40p Tax band - history

Author
Discussion

Eric Mc

121,770 posts

264 months

Thursday 13th March 2014
quotequote all
And you would get the best politicians you could pay for.

simoid

19,772 posts

157 months

Thursday 13th March 2014
quotequote all
Gargamel said:
Agreed, you should get an additional vote per £25,000 you pay in tax
Instead of party donations?

smile

Harry H

3,379 posts

155 months

Thursday 13th March 2014
quotequote all
But all the Audi driving McMansion owners like paying their 40% tax.

Like their car and house it means they've arrived. Take it away and they're back in the working class category.

anonymous-user

53 months

Thursday 13th March 2014
quotequote all
Harry H said:
But all the Audi driving McMansion owners like paying their 40% tax.

Like their car and house it means they've arrived. Take it away and they're back in the working class category.
Bizarre comment

simoid

19,772 posts

157 months

Thursday 13th March 2014
quotequote all
fblm said:
Bizarre comment
Don't you think there is some prestige associated with paying a high rate of tax?

DonkeyApple

54,920 posts

168 months

Thursday 13th March 2014
quotequote all
'They are demanding tax cuts for the 800,000 middle-class professionals who have be dragged into the higher tax rate in the last three years as their wages have risen above the threshold for the 40p tax band. '

I'll bite: What is either middle class or professional about only just being in the higher tax bracket?

toppstuff

13,698 posts

246 months

Thursday 13th March 2014
quotequote all
simoid said:
fblm said:
Bizarre comment
Don't you think there is some prestige associated with paying a high rate of tax?
No.

Do you?

DonkeyApple

54,920 posts

168 months

Thursday 13th March 2014
quotequote all
simoid said:
fblm said:
Bizarre comment
Don't you think there is some prestige associated with paying a high rate of tax?
Not when your 'class' includes train drivers and various other blue collar workers. The 40p rate means nothing to anybody.

simoid

19,772 posts

157 months

Thursday 13th March 2014
quotequote all
toppstuff said:
simoid said:
fblm said:
Bizarre comment
Don't you think there is some prestige associated with paying a high rate of tax?
No.

Do you?
I think some people will think there is smile

Harry H

3,379 posts

155 months

Thursday 13th March 2014
quotequote all
DonkeyApple said:
Not when your 'class' includes train drivers and various other blue collar workers. The 40p rate means nothing to anybody.
Not so sure on that. Are people complaining about paying 40% tax in the pub really upset or are they saying "look how successful I am"

98elise

26,366 posts

160 months

Thursday 13th March 2014
quotequote all
Dr Jekyll said:
RYH64E said:
Dr Jekyll said:
I think the problem is that most of us don't include employers NI as part of our tax bill.
It isn't part of your tax bill, it's a tax on jobs paid by the employer for the privilege of employing people. If employers NI was scrapped tomorrow there would be no effect on employee salaries.
But it's included in the total NI take. So if you divide the total of income tax + NI by the number of people paying, you get a higher figure than you might expect.

And suggesting it's paid by the employer not the employee is splitting non existent hairs.
Agreed. Most employees forget that their tax and NI bill is also paid by their employer. The names given to the various taxes mean nothing, or who appears to pay it. All that matters is what the employer pays to you, and what the employer pays to the government for you being there.

BlackLabel

13,251 posts

122 months

Tuesday 13th May 2014
quotequote all
"Many middle-class professionals are paying an income tax rate of 60 per cent as a result of a little-understood policy introduced by the last Labour government which affects more than 500,000 people, a leading economist has warned.

The Institute for Fiscal Studies (IFS) said that it is "hard to make much sense" of a loophole in income tax rules which means that those earning between £100,000 and £120,000 now pay 60p of every pound they earn in tax.

The hidden tax rate is a third higher than the 45p top rate of tax which is widely believed to be the maximum raid on income.

 

Paul Johnson, the director of the IFS, said that there was "no plausible rationale" for the income tax system and accused Governments led by both main parties of introducing "poor tax policies".

"There is a basic rate of income tax of 20 per cent, a higher rate of 40 per cent and a top rate now of 45 per cent," he said. "What is less well known is that the last government introduced a rate of 60 per cent on a band of income starting at £100,000. This government has maintained it and effectively increased its range considerably. There is now a 60 per cent rate of income tax on income between £100,000 and £121,000 (where it drops back to 40 per cent). It’s hard to make much sense of that.""

http://www.telegraph.co.uk/finance/personalfinance...

