Mum_of_3_3Mum_of_3_3 Forumite
    658 posts
    edited 27 April 2009 at 10:40PM
    spunko2010 wrote: »
    People who earn more do pay more in terms of actual tax amounts anyway.

    This country already discourages enterprise by having some of the highest corporation taxes in the world

    National Insurance contributions on any earnings over £44k drop from 11% to 1% so in effect even though people earning more than this amount may pay a higher rate of income tax, it's those of us who are low paid workers who pay more PAYE when you go by percentage of wages.

    Also as I'm with stupid has proved we don't have a very high CT rate in this country & anyone I know who owns a limited company pays themselves a minimum amount for NI reasons & gets the majority of their money from the company via dividends which are taxed at a far lower rate then PAYE (32.5% over £37,400 compared to 40%)!

    This means that anyone with their own company taking enough to take them over the supposed 50% tax band will only pay 32.5% anyway. How is that paying more tax??

    M_o_3
  • edited 28 April 2009 at 1:35AM
    jimpix12jimpix12 Forumite
    1.1K posts
    edited 28 April 2009 at 1:35AM
    Err, no it doesn't. Let's compare it to some of the worlds leading and emerging countries, shall we?

    UK - 28% (50%)

    Australia - 30% (45%)
    Brazil - 34% (27.5%)
    Canada - 29.5-35.5% (29%)
    China - 25% (45%)
    Denmark - 25% (63% HOLY COW)
    Finland - 26% (32%)
    France - 33.33% (21%)
    Germany - 29.8% average (45%)
    Holland - 20-25.5% (52%)
    India - 30-40% (30%)
    Ireland - 12.5% (41%)
    Italy - 31.4% (43%)
    Japan - 30%
    Norway - 28%
    Russia - 20%
    Saudi Arabia - 20%-85%
    Spain - 25-30%
    South Korea - 13-25%
    Sweden - 26.3%
    Switzerland 13-25%
    Thailand - 30%
    USA - 15-39% federal, plus 0-12% state

    Looks like the UK has one of the cheaper tax rates in fact.

    Cheaper corporation tax rates you mean - although not wholly accurate in itself as a statement. Tax laws around the world are subjective and any comparisons are usually crass. But for the sake of getting my point across I've added in the income tax rate (top band) to your list above, taken from the same source that you used (Wikipedia).

    Perhaps we need to factor both into the equation to deduce whether Britain is an expensive place to live for the rich. Alas, since it's 1am and I don't have the brainpower to do that myself, I'll look to the ONS and other qualified sources who have done research into this extensively. Britain is the third/fourth most expensive country in the world to live in:

    http://news.bbc.co.uk/1/hi/talking_point/1136184.stm

    That's working on, presumably, an average wage. There are only six countries in the OECD with a higher tax rate than the UK – places like Denmark, Sweden and Finland. Go figure.

    I think you're all missing the point though. It isn't really all about how much money is being taken by the government. The cash is not always of immediate concern to entrepreneurs, the types of people we need in the UK. What is important is a sense that entrepreneurs are operating in an environment that values what they are doing. Free businesses and individuals to use their initiative and retain the rewards of their efforts and we will all benefit as a society.

    It's driving people away, I tell ye. :rolleyes:
    "The only man who makes money from a gold rush is the one selling the shovels..."
This discussion has been closed.

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