Does anyone here pay 50p tax?

PMKeates · 18 Mar 2012 at 13:31

Floogie said:
What does an increased personal tax rate have to do with business investment?

Increased personal tax rate reduces the availability of highly skilled individuals that command the higher salaries in the higher tax bands. Additionally, those with high incomes and as a result high wealth, are far more likely to be in a position to invest 'locally' (i.e. in the same City or nation) than those that are not.

Floogie · 18 Mar 2012 at 13:40

PMKeates said:
Increased personal tax rate reduces the availability of highly skilled individuals that command the higher salaries in that higher tax band. Additionally, those with high incomes and as a result high wealth, are far more likely to be in a position to invest 'locally' (i.e. in the same City or nation) than those that are not.

Most people in the 50% bracket are primarily employees within the finiancial services such as speculators and other financial execs. These aren't necessarily highly-skilled individuals (unless one sees gambling with other peoples money as a skill) and not wealth creators or entrepreneurs. So I don't buy it.

cm1179 · 18 Mar 2012 at 13:49

if you earn £500k P/A the tax doesn't cut it to £250k. i believe it works in increaments? my dad explained it to me when i was younger and said something like you'd only pay 50% on anything over a certain amount. ie if you're on £500k P/A you'd only get taxed @ 50% on anything over eg £300k so up until £300k you're being taxed @ 40% and down

Saundie · 18 Mar 2012 at 13:51

Jokester said:
When the highly affluent pay disproportionately more tax into the system than everyone else, everyone should care about it.

Why? It's absolutely fine for them to pay more. It's not as though they're being forced into poverty as a result of the additional tax burden.

Jokester · 18 Mar 2012 at 13:53

Saundie said:
Why? It's absolutely fine for them to pay more. It's not as though they're being forced into poverty as a result of the additional tax burden.

Because the rich are also the most mobile, so taxing them more encourages them to look at how to best manage their tax liabilities and also whether they would get a better deal in another country...

BunnyKillBot · 18 Mar 2012 at 13:54

Floogie said:
Most people in the 50% bracket are primarily employees within the finiancial services such as speculators and other financial execs.

Or in the oil, gas and energy services

Jokester · 18 Mar 2012 at 13:57

BunnyKillBot said:
Or in the oil, gas and energy services

Most of the high earners in the oil and gas industry don't even pay the 40% income tax rate.

Bear · 18 Mar 2012 at 13:58

PMKeates said:
Is your question whether if I had a choice to pay tax or not, even if I knew my tax was paying for public services, would I pay? If that's the question, I wouldn't hand over a penny.

So in that sense then you do begrudge paying that tax, its just that you have resigned to the fact that you have to pay it so you live with it.

Saundie · 18 Mar 2012 at 14:00

Jokester said:
Because the rich are also the most mobile, so taxing them more encourages them to look at how to best manage their tax liabilities and also whether they would get a better deal in another country...

I would hope that nobody would be so "greedy" as to think to themselves; "my life would be greatly enhanced if I wasn't paying 50% tax on my earnings above £150k. I need that extra money in order to be happy. I think it's time to get out of this socialist hellhole". Yes, I am using hyperbole (and the loaded term "greedy"), but the notion seems utterly ridiculous. Is my view of how these thing should work really that unreasonable?

Freakbro · 18 Mar 2012 at 14:01

Jokester said:
Because the rich are also the most mobile, so taxing them more encourages them to look at how to best manage their tax liabilities and also whether they would get a better deal in another country...

We are talking about people who earn this money through PAYE, who then don't generally have the mobility or ability to use different countries tax legislations to reduce their burden.

PMKeates · 18 Mar 2012 at 14:02

Floogie said:
Most people in the 50% bracket are primarily employees within the finiancial services such as speculators and other financial execs. These aren't necessarily highly-skilled individuals (unless one sees gambling with other peoples money as a skill) and not wealth creators or entrepreneurs. So I don't buy it.

There aren't too many people in the 50% bracket because a lot of wealthy individuals find ways to avoid crushingly high tax rates, whether that be through layers of companies or offshore organisations or whatever. If you want to encourage that even more, creating penalising higher tax rates is one way to do it. If you make that avoidance particularly difficult, then people will go do things elsewhere. If people go, companies go, and if companies go, industries go.

