UK brings in a new 50% tax rate for top earners

Discussion in 'Politics, Religion, Social Issues' started by Cromulent, Apr 22, 2009.

  1. Cromulent macrumors 603

    Cromulent

    Joined:
    Oct 2, 2006
    Location:
    The Land of Hope and Glory
    #1
    http://news.bbc.co.uk/1/hi/uk_politics/8011321.stm

    Interesting news. I always thought we would need to do something to claw back some money after the ridiculous amount of public spending that we have been doing recently.

    While the tax rate does not effect me I would be hurting if I was in the that tax bracket.

    Also a 3.5% shrinkage in the economy is pretty dire. Interesting times lay ahead I think.
     
  2. edesignuk Moderator emeritus

    edesignuk

    Joined:
    Mar 25, 2002
    Location:
    London, England
    #2
    The day I'm making any where close to that I'll worry. Think I'm "safe" for a good while yet though :(

    They can just sting me in many other weird, complicated and stealthy ways :rolleyes:
     
  3. OllyW Moderator

    OllyW

    Staff Member

    Joined:
    Oct 11, 2005
    Location:
    The Black Country, England
    #3
    I would love to pay that tax rate. ;)
     
  4. AdeFowler macrumors 68020

    AdeFowler

    Joined:
    Aug 27, 2004
    Location:
    England
    #4
    +1. It is a hell of a lot of your earnings to give away though.
     
  5. edesignuk Moderator emeritus

    edesignuk

    Joined:
    Mar 25, 2002
    Location:
    London, England
    #5
    Won't the 50% only be for the amount you earn over the £150k?
     
  6. OllyW Moderator

    OllyW

    Staff Member

    Joined:
    Oct 11, 2005
    Location:
    The Black Country, England
    #6
    Yes.
     
  7. sammich macrumors 601

    sammich

    Joined:
    Sep 26, 2006
    Location:
    Sarcasmville.
    #7
    Why should the rich bother to donate to a charity, they're being forced to do it already.
     
  8. iBlue macrumors Core

    iBlue

    Joined:
    Mar 17, 2005
    Location:
    London, England
    #8
    That's not charity, that's the government taking what they want from where they want it. Poor folk are getting poorer, I'm sure the gov is a bit worried about their wells drying up draining it from the ever-diminishing middle class.
     
  9. iBecks macrumors 6502

    Joined:
    Nov 24, 2006
    Location:
    Nottingham, UK
    #9
    £150,000 a year is approx.

    Per month

    £12,500 Gross
    - £2,600 Tax
    - £1,300 National Insurance

    £8600 Nett pay


    Therefore anything above £12,500 per month will be taxed at 50%
     
  10. robbieduncan Moderator emeritus

    robbieduncan

    Joined:
    Jul 24, 2002
    Location:
    London
    #10
    It's not just a 50% rate though. They also loose their personal tax allowance (the bit of income on which you pay 0% tax) and have had the tax relief on pension contributions reduced too.

    The pension contributions thing is really pretty shocking. I understand that this may have been used to effectively reduce the amount of tax paid (as you can make pension contributions using your gross income thus reducing your taxable income) but the government keeps going on about us paying for our own pensions then does this.

    If I was in this tax band I'd be seriously looking at ways to get out of it if it was close or simply leaving the country.
     
  11. .Andy macrumors 68030

    .Andy

    Joined:
    Jul 18, 2004
    Location:
    The Mergui Archipelago
    #11
    Toast and beans for dinner again.
     
  12. sammich macrumors 601

    sammich

    Joined:
    Sep 26, 2006
    Location:
    Sarcasmville.
    #12
    I understand the economics and rationale, everyone in society will play their part, but would really suck to be wealthy, I mean you probably worked really hard, but most of your effort goes back to the government. So, yes, in these times the government is making sure your success has somewhere to succeed in the future, but in the good times, you are basically subsiding a good portion of people who refuse to contribute to society.

    (sorry for the rant, my parents are business people and as their income falls, the bills go up because, the bureaucrats income is falling too).
     
  13. robbieduncan Moderator emeritus

    robbieduncan

    Joined:
    Jul 24, 2002
    Location:
    London
    #13
    Just to point out what the loss of the personal allowance will mean. If you are successful enough (there is no way I'm going to say lucky enough) to be earning £150001 then your total deductions (tax+NI) before today assuming no pension contributions would have been £55,532.56. Now after today you will have to pay an additional £6,035.00 due to the loss of your personal allowance. So that takes your effective tax rate to 41.45% from 37.02%.

    This does not take into account the extra few pence you have to pay for the £1 that is now in the 50% tax band. It gets even worse if you were a prudent person and had been contributing to a personal pension plan...

    Now does it really seem right to be expecting people to pay over 40% on their entire income?
     
  14. Cromulent thread starter macrumors 603

    Cromulent

    Joined:
    Oct 2, 2006
    Location:
    The Land of Hope and Glory
    #14
    Denmark or Sweden I think have a 60% upper tax bracket, but then they have one of the best living standards in the world.

    It's a tough question, do we go the American route of lower taxation but a worse social system (or rather an abhorrent social system) or do we go the Scandinavian route of higher taxation but a really excellent social system?

    Personally I would lean towards the Scandinavian system myself.
     
  15. robbieduncan Moderator emeritus

    robbieduncan

    Joined:
    Jul 24, 2002
    Location:
    London
    #15
    Yet somehow in Scandinavia they don't seem to have the hoards that we have who are content to live off the state for their entire lives and pass on the same values to their children (of which they seem to have lots).
     
  16. Cromulent thread starter macrumors 603

    Cromulent

    Joined:
    Oct 2, 2006
    Location:
    The Land of Hope and Glory
    #16
    I think that is partly because this country has lost any concept of self respect (as a nation).
     
  17. iBlue macrumors Core

    iBlue

    Joined:
    Mar 17, 2005
    Location:
    London, England
    #17
    I completely see your point Robbie and I think it's crappy too. However, the government was going to take its money from somewhere and it doesn't surprise or horrify me TOO much that they're taking it more so from the higher end.

    I think they (big bad gov) take ENTIRELY TOO MUCH. I think they need to look more carefully at all their BS spending and budget like that instead of ripping everyone in the UK off more and more. That's just apparently too much to ask of them. They just take more and more. :rolleyes:

    V for Vendetta anyone?
     
  18. .Andy macrumors 68030

    .Andy

    Joined:
    Jul 18, 2004
    Location:
    The Mergui Archipelago
    #18
    Having a lower percentage in the highest tax bracket won't change that though. However spending tax dollars more wisely on education and job incentives will change that. It seems the latter is what you really want to achieve.
     
  19. notjustjay macrumors 603

    notjustjay

    Joined:
    Sep 19, 2003
    Location:
    Canada, eh?
    #19
    Meanwhile, the Canadians are thinking, "Hey, that's pretty good!" :p
     
  20. robbieduncan Moderator emeritus

    robbieduncan

    Joined:
    Jul 24, 2002
    Location:
    London
    #20
    Most of these sorts of people choose to mess around in school, see qualifications as "uncool" and generally waste the opportunities given to them. I fail to see how spending more in education will help that.

    With respect to jobs I still remember the TV program shown last year where some of these sorts of people were stopped outside the Job Centre in Peterbourgh. The interviewer said he had a job they could start tomorrow. When he told them it was picking cabbages they laughed in his face and said they were happy claiming dole money as it was free money and they could sit at home playing on their playstations. Again I fail to see how this can be altered without making claiming the dole less attractive.
     
  21. iJohnHenry macrumors P6

    iJohnHenry

    Joined:
    Mar 22, 2008
    Location:
    On tenterhooks
    #21
    The poor cheer, and the rich boo.

    At what point do we just declare a return to the feudal system??
     
  22. .Andy macrumors 68030

    .Andy

    Joined:
    Jul 18, 2004
    Location:
    The Mergui Archipelago
    #22
    I said more wisely. Not more. How it's something that will be achieved is beyond me. It's not my expertise but it's what is needed to get people out of the poverty trap. However spending less money isn't likely to achieve a suitable outcome. Nor is cutting taxes on the most rich.

    Best not to shape your societal views based on television programs.
     
  23. trule macrumors 6502

    Joined:
    Mar 16, 2007
    #23
    Its the power to tax that is behind the ability of the Government to issue new debt. This is the UK Governments way of telling the markets that they are good for the money and its safe to turn up at the next Gilts auction.

    It would be quite reasonable to say the the UK Government is close to bankrupt if it has anymore bond auction failures. OK, they can QE their way along but the Pound will collapse in the process.
     
  24. robbieduncan Moderator emeritus

    robbieduncan

    Joined:
    Jul 24, 2002
    Location:
    London
    #24
    This was just posted elsewhere. I'm sure it's been seen by many before, but I feel it's relevant and illustrates where this is all going so here we go (allegedly the numbers work out pretty well for the UK too with the 10 men representing the tax paying public at large):

    Suppose that every day, ten men go out for beer and the bill for all ten comes to £100.

    If they paid their bill the way we pay our taxes, it would go something like this:

    The first four men (the poorest) would pay nothing.
    The fifth would pay £1.
    The sixth would pay £3.
    The seventh would pay £7.
    The eighth would pay £12.
    The ninth would pay £18.
    The tenth man (the richest) would pay £59.

    So, that's what they decided to do.

    The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve.

    'Since you are all such good customers,' he said, 'I'm going to reduce the cost of your daily beers by £20.

    Drinks for the ten now cost just £80.'The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers?

    How could they divide the £20 windfall so that everyone would get his 'fair share?'

    They realized that £20 divided by six is £3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.

    So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so:

    The fifth man, like the first four, now paid nothing (100% savings).
    The sixth now paid £2 instead of £3 (33%savings).
    The seventh now pay £5 instead of £7 (28%savings).
    The eighth now paid £9 instead of £12 (25% savings).
    The ninth now paid £14 instead of £18 (22% savings).
    The tenth now paid £49 instead of £59 (16% savings).

    Each of the six was better off than before and the first four continued to drink for free, but once outside the restaurant, the men began to compare their savings.

    "I only got a pound out of the £20," declared the sixth man. He pointed to the tenth man, "but he got £10!"
    "Yeah, that's right," exclaimed the fifth man. "I only saved a pound, too. It's unfair that he got TEN times more than I!"
    "That's true!!" shouted the seventh man. "Why should he get £10 back when I got only two? The wealthy get all the breaks!"

    "Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

    The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something very important....

    they didn't have enough money between all of them for even half of the bill!And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
     
  25. j26 macrumors 65832

    j26

    Joined:
    Mar 30, 2005
    Location:
    Paddyland
    #25
    Ah, yer pussies in the UK

    I'm on
    41% income Tax
    4% Health Levy
    2% Income Levy (allegedly temporary)
    10.5% Pension Levy
    4% National Insurance

    Being a grand total of 62.5% - and my income is WAY less than 150k (and social services are buggered)
     

Share This Page