Can we talk about £100-120k marginal tax rate
Discussion
okgo said:
FredClogs said:
How did you calculate that? You don't know what I contribute or what I cost the country.
Somewhere else on this forum it was pointed out that unless you earn a lot of money (you clearly don't judging by your response) then you're a cost. Should we just cull all the people who are a cost to society then? Is that the solution? Or, like I mentioned earlier, just ensure everyone gets £99k a year and any excess chuck in a kitty for crimbo?
okgo said:
Somewhere else on this forum it was pointed out that unless you earn a lot of money (you clearly don't judging by your response) then you're a cost.
The tipping point is about £40k IIRC. Anyway it's all based on averages and unless you know the exact circumstances of an individual then you couldn't really say one way or another. Someone who has no kids and never will have kids and never uses the NHS and earns £30k could be a contributor. Someone who earns £60k has 10 kids and is HIV positive would probably be a beneficiary.plasticpig said:
okgo said:
Somewhere else on this forum it was pointed out that unless you earn a lot of money (you clearly don't judging by your response) then you're a cost.
The tipping point is about £40k IIRC. Anyway it's all based on averages and unless you know the exact circumstances of an individual then you couldn't really say one way or another. Someone who has no kids and never will have kids and never uses the NHS and earns £30k could be a contributor. Someone who earns £60k has 10 kids and is HIV positive would probably be a beneficiary.FredClogs said:
plasticpig said:
okgo said:
Somewhere else on this forum it was pointed out that unless you earn a lot of money (you clearly don't judging by your response) then you're a cost.
The tipping point is about £40k IIRC. Anyway it's all based on averages and unless you know the exact circumstances of an individual then you couldn't really say one way or another. Someone who has no kids and never will have kids and never uses the NHS and earns £30k could be a contributor. Someone who earns £60k has 10 kids and is HIV positive would probably be a beneficiary.
FredClogs said:
Welshbeef said:
FredClogs said:
If you're making £100k pcm then you can afford to pay tax, your "tax" is no more a penal than the guy paying 20% on his average salary.
Congrats on being considerably richer than me though, be a sport and do the right thing.
Your wide of the mark (excl NI)Congrats on being considerably richer than me though, be a sport and do the right thing.
Average salary is £27k that individual will pay £3,280 tax meaning his marginal rate of tax is 12%
£100k situation is paying c£30k in income tax or 30% of his income
Now let's say average salary individual has 4 kids he gets child benefit equal to that salary as such he pays £0 effective tax.
Chap on £100k pays in £30k gets no benefits.
Is that fair?
Or what should be fair?
If it's as per your statement not being more punitive that on average salary then chap on £100k is due a nice tax reduction of £18k down to £12k tax.
£ wise as well the £100k chap excl NI takes home page £5,074 the chap on £27k with 4 kids effectively takes home net £2,250
Now I don't know of many PAYE jobs or contractor jobs paying £100k could just walk into it with GCSEs. The other aspect is quantity of roles, lose a £27k job there are a vast number of roles to go for , whereas at £100k upwards the triangle gets thinner & arguably you don't walk fresh into a comp at those levels you build up / unless your brought in for change management over a year or so then you are no longer required.
Admittedly LTIPs and annual incentives which could be 30% to 2x ++ base come into play.
plasticpig said:
There is no such thing as a fair tax system; as peoples idea of what is fair vary so wildly. One thing I would say is from a historical perspective income tax is actually quite low. In the 70's there were bands of up to 83% for normal income tax and up to 98% for some classes of investment income.
A post war period which ended in virtual economic collapse does not constitute historically high income tax rates.Income tax rates in the 19th century (when imposed) varied between around 1% and 10% (during the Napoleonic wars and as a higher rate) and this was with far more of the populace exempt from income tax via the personal allowance.
In the early twentieth century this was increased, but even in the inter-war years when Britain was repaying its debts higher rate tax, or surtax, reached a maximum 5% to 37.5%.
Even comparing headline rates over time is highly misleading because, as above, the personal allowance was historically far larger in relation to average earnings and many tax reliefs such as MIRAS or married couple's allowance were abolished after the 1970s and were still in existence then.
Wasn't mortgage interest allowed to be tax deductible on principle residence until Lawson killed in in 1990?
But let those who paid 15% bleat about the headline figure which was only a few months before returning to 10% fool you.
Mortgage interest tax relief drastically reduced the effective Internet rate.
But let those who paid 15% bleat about the headline figure which was only a few months before returning to 10% fool you.
Mortgage interest tax relief drastically reduced the effective Internet rate.
sidicks said:
FredClogs said:
Why would the government need any money, we'd all be earning very close to six figures...
The gift that keeps on giving....FredClogs said:
...I earned over 6 figures for much of my late 20s and 30s, and I don't work particularly hard...
3rd division footballer?Cj
It's just spectacular. By redistributing everyones wages above 100k apparently we could bump everyone else up to 'close to 100k'. I guess whatever numbnuts does doesn't involve averages.
You've misunderstood the concept fblm, under the supposed proposed system the personal allowance would be £100k and income tax at 100% there after.
I'm not a football player but your pomposity and snobbery is clear, hey if being a footballist is so lucrative why don't you just work a bit harder and get a job at Bolton Wanderers?
fblm said:
sidicks said:
FredClogs said:
Why would the government need any money, we'd all be earning very close to six figures...
The gift that keeps on giving....FredClogs said:
...I earned over 6 figures for much of my late 20s and 30s, and I don't work particularly hard...
3rd division footballer?I'm not a football player but your pomposity and snobbery is clear, hey if being a footballist is so lucrative why don't you just work a bit harder and get a job at Bolton Wanderers?
FredClogs said:
I'm not a football player but your pomposity and snobbery is clear...
