UK top earner tax to be cut

40% from 50%

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Re: UK top earner tax to be cut

#21  Postby mrjonno » Mar 16, 2012 1:07 pm

Reckon the Tories arent actually going to do this but leaking they will do this and then not doing means they listen to the people?
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Re: UK top earner tax to be cut

#22  Postby ED209 » Mar 16, 2012 1:09 pm

Yes, that's exactly what I reckon too. It's just too galling and obvious a handout to the very very wealthiest, such a blatant headline, I don't think the tories are actually that dumb. Keeping the 50% rate will be paraded around as evidence of the coalition taxing the wealthy, whereas the reality is the opposite. The 50% rate is not even a minor fart in the gale of the torydem's VAT increase, for example.
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Re: UK top earner tax to be cut

#23  Postby chairman bill » Mar 16, 2012 1:11 pm

Strontium Dog wrote:The only thing that seems to be trickling down on this forum is stupidity.
Feel free to trickle down somewhere else

... poorer paying less. This is an indisputable fact. Anyone stating otherwise is not dealing in facts and has a political axe to grind.
Actually, the really poor will not be paying less
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Re: UK top earner tax to be cut

#24  Postby mattthomas » Mar 16, 2012 1:12 pm

mrjonno wrote:Reckon the Tories arent actually going to do this but leaking they will do this and then not doing means they listen to the people?

Yep... they just happen to ignore everyone who tells them the health and social care bill should be scrapped
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Re: UK top earner tax to be cut

#25  Postby mrjonno » Mar 16, 2012 1:35 pm

Just remember if you are on minimum wage your number one priority is your tax allowance and tax band (that was being sarcastic for any Lib Dem's by the way), tax credits are what counts on low wages, not whether you are paying 20%, 18% etc on a tiny part of your tiny income)
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Re: UK top earner tax to be cut

#26  Postby chairman bill » Mar 16, 2012 1:49 pm

Indeed. And raising the tax threshold benefits everyone earning enough to pay tax. Those on really low wages don't earn that much, so tax breaks couhnt for sod all. A cut in VAT would help them more than a cut in income tax - they spend all they've got - yet some Tories are proposing an end to VAT exemptions on food FFS.
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Re: UK top earner tax to be cut

#27  Postby 95Theses » Mar 16, 2012 1:51 pm

Quiet you Trotskyite enemies of freedom.
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Re: UK top earner tax to be cut

#28  Postby DaveScriv » Mar 16, 2012 1:55 pm

Seems like a seriously bad move on all fronts to me, as it will only benefit very few people, including Conservative party supporters.
If he thinks the treasury can afford a tax cut which will help him politically with the middle classes he should have gone for an increase in the inheritance tax threshold. At the current £300,000 it hits a lot of very ordinary people, perhaps just a house in the London area, or a house plus a modest business premises (a shop or small factory) + house contents & business stock + some fairly ordinary savings. Hardly 'rich', and bearing in mind that those people have been taxed up to the eyeballs achieving such a legacy.
Osborne has said he'd like to see the theshold increased to a million. OK, so this wouldn't sound very PC in current circumstances, but a doubling of the theshold to £600,000 would still be well within the amounts which lots of people supporting all parties would consider quite normal for a person to reasonably pass on to their children and/or other relatives after a life of hard work (& taxes!).

BTW, I agree with Bill about a cut in VAT as also being something which would benefit everyone. Just saying, the inheritance threshold is too low as well.
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Re: UK top earner tax to be cut

#29  Postby Panderos » Mar 16, 2012 2:05 pm

What are the nature of the avoidance schemes used to get round the 50p tax rate?

Can they continue to be used when the rate is dropped down to 40p?

