Does anyone here pay 50p tax?

[Hatter The Mad]

Yeah but they can't afford to because the poorer you are, the higher your marginal propensity to consume. Despite this, poorer people tend to give a higher proportion of their income to charity despite giving a higher proportion of their income also.

That's nothing to do with conscience, by the way, but consideration of value and cost setting (a both a poor and rich person know what the value of a loaf of bread is). In the large part, most people consider transactions not as a proportion of their income but in fixed figures.

 

[Hatter The Mad]

I don't see why low earners should be penalised with regressive tax regimes such as a flat tax. I think anyone who wants to leave the UK because of the tax regime here should be free to do so, with the proviso that they don't earn any more money in the UK. Fair?

A flat tax isn't a penalty in any sense of the word - it is merely a default position (position zero). The only penalty (which is on higher earners) here is tax banding.

 

[Bear]

I don't see why low earners should be penalised with regressive tax regimes such as a flat tax.

Proponents of a flat tax system usually suggest a large personal allowance to go with it to take the poorest out of tax all together.

 

[cm1179]

Because it is a lot of money?

but you're earning a lot of money?

 

[Greebo]

The way I see it is as follows:

Once you get past the lowest earners, your tax inc NI is as follows:

32% then 42% and then 52% if you earn over £150k.

Now, the 52% band only really affects employees. Why? Most self employed people can do a lot to legally reduce their taxable income and get it below the 50% band. Al Fayed only paid £1m tax on his £10m UK earnings the other year so a net tax rate of only 10%.

Yes, the top 1% may well pay 24% of the tax revenues in this country, but not necessarily because they are paying 50% tax. Al Fayed's poultry 10% tax bill of £1m probably equates to 185 people's tax on average pay.

And in the past, it has been a whole lot worse for high earners

in 1974 it was 83% plus 15% for investments and dividends which could give you a maximum rate of 98%. In 1975 they were 750,000 people in the uk who fell into this top rate of tax.

It was only in 1988 that the top rate of tax was cut from 60% to 40%.

In fact, until the 50% rate came in, the top rate of tax at 40% had been the lowest since before world war 2.

And also I think that the top percentage earners now contribute more as a percentage in tax due to more low paid people not paying tax at all and despite the higher rate of tax being much less than the seventies and thresholds increasing above RPI, there are now 7 times as many people in the top bracket for tax.

 

[Nitefly]

Personally I don't have much of an issue with a 50% tax rate. That is a rather obscene amount of money to be earning and it is an additional 10p per pound earned only for income earned over £150k gross.

 

[easyrider]

Well what? You've told us how much you pay for petrol now tell us how much tax you pay.

don't earn enough to pay 50p tax

 

[Greebo]

Personally I don't have much of an issue with a 50% tax rate. That is a rather obscene amount of money to be earning and it is an additional 10p per pound earned only for income earned over £150k gross.

Agreed. Especially when they used to pay 98% tax.

My boss said his grandfather who employed 2000 people used to whinge and moan about only getting 2p left for every pound he earnt which is why he spent as much money as he could on Ferraris and Rolls Royces.

 

[scorza]

Proponents of a flat tax system usually suggest a large personal allowance to go with it to take the poorest out of tax all together.

So the burden is pushed onto middle income earners from higher income earners. I fail to see why middle income earners should be punished by such a tax system.

 

[Tunney]

I don't pay it but my girlfriend does. She whinges about it but it hasn't had any real impact on her lifestyle.

I think it's bonkers that the government are looking to scrap it because so many people avoid it. Surely the solution is to stop people avoiding it? I used to avoid doing my homework at school but none of the teachers scrapped homework!

 

[G-MAN2004]

but you're earning a lot of money?

Oh that makes it alright then...

Earning £500k a year still leaves you with around £250k which is a massive amount, but it's also a massive amount to give away. I'd be gutted.

 

[Nitefly]

Oh that makes it alright then...

Earning £500k a year still leaves you with around £250k which is a massive amount, but it's also a massive amount to give away. I'd be gutted.

Overall, it's far less burdensome to ask such a person to contribute that amount of tax than to gain it from those on the standard rate. It's not ideal for such a wealthy person, but they would still be taking home circa £20k a month, which is pretty much life on god mode.

 

[Greebo]

Oh that makes it alright then...

Earning £500k a year still leaves you with around £250k which is a massive amount, but it's also a massive amount to give away. I'd be gutted.

Overall, it's far less burdensome to ask such a person to contribute that amount of tax than to gain it from those on the standard rate. It's not ideal for such a wealthy person, but they would still be taking home circa £20k a month, which is pretty much life on god mode.

Got to agree with Nitefly here. Better to pay £250k in tax and be left with £250k rather than pay £5k in tax and be left with £20k per annum.

My boss has a similar reverse theory as well. He was explaining to one of the minimum wage workers the other day that them spending 50p was like him spending a quid. His reason was that they pretty much get most of their wages with little tax deducted whereas has he is a 50% tax payer so that same 50p was really a pound when it got paid to him before tax so everything he buys costs twice as much as to him so he has to be more careful with his money.

Personally, I think he's wrong. To somebody who earns £10,000, spending £100 of it is 1% of their wage and a lot of money. To somebody getting £100,000, it's only 0.1% and to them, it would be like spending only £10 to the lesser earner and hence wouldn't need much thinking about.

 

[cm1179]

Oh that makes it alright then...

Earning £500k a year still leaves you with around £250k which is a massive amount, but it's also a massive amount to give away. I'd be gutted.

so instead of thinking 'wahey' i earned £250k last year. you'd be thinking 'gutted' i gave away £250k last year to her majesty.

i was always told to be in such a position is a privelage.

 

[cm1179]

don't earn enough to pay 50p tax

do you know how much the beatles were paying and why the wrote 'tax man'? of course, if you were a true beatles fan, you wouldn't need to look it up....

 

[realBabelfish]

Really ? everyone in that bracket has different circumstances and there are a myriad of reasons for how they've got there.

As for helping society that's not a tax payers burden to the point of paying 50% which is ridiculous, I don't care how anyone tries to spin it and if someone like my Dad is doing a poor job of helping society how about the rest of the country ?

After being cleaned dry of over 50% of your earnings any further charity will not occur at least in my household.

Just to add my Father worked his way to the top (in my lifetime)

but the fact is that EVERYBODY cant do that. your dad also paid 50% for what? a couple of years... it hasnt been around for very long. im sure he is happier than the majority of people who work hard and have to live on minimum wage or average wage

would you prefer the poor to pay more than the rich? they already do, proportionally.

 

[realBabelfish]

@"Originally Posted by robgmun
People should get a grip and not expect others to pay there way for them, and to also understand the rich get rich because they picked themselves up and worked there bloody ass off, or have the intelligence to get where they are. There's a lot of jealously in this thread"

or, they inherited it. got it because of who they know (not how good at the job they are). there are plenty of toffs on the old boys network

 

[Hatter The Mad]

I don't understand why people cannot see why you'd feel hard done by if you had to wrtie a cheque for 40+% of your income to the exchequer.

I feel hard done by when I need to write a cheque for what is 34% of all my income (my marginal rate) right now. I'm absolutely sure someone would feel more bent over when they have to write one for > 40%.

but the fact is that EVERYBODY cant do that. your dad also paid 50% for what? a couple of years... it hasnt been around for very long. im sure he is happier than the majority of people who work hard and have to live on minimum wage or average wage

Not just that, but high paying jobs tend to be demanding high-risk and high-stress jobs (less stability, lots of exposure).

People like that therefore tend to live within their means (maybe that means two homes, hiring domestic help to facilitate working 14 hours a day, child care, lifestyle expenses which might be implicitly required by one's work and network).

So it isn't about 'oh I'm so lucky to be earning £200k here please take £80k of it I'm still happy because my mortgage is £600 a month and thats my biggest expense'. It is (in most cases) more like 'I work so hard for this and have sacrificed a lot. I spent my life making myself an invaluable asset, and now I'm handing over 40% of that. Stings.'

 

[D.P.]

Fairish, depends on their tax residency status really.

Another fact to consider is that as a person earns more not only do they pay more in via the tax regime they also take less out as they are more likely to fund things privately, for example personal healthcare.

And they are also more likely to buy lots of expensive things (cars, Ts, computers, furniture, gadgets) paying lots of VAT on them, and hire people like cleaners, gardeners, DIY, window cleaners.

 

[Hatter The Mad]

do you know how much the beatles were paying and why the wrote 'tax man'? of course, if you were a true beatles fan, you wouldn't need to look it up....

95%, which stifled the economy, didn't it?