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  • FIRST POST
    Former MSE Lawrence
    'Should high earners pay 50% tax?' poll discussion
    • #1
    • 27th Apr 09, 2:22 PM
    'Should high earners pay 50% tax?' poll discussion 27th Apr 09 at 2:22 PM
    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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    Last edited by Former MSE Lawrence; 05-05-2009 at 2:34 PM.
Page 3
  • TrowbridgeTraveller
    I think the following tale sums up the situation:

    HOW THE TAX SYSTEM WORKS

    ....

    And that, ladies and gentlemen, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
    Originally posted by bermudasniper
    C.Iím NOT a high earner (nowhere near it!). 50% is too high.

    I still don't see why people should pay different rates of tax just because they have had either the ability to secure a good wage, or because they are a good entreprenuer.

    All we are doing is telling people that it's okay not to have ambition, as you get penalized for it.

    BTW - i don't see anything wrong with taxes - i just think that they should be applied to everyone without bias.
    • zygurat789
    • By zygurat789 1st May 09, 12:20 PM
    • 4,229 Posts
    • 1,993 Thanks
    zygurat789
    from each according to their means, to each according to their needs
    • ducky2004
    • By ducky2004 1st May 09, 12:52 PM
    • 88 Posts
    • 35 Thanks
    ducky2004
    from each according to their means, to each according to their needs
    Originally posted by zygurat789
    More like From each according to their inability to escape the tax, and to each according to their wits to explot the system.
  • dottiepeas
    I'm not a high earner, to be honest- it doesn't really affect me, so for me, I don't think it's massively unfair that those earning significantly large sums of money are taxed more. Surely if you earn more, then you can afford to give more tax? I thought higher earners are only taxed using the higher rate on one part of their earnings? Like they get taxed the standard rate up to earnings of £40k or something?, and then anything they earn over that, is then taxed at the higher rate?

    I also don't think this means people will lack ambition in life! As most of us probably wish we could earn over £150k, but in reality most people would never reach that mark anyway. I think the downside of this policy, would be that large businesses might think about relocating somewhere out of UK if they had lower income/business taxes elsewhere! Which inturn might cause more economic problems!...

    Well, one less holiday a year for the high earners isn't that bad!?
    • zygurat789
    • By zygurat789 1st May 09, 4:54 PM
    • 4,229 Posts
    • 1,993 Thanks
    zygurat789
    High earners pay a smaller percentage of their income in tax than do low earners
  • Horace Wimp
    from each according to their means, to each according to their needs
    Originally posted by zygurat789
    Lol, if you're going to dig up an old Marxist quote then at least get it right!

    "From each according to his ability, to each according to his needs"

    And the old answer of course:-

    My ability is zero and my needs are £1000 per week.(adjusted for inflation)
    • tuggy12
    • By tuggy12 1st May 09, 7:42 PM
    • 1,158 Posts
    • 1,349 Thanks
    tuggy12
    High earners pay a smaller percentage of their income in tax than do low earners
    Originally posted by zygurat789
    Back to school for you my friend:rolleyes:

    It's a very simple calculation, the more you earn the more income tax you pay as a percentage and that's even before Darlings changes for next year.
    • ducky2004
    • By ducky2004 1st May 09, 8:17 PM
    • 88 Posts
    • 35 Thanks
    ducky2004
    I think that poster is trying to quote those lefty research that included VAT in the calculation and then forget to count tax credits freebies.

    e.g. Income 16k, Personal allowance 6k, Taxable 10k @ 33% (NI+IncomeTax) @ £3300. Then add VAT paid on skyTV, Wii, DVD, Plasma Screen, total tax might work out to be >41 %. But of course, if those luxuries were not spent and tax credit included, the effective tax rate might be around 15% ish..

    High earner may earn 100k, pays maybe 33k tax, and then invest most of the money, don't spend so much on full skyTV packages etc, so, total VAT paid might not be much and he might ended up paying just 39% of the income.

    "From each according to his ability, to each according to his needs"
    Oh..let's gets a few millions from Africa in then as their obviously have greater needs (don't even have clean water, can't read/write) while British poorest can still afford Premium SkyTV packages and Wii Console and most can at least read/wriite (greater ability).
    • Neilhmtn
    • By Neilhmtn 1st May 09, 10:47 PM
    • 32 Posts
    • 20 Thanks
    Neilhmtn
    I think the last three posters have been extremely unfair towards zygurat789 - as far as I'm aware s/he's correct - high earners do pay a smaller percentage of their income in tax than lower earners in this country, and correcting his/her misquotation of Marx doesn't change that fact.

    It's certainly not as simple as tuggy12 says, because you have to take VAT into account when taking account of a person's annual liability to tax, so income doesn't really indicate that much. Richer people spend less as a proportion of their income than poorer people, because it's easier to save more, as is presumably obvious to people who come to this site.

    As it happens, I don't object to this tax rise, because I don't think the tax burden in this country is very fair at all, and certainly not as fair as some people here seem to think.
    • zygurat789
    • By zygurat789 2nd May 09, 1:02 PM
    • 4,229 Posts
    • 1,993 Thanks
    zygurat789
    A. I never quoted Marx, that was someone else's mistake.
    B. You'll be telling me next that higher earners pay tax at 40%
    `which will also be a mistake - its 32.5%
  • IT_nerd
    Tax 20p
    NIC 11p
    Reduction in tax credit 39p
    (to look after two perimary aged boys because she has been abandoned and the CSA et seq can't do anything)
    Total 70P

    I cannot see how you get 45p
    Originally posted by zygurat789
    It's pretty simple when it comes to matters like this.
    You can't complain about money you didn't earn getting taken away because, shock horror, you didn't earn it.
    You can decide not to better yourself and still get the said free money, but there will be a point when you're earning enough that tax credits don't matter.
    Also, that 39p in the £ is a made up statistic.
    That means if she was earning £100K now, then she would have been getting £39,000 in tax credits.


    C.I’m NOT a high earner. 50% is too high.

    Fixed rate 25% for everyone. Poor included.
    If they want more money, earn it.
    Last edited by IT_nerd; 02-05-2009 at 8:10 PM.
    Savings
    £14,200 with £1100 M.I.A. presumed dead.
  • ped54
    I think in some cases it may be warrented - but to be honest on a whole I think we persecute people who do well in this country. Whats the point in striving to achieve in life only to be taxed a rediculous rate? However, if you are a lazy @rse and sit doing nothing with youre life you are given everything you need / want.... Just my point of view.....
  • teddyco
    Britain is currently on the slippery slope towards socialism......
  • Richard T
    IMHO - High earners fall into either or both of two groups:
    1) High spenders - who stimulate the economy directly.
    2) Savers - who make money available for institutions to lend to stimulate the economy.
    Simply giving more money to the government doesn't stimulate the economy - usually the reverse? :rolleyes:
  • harryhound
    Tax 20p
    NIC 11p
    Reduction in tax credit 39p
    (to look after two perimary aged boys because she has been abandoned and the CSA et seq can't do anything)
    Total 70P

    I cannot see how you get 45p
    Originally posted by zygurat789
    Think I was assuming that she was in some sort of pension scheme and thus not paying 11p NIC on top of the 20p most of us have to pay.

    Harry.

    PS I also wonder what her parents and siblings are doing to support the future of the two primary school children, following the collapse of the "relationship" that produced them.
    Do let us know.
    Last edited by harryhound; 06-05-2009 at 7:41 AM.
  • unionjack81
    Personally, I disagree with the 40% tax bracket never mind 50%!

    I'm a basic rate tax payer myself so it doesn't affect me directly. However, the thought of me working hard and being lucky enough to be rewarded with a large enough salary to tip me into the paying a higher tax rate than someone else doesn't really make sense (in my simply mind).

    How can the government possibly hit these hard working, successful people, when many of them (politicians) are no better than leeches. Lately it seems like there is nothing but expense scandals at Westminster..... um.... why don't we cut politicians expenses and allowances instead of robbing people?

    I don't agree with the argument about people who earn more should pay more because they can afford to. How does being able to pay more justify more? If you went to a restaurant and someone asked you how much you earned so they could calculate the bill would you accept it?
    Last edited by unionjack81; 06-05-2009 at 7:09 AM. Reason: clarifying politicians
  • DavyBoy
    However, the thought of me working hard and being lucky enough to be rewarded with a large enough salary to tip me into the paying a higher tax rate than someone else doesn't really make sense
    Originally posted by unionjack81
    This is a common misconception of the way tax bands work, and a mistake I made when I was younger. It was common knowledge that the higher income rate was 40% at £40k, so I never quite saw the reason to earn more than £39,999 if suddenly I would have to pay 40% tax on everything, and not 22% as previous.

    What it actually means is that you pay 40% tax on everything you earn after £40k. So the first £39,999 is taxed as it was before, but now you pay 40% tax on everything else (so if you earned £41k, you only paid 40% on £1k, and the 22% on the £40k). So everything up until £150k still attracts tax at the same level it does before, but everything over that gets taxed at a higher 50% rate.

    You don't suddenly lose money for earning £1 more!
  • harryhound
    Unless you are on benefits at the bottom of the pile and you are honest enough to tell the whole truth to the various bureaucracies involved..The curse of means testing, See zygurat789 example above without factoring in the freebies from the local council, NHS etc.her daughter gets to keep 30 pence of every extra pound she earns.
    The so called poverty trap, that makes "working the system" the rational option.
    Last edited by harryhound; 07-05-2009 at 8:03 AM.
  • unionjack81
    What it actually means is that you pay 40% tax on everything you earn after £40k. So the first £39,999 is taxed as it was before, but now you pay 40% tax on everything else (so if you earned £41k, you only paid 40% on £1k, and the 22% on the £40k). So everything up until £150k still attracts tax at the same level it does before, but everything over that gets taxed at a higher 50% rate.
    Originally posted by DavyBoy
    Ok, so when I earn £40,000 my employer gives me a 'cost of living' pay rise and my wages rise with inflation. However then I'm taxed more on this new pay (40%) which means I'm worse off than I was previously (relatively speaking) because I only get 60% of it instead of 80%.

    Have I picked this up wrong? I still don't buy it. This is wrong no matter what way you look at it.
  • harryhound
    This is called progressive taxation and is a good way of extracting more tax without those paying realising.

    Over the years there has been a huge fuss in parliament about such traps being set up by the government, especially when they refer to the personal allowance (not) keeping up with inflation.

    People are less aware of changes to National Insurance (just another income tax) so that gets monkeyed about more often.

    MP's and all those who spend other people's free money are really good at arguing what a good job they do and how they deserve an ever increasing amount of this free money for their pet project.

    The reality is that this country is deeply in debt for a generation and we are already debating comparatively small tax rises. Just wait until after the general election when the peasants in China get a bit fed up lending us money.
    We will either go bankrupt Argentina style, or it will be noses to the grindstone, shoulders to the wheel and backs against the wall.

    Those under 35 might like to think about emigration.
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