40p Tax band - history
Discussion
'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?
I'll bite: What is either middle class or professional about only just being in the higher tax bracket?
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. And suggesting it's paid by the employer not the employee is splitting non existent hairs.
"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...
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...
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.
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.
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.I'm all ears.
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'?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...
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.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.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.I apologise that you had to put your pedantry hat on
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