SimonD

486 posts

280 months

Thursday 15th May 2014
quotequote all
I certainly don't earn over £100,000, but there are a few points of principle that I'd argue for, despite the fact that it would in theory cost me more... (in making up the shortfall)

No one should lose their personal allowance - irrespective of how much they earn, a personal allowance is supposed to have the basis of a representation of the basic cost to live a minimal existence. That principle should exist for someone earning £20,000 as it should for someone earning £2,000,000

No pound that anyone earns should ever be levied more than 50% in deductions from the government in direct taxation and NI. Again, why should you ever be paying more to the government in taxes for any work you do than you receive net yourself?

My father still works incredibly hard, and is 70 this year. He's worked for over 50 years, raised a family, paid £100,000s of taxes over the years, faced redundancy in his 50's (a hard time of life to have to deal with it) and has had to adapt to and learn an incredible changing amount of tax law and regulations in his job as a tax advisor. He earns twice what I do, which puts him well into 'that' bracket, but I don't begrudge him a penny of it. Yet for all this Brown decided that he should pay 60p in the pound for some of his earnings. It's a disgusting policy, and should be consigned to the history books.

simoid

19,772 posts

157 months

Thursday 15th May 2014
quotequote all
I do find it strange that someone on £200k has a lower marginal tax rate than someone on £100k. It could never be allowed to happen at £20k:£10k.

I suppose it's politically difficult to change as it's giving some rich people more money, even if it does seem equitable to do so.

Dr Jekyll

23,820 posts

260 months

Thursday 15th May 2014
quotequote all
simoid said:
I suppose it's politically difficult to change as it's giving some rich people more money, even if it does seem equitable to do so.
No it isn't. It's not taking as much off them as you were before, but still taking more than you take from everyone else.

oyster

12,577 posts

247 months

Thursday 15th May 2014
quotequote all
Dr Jekyll said:
simoid said:
I suppose it's politically difficult to change as it's giving some rich people more money, even if it does seem equitable to do so.
No it isn't. It's not taking as much off them as you were before, but still taking more than you take from everyone else.
OK clever clogs smile, how would YOU make the tax change and not allow the press and the Labour party to have an absolute field day about it?

I'm all ears.

oyster

12,577 posts

247 months

Thursday 15th May 2014
quotequote all
BlackLabel said:
"Many middle-class professionals are paying an income tax rate of 60 per cent as a result of a little-understood policy introduced by the last Labour government which affects more than 500,000 people, a leading economist has warned.

The Institute for Fiscal Studies (IFS) said that it is "hard to make much sense" of a loophole in income tax rules which means that those earning between £100,000 and £120,000 now pay 60p of every pound they earn in tax.

The hidden tax rate is a third higher than the 45p top rate of tax which is widely believed to be the maximum raid on income.

 

Paul Johnson, the director of the IFS, said that there was "no plausible rationale" for the income tax system and accused Governments led by both main parties of introducing "poor tax policies".

"There is a basic rate of income tax of 20 per cent, a higher rate of 40 per cent and a top rate now of 45 per cent," he said. "What is less well known is that the last government introduced a rate of 60 per cent on a band of income starting at £100,000. This government has maintained it and effectively increased its range considerably. There is now a 60 per cent rate of income tax on income between £100,000 and £121,000 (where it drops back to 40 per cent). It’s hard to make much sense of that.""

http://www.telegraph.co.uk/finance/personalfinance...
Is it really 'little-understood'?

simoid

19,772 posts

157 months

Thursday 15th May 2014
quotequote all
Dr Jekyll said:
simoid said:
I suppose it's politically difficult to change as it's giving some rich people more money, even if it does seem equitable to do so.
No it isn't. It's not taking as much off them as you were before, but still taking more than you take from everyone else.
-(-) = +

Dr Jekyll

23,820 posts

260 months

Thursday 15th May 2014
quotequote all
simoid said:
Dr Jekyll said:
simoid said:
I suppose it's politically difficult to change as it's giving some rich people more money, even if it does seem equitable to do so.
No it isn't. It's not taking as much off them as you were before, but still taking more than you take from everyone else.
-(-) = +
But taking £1000 off someone doesn't constitute giving them £500 just because you could in theory have taken £1500 instead.

simoid

19,772 posts

157 months

Thursday 15th May 2014
quotequote all
Dr Jekyll said:
simoid said:
Dr Jekyll said:
simoid said:
I suppose it's politically difficult to change as it's giving some rich people more money, even if it does seem equitable to do so.
No it isn't. It's not taking as much off them as you were before, but still taking more than you take from everyone else.
-(-) = +
But taking £1000 off someone doesn't constitute giving them £500 just because you could in theory have taken £1500 instead.
I should've used an "effectively" or "in the eyes of many" in my earlier post.

I apologise that you had to put your pedantry hat on smile