Sorry but given your evidently limited capacity for intelligent thought and propensity toward crass boasting about your income I thought footballer was a good guess. Anyway thanks Mr Six Figures its certainly the first time this lad from North Yorkshire has been called a pompous snob. Would it help if we all used smaller words?
plasticpig said:
survivalist said:
I think the point is that these are measures that have been (relatively) recently been introduced and are aimed at reducing benefits and increasing taxation on higher earners. Also the point at which they come into effect is rather arbitrary and arguably doesn't take account of the varying cost of living in different areas of the country or (especially in the case of Child Benefit) household income. What's interesting, other than people commenting on what they consider 'reasonable' and 'high' incomes is ultimately whether they influence people's behaviour in a negative way that affects us all.
An extreme example, but a single income household living earning 120k will take home almost exactly the same amount of net pay as a dual income household where each person earns £49,999. However the latter household will pay less than half the income tax and be eligible for child benefit. Personally I don't consider that fair, but appreciate the challenge in creating legislation that is.
There is no such thing as a fair tax system; as peoples idea of what is fair vary so wildly. One thing I would say is from a historical perspective income tax is actually quite low. In the 70's there were bands of up to 83% for normal income tax and up to 98% for some classes of investment income.An extreme example, but a single income household living earning 120k will take home almost exactly the same amount of net pay as a dual income household where each person earns £49,999. However the latter household will pay less than half the income tax and be eligible for child benefit. Personally I don't consider that fair, but appreciate the challenge in creating legislation that is.
The child benefit thing is really a bit of a red herring. The reasons behind the way it works has to do with deficiencies in the IT systems at HMRC and the DWP. Correcting those deficiencies would cost far more than the savings made from being able to take into account joint incomes in means testing child benefit.
survivalist said:
Which is why I said that I don't consider it fair. I would suggest, however, that with emotion removed most people would agree. Not sure the 1970's is a particularly relevant example given that historically it is seen as an era of excessively high taxation often linked to the 'brain drain' that saw an exodus of talent and high income earners to foreign shores. Interestingly the last 5 years have seen the highest exodus from Britain since the 1970s, with Britain seeing by far the highest out of the OECD counties.
Hardly surprisingAgain you cannot simply compare rates of tax. The Economist compared take home pay after all deductions and a married couple on £1 million had the lowest tax home pay of ALL the worlds major financial centres in the UK with the 50p top rate of tax and these were a hypothetical couple with no children and you still have child tax allowances under some jurisdictions, so for a couple with children the difference would be even more pronounced.
Further to my previous post in regard to historical comparisons and given that this is PHs. An employee earning under £8,500 (a decent amount in the 1970s) would pay NO car benefit if they had a company car(for comparison a £8,500 salary in 1975 would be worth £79K now)
Edited by JagLover on Thursday 28th January 20:18
FredClogs said:
RYH64E said:
FredClogs said:
If you're making £100k pcm then you can afford to pay tax, your "tax" is no more a penal than the guy paying 20% on his average salary.
Congrats on being considerably richer than me though, be a sport and do the right thing.
I paid about £200k in taxes last year, I think I've done my share and don't feel obliged to pay any more than the minimum I can get away with. Why don't you work a bit harder and contribute more yourself instead of asking others to pay even more than they already do?Congrats on being considerably richer than me though, be a sport and do the right thing.
And it's not £100k per month it's £100k this January, most months I get by on about half of that...
But you are a whole hunk of man obviously - can you lend me a tenner?
If RYH64E is running a successful business then he's likely employing a fair few people, meaning some families have breadwinners. Oh AND he's paying £200k in tax. £200k in tax.... feck me if you can't see that as a contribution then you're blind.
oyster said:
Why don't you blame the left wing government for setting such rules rather than the participants who are just trying to abide with them?
If RYH64E is running a successful business then he's likely employing a fair few people, meaning some families have breadwinners. Oh AND he's paying £200k in tax. £200k in tax.... feck me if you can't see that as a contribution then you're blind.
I'd wager too that the £200k is just corporation tax so Employers NI net VAT and then whenever he draws the cash dividend tax too. If RYH64E is running a successful business then he's likely employing a fair few people, meaning some families have breadwinners. Oh AND he's paying £200k in tax. £200k in tax.... feck me if you can't see that as a contribution then you're blind.
Oh and then I'd guess he enjoys a good standard of living spending cash therefore paying Vat and adding to other companies profits
Heck is want to be in a position where £200k tax is payable but if I was I'd not want to pay any more and if legally I could reduce that so be it (and if I do reduce it who's to say I don't give the saving direct to charity?
The £100-120k marginal tax rate is a disgrace, but it doesn't get talked about because people in this country are incapable of having a grown-up conversation about tax.
In Australia, things like fiscal drag (i.e. tax brackets not rising in line with inflation) are election topics. Mention fiscal drag over here and you'll be accused of "cutting taxes for the rich".
And there's no chance any of these marginal rates and other tax anomalies (i.e. Child benefit withdrawal) will disappear any time soon while the Conservative party are occupying the centre ground.
In Australia, things like fiscal drag (i.e. tax brackets not rising in line with inflation) are election topics. Mention fiscal drag over here and you'll be accused of "cutting taxes for the rich".
And there's no chance any of these marginal rates and other tax anomalies (i.e. Child benefit withdrawal) will disappear any time soon while the Conservative party are occupying the centre ground.
swamp said:
And there's no chance any of these marginal rates and other tax anomalies (i.e. Child benefit withdrawal) will disappear any time soon while the Conservative party are occupying the centre ground.
Centre ground? If they go any further left they'll be the New Labour party. My membership of the Conservatives probably won't be renewed.Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff