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Discussion in 'Politics, Religion, Social Issues' started by edesignuk, Apr 22, 2009.
What goodies do we all have in store for us?
When's the next election due by?
While they're probably going to push VAT higher than 17.5%, the last thing Gordon wants is to have Alistair damage Labour's re-election prospects even further.
The real crap will hit the fan after the next general election… no matter who wins.
I have adjusted my pants down at my ankles and I am bracing myself in a bent-over stance.
"Barring exceptional circumstances, it must be held on or before Thursday 3 June 2010."
Income tax will remain the same, but there will be a huge number of stealth taxes. Expect larger duties on alcohol (to make us healthier of course) and petrol (to help the environment), a cut in the current tax breaks for pension contributions (politicians and civil servants excepted as per usual) and a rise in VAT to 19% effective June 2010 rolleyes.
What they won't do is shelve all that expensive Home Office nonsense....
Assume The Position.
Hopefully a £2000 car scrappage scheme
more money for students please
At-a-glance: Budget 2009.
So far nothing in there that's going to seriously affect me, but I'll wait and see what changes they've made to dividend and corporation tax rates before saying anything more.
So basically he's done nothing.
The 50% tax rate is a red-herring; irrelevant to most, irrelevant to the budget (wow, he might get 1bn in, compared to his 175bn defecit).
All his figures look bad, even though he's basing next years growth on a figure the IMF think is unattainable.
The one thing he could have done to ease the defecit - cut public sector expenditure - he hasn't done, 'cos he doesn't want to affect their (slim) chances of getting back in.
Pretty pathetic. Even more pathetic to see the BBC/idiot media running the 50% tax as the main story too.
Not being from the UK...
So when this change is made, people making over $217,000 (US Dollars) in the UK will pay over 65% of their income to the government from income taxes and vat? Taxes nickel and dime people in America from every type of service (public and private). Would I be safe to assume in reality, "well-to-do" UK residents will pay, in some form of taxation, around 75% of their income in taxes?
50% is only charged on the income above the £150,000 boundary, not on all income if you happen to earn more than that amount. Income tax is on a graduated scale in the UK. I forget the exact boundaries as they change year to year, but it is roughly...
£6000 - tax free
Between £6000 and £40000 - charged at 20%
Between £40000 and £150000 - charged at 40%
Over £150000 - charged at 50%
Therefore if you earn £200000 a year as a salary*, you will pay roughly £75800 in tax, or 37.9% on your income (only £5000 a year more than you would have paid last week). There is also National Insurance contributions to take into account, but that changes depending on what pension arrangements you've made, has an absolute maximum of 11% between £6000 and £40000 and is only charged at 1% on all income above that.
VAT meanwhile is only charged on your purchases, and isn't applied universally on all items. Even if you do earn £200,000 a year, if you only spend £20,000 a year on VAT-rated items you will only pay £2608 in VAT for the year. They don't just take it off your income for no reason.
*The system is further complicated by different rates again being charged on dividend and savings income, which is levied at 10% between £6000 and £40000, then 32% on all income thereafter. So if the person earning £200,000 a year is receiving the majority of their money from dividends rather than salary they will pay even less in taxes overall.
To the media editors and journalists it's a big deal, due to so many of them being well above the £150k starting point. So it's a very clever piece of media manipulation from the Treasury to ensure what the big story will be. However, the vast majority of us couldn't care less. 2p a litre on petrol will affect us more.
Queso - if you earn over £100k, you loose £1 of that personal allowance for every £2 you earn. So that first £6k of 'tax free' earnings effectively moves to 40% (or 50%) tax, and represents another 2 or 3 grand to the government!
You also mentioned the fuel duty. It's worthwhile pointing out that fule tax currently runs at over 65% of the cost of fuel (and of course, you're spending your taxed income on that!).
Thanks. I missed that. However, even adding on another maximum £2400 brings the total well short of the 65%-75% being mentioned by the post above mine. I know that my numbers are far from exact, but then with every budget announcement the British tax system gets further complicated due to exemptions and special conditions rather than getting its long overdue and needed simplification. It would take a very long post to explain it properly (if anyone in the entire country can actually explain it properly anymore). I was just trying to illustrate that the system isn't a straight line percentage as people often misunderstand it as.
You may be
I have thus far studiously avoided any news on the budget. I didn't even read anything in this thread.
I'm pretending I'm on holiday. It feels good. I might have a pina collada or something.
So you guys pay 40% on a 40,000 salary, and then have to pay 17.5% VAT?
No. The bands are stepped. So you pay 40% on your income above that level, not on the entire income.
It's about 30% up to 40k (20% tax + National Insurance), and only hits 40% on the money you earn above 40k, but essentially you're right.
It sucks in a lot of ways, but I have to say that I'm really glad we don't have any health care insurance worries. I'd rather pay a little more tax than deal with all that braindamage.
Well my company pays for half of my health insurance, which is $420 a month total, so that 10% health care tax is about right, all said, I guess.
The VAT is what kills me. Our sales tax averages 5% in most states.
Yeah, but all prices here (at least in shops etc) are quoted inclusive of VAT so you don't actually notice how much it is. It always annoys me in the US when the price I see is not the price I pay!
Similarly here in the UK, employers also have to pay 10% of an employees salary to NI within the same lower-and-upper limit boundaries. The NI levy also pays for the majority of state pensions and benefits, so it's not just a healthcare payment.
Well we also pay 15% to Social Security, half of which gets paid by the employer.
And Medicare (not sure of the percentage).
It'd be interesting to see how it all works out if you distilled all the costs down.
We've got high taxes (the Tories won't be lowering them when they assume government next year) and massive spending cuts (even if Labour miraculously cling onto power) to look forward for decades to come.
May I offer my heartfelt congratulations to our MPs - past and present - for a job well done. Deserve every penny of their pay, expenses and pension, bless 'em.
It would. I am sure we pay a fair whack more in the UK but this is a "small" country standing up with the big boys all the frickin time, and that must take some big funding.