Financial services has to offer sky-high pay and bonuses because they need the very best people to be able to compete; they aren't trying to beat Fred's Financials down the road, they are trying to be better than everybody else everywhere else in the world. If they cannot attract excellent people on the gobal scale because of the higher tax rates, then something like London's financial services industry has little reason to be there - a whizz trader who is offered twice as much after tax on Wall Street will move, and take all that tax haul and spend with him. If all the good people are in Wall Street or Frankfurt, why would you invest in the City?

Bear · 18 Mar 2012 at 14:03

Freakbro said:
Of course I have a choice to like it or not, that is what we are talking about I have no choice whether it is taken or not, but its up to me whether it bothers me or not, which it doesnt.

A lot of my income is from self employment, so I do have an effect on this but still only claim what I am eligible for and pay my dues on the rest.

Sorry I worded my post poorly.

My income comes via contracting though a Ltd company and your second sentance sounds like a polite way of saying tax avoidance. Im not saying you are, just the way you said it seems to imply it.

Freakbro · 18 Mar 2012 at 14:05

Bear said:
Sorry I worded my post poorly.

My income comes via contracting though a Ltd company and your second sentance sounds like a polite way of saying tax avoidance. Im not saying you are, just the way you said it seems to imply it.

I must have badly worded it then, as I was trying to say the exact opposite!

bear said:
The telling thing would be given the choice to avoid paying the tax or not then would the people saying they dont care about paying the tax take the avoidance route or not.

Due respect to the people that wont.

I'll take that respect now then

PMKeates · 18 Mar 2012 at 14:05

Bear said:
So in that sense then you do begrudge paying that tax, its just that you have resigned to the fact that you have to pay it so you live with it.

I think you'll find in my post I said "and while I do begrudge it, I'm not exactly staging protests". There is a difference between begrudging paying, which I do as I don't think the money I give in taxes is spent as wisely or as carefully as the money I receive as income, and caring enough to do something about it. My income is not high enough that the negatives of relocating are worth the saving in goods and services terms.

Tefal · 18 Mar 2012 at 14:09

Hatter The Mad said:
Before the 50p tax rate, I understand that the top one percent of earners accounted for 26-27% of the entire income tax take.

I wonder how the proportions changed since the introduction of the 50p rate - anyone know?

fun graph (from before the 50p bracket iirc)

http://news.bbc.co.uk/1/hi/8417205.stm

seems a bit harsh when people say the rich don't pay their way when the top 10% pay over 50% of the total income tax...

Jokester · 18 Mar 2012 at 14:17

Saundie said:
I would hope that nobody would be so "greedy" as to think to themselves; "my life would be greatly enhanced if I wasn't paying 50% tax on my earnings above £150k. I need that extra money in order to be happy. I think it's time to get out of this socialist hellhole". Yes, I am using hyperbole (and the loaded term "greedy"), but the notion seems utterly ridiculous. Is my view of how these thing should work really that unreasonable?

The UK has the 3rd highest income tax in the world for people over £150k. Is it the rich that are being greedy or those who aren't rich that are demanding that it stays?

Freakbro said:
We are talking about people who earn this money through PAYE, who then don't generally have the mobility or ability to use different countries tax legislations to reduce their burden.

Pushing salary taxes even higher can encourage them to look at other means. I used to be PAYE...

Bear · 18 Mar 2012 at 14:19

Freakbro said:
I'll take that respect now then

Fair enough, you are a bigger person than most, as I suspect the vast majority of people would pay less tax if they could and Im not just talking about the wealthy.

Bear · 18 Mar 2012 at 14:20

Jokester said:
Is it the rich that are being greedy or those who aren't rich that are demanding that it stays?

It does smack of biting the hand that feeds you to a certain extent.

sigma · 18 Mar 2012 at 14:30

Surely we should provide an incentive to get people to want to earn more.

Slapping another 10% on tax for high earning people is not going to do this.

Funny how people complain about rich people being greedy which in reality the majority of people are greedy, regardless of how much they earn.

Saundie · 18 Mar 2012 at 14:40

Edit: actually, it was wrong of me to direct this at any one person.