So much hot air around this issue and so few numbers.
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Re: UK top earner tax to be cut

#30  Postby Paul G » Mar 16, 2012 2:07 pm

You can't claim this will help business either, that's personal money after tax.
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Re: UK top earner tax to be cut

#31  Postby Panderos » Mar 16, 2012 2:15 pm

@Paul G
Well, it's always a bit more complicated who 'pays' tax. But yes, in a simple way, it doesn't affect businesses, nor entrepreneurs - who pay tax on dividends at 42.5%, if over £150,000, or 28% capital gains tax when they sell shares. This is really aimed at senior executives, bankers and a few other high earners as far as I can see. I'm sure I've heard even footballers tend to set up their own companies to avoid income tax.
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Re: UK top earner tax to be cut

#32  Postby Paul G » Mar 16, 2012 2:20 pm

Panderos wrote:@[color=#CC0000][b]Paul[/b][/color] G
Well, it's always a bit more complicated who 'pays' tax. But yes, in a simple way, it doesn't affect businesses, nor entrepreneurs - who pay tax on dividends at 42.5%, if over £150,000, or 28% capital gains tax when they sell shares. This is really aimed at senior executives, bankers and a few other high earners as far as I can see. I'm sure I've heard even footballers tend to set up their own companies to avoid income tax.


Which, at least when I was still working in the area, was being clamped down on pretty hard by the Inland Revenue. All those "companies" got the Paul G treatment 8-) . I'm just really unsure what the Tories are playing at.
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Re: UK top earner tax to be cut

#33  Postby I'm With Stupid » Mar 16, 2012 2:25 pm

DaveScriv wrote:BTW, I agree with Bill about a cut in VAT as also being something which would benefit everyone. Just saying, the inheritance threshold is too low as well.

Why? It's unearned income. Surely it's better to tax that than tax people's earnings?
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Re: UK top earner tax to be cut

#34  Postby ED209 » Mar 16, 2012 2:28 pm

Panderos wrote:What are the nature of the avoidance schemes used to get round the 50p tax rate?

Can they continue to be used when the rate is dropped down to 40p?

So much hot air around this issue and so few numbers.


Move yourself or your income out of the scope of UK tax eg Tina Green (Mrs Philip Green) who apparently is the real retail tycoon and has £bns in dividends accruing to UK operations paid to her in monaco or whatever it is she lives for at least six months of the year.

Convert your income to capital gains which the torydems will continue to tax at a lower rate than income because...erm...just because. Eg earn and retain your money in a series of ltd companies which you liquidate periodically taking the cash as capital distributions instead of income. All this hot air about increasing the income tax personal allowance, everyone already gets an additional ~£10k capital gains tax annual exempt amount which almost noone except the rich will ever be able to utilise or even be aware of.

All strategies will continue to be perfectly viable at 50% or 40% and remember the torydems are cutting HMRC staff and funding, something like 10,000 fewer tax inspectors to police adherence to it all.

I can only assume the discussion around the 50% rate is intended to be a diversion from the torydems raise of the regressive VAT, destruction of the NHS, slashing other services and benefits and whatever else they are about to announce that will disproportionately hammer the poor.
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Re: UK top earner tax to be cut

#35  Postby mrjonno » Mar 16, 2012 3:35 pm

chairman bill wrote:Indeed. And raising the tax threshold benefits everyone earning enough to pay tax. Those on really low wages don't earn that much, so tax breaks couhnt for sod all. A cut in VAT would help them more than a cut in income tax - they spend all they've got - yet some Tories are proposing an end to VAT exemptions on food FFS.


Not saying its an ideal system but when my wife was earning £13k she was getting nearly £7k in tax credit (benefits), trust me 'tax' was totally irrelevant to take home pain. Which is why the Lib Dem and to some extent the Tory obsession with tax levels just isnt that important in reality to people
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Re: UK top earner tax to be cut

#36  Postby Strontium Dog » Mar 16, 2012 4:53 pm

chairman bill wrote:Actually, the really poor will not be paying less


They will if they start to earn more. Nothing like incentives to get people off their arses. It's certainly a major departure from the policies of the last government, which incentivised people to sit around doing nothing.

ED209 wrote:I can only assume the discussion around the 50% rate is intended to be a diversion from the torydems raise of the regressive VAT


The VAT increase is