Can we talk about £100-120k marginal tax rate
Discussion
Who created this quirk where you pay the highest marginal rate of tax of all?
What should someone earning in this range pay more marginal tax than someone on double the salary.
Why is the starting point not increasing at all since its inception?
Why was £100k selected as the starting point?
Why not instead reverse it entirely and give the income tax free level to all but lower the 45% starting point to balance off the tax lost.
What should someone earning in this range pay more marginal tax than someone on double the salary.
Why is the starting point not increasing at all since its inception?
Why was £100k selected as the starting point?
Why not instead reverse it entirely and give the income tax free level to all but lower the 45% starting point to balance off the tax lost.
It sucks doesn't it. Costs us £500 a month take home.
And just to add insult to injury, every time they raise the tax free allowance (whilst lauding how they are the "low tax government") you end up with a 40% tax rise on whatever they raised it by!
When my local conservative councilor visited during the last election I told him that they wont be getting my vote whilst they support a 62% marginal tax rate. His response "Well whats the alternative for you?".
I have also written to my MP (Mel Stride - chief whip to the treasury) several times to see why he thinks this rate of marginal tax is a good idea, but he cant be arsed to reply. Funny that.
And just to add insult to injury, every time they raise the tax free allowance (whilst lauding how they are the "low tax government") you end up with a 40% tax rise on whatever they raised it by!
When my local conservative councilor visited during the last election I told him that they wont be getting my vote whilst they support a 62% marginal tax rate. His response "Well whats the alternative for you?".
I have also written to my MP (Mel Stride - chief whip to the treasury) several times to see why he thinks this rate of marginal tax is a good idea, but he cant be arsed to reply. Funny that.
Edited by anonymous-user on Thursday 28th January 09:33
Welshbeef said:
Who created this quirk where you pay the highest marginal rate of tax of all?
What should someone earning in this range pay more marginal tax than someone on double the salary.
Why is the starting point not increasing at all since its inception?
Why was £100k selected as the starting point?
Why not instead reverse it entirely and give the income tax free level to all but lower the 45% starting point to balance off the tax lost.
People earning more than £120k still pay that marginal rate of tax on their earnings within the £100k-£120k band!What should someone earning in this range pay more marginal tax than someone on double the salary.
Why is the starting point not increasing at all since its inception?
Why was £100k selected as the starting point?
Why not instead reverse it entirely and give the income tax free level to all but lower the 45% starting point to balance off the tax lost.
Sidekick... No they don't!
Between 100 and 120k you pay40% tax plus lose your personal allowance progressively. This means u pay 62% marginal tax. Once above 120k you are back to 40% until you hit the 45%.
And payrises or bonus whilst in this zone are hard to get excited about when 62% goes immediately.
Also makes tax codes a fiasco as slight variations in income have large effect on what your tax code should be.
Between 100 and 120k you pay40% tax plus lose your personal allowance progressively. This means u pay 62% marginal tax. Once above 120k you are back to 40% until you hit the 45%.
And payrises or bonus whilst in this zone are hard to get excited about when 62% goes immediately.
Also makes tax codes a fiasco as slight variations in income have large effect on what your tax code should be.
hantsxlg said:
Sidekick... No they don't!
I think you're getting confused between marginal rate and actual rate!Someone earning £140k still incurs exactly the same tax on earning between £100k and £120k as someone earning £120k. It's just that earnings beyond that point go back to the 'normal' marginal rate.
hantsxlg said:
Between 100 and 120k you pay40% tax plus lose your personal allowance progressively. This means u pay 62% marginal tax. Once above 120k you are back to 40% until you hit the 45%.
Someone earning over £120k still loses their tax free allowance in exactly the same way and incurs the same tax rate on earnings within that band!Edited by sidicks on Thursday 28th January 11:19
BRR said:
How come the personal allowance is only lost between 100 & 120k? that seems crazy.
It isn't!BRR said:
I presume the marginal rate is only applied on earnings between that amount so if you earn £140k you'd still pay the marginal amount on 20k of that or do you miss it out all together?
See above!Welshbeef said:
But the response is why is someone earning £110k penalised more for every £1they earn then someone on £160k?
Between £100k and £120k they are penalised exactly the same!You could equally ask why is someone earning more than £100k not entitled to a personal allowance when they are paying high marginal rates anyway!
I'm fundamentally opposed to a higher tax rate for those earning over certain bands. I think there should be one rate with exemptions or allowances for certain groups.
GO was even in favour in 2005 although we had financial heavyweights like Gordon Brown criticising it .. "The millionaire to pay exactly the same tax rate as the young nurse"
GO was even in favour in 2005 although we had financial heavyweights like Gordon Brown criticising it .. "The millionaire to pay exactly the same tax rate as the young nurse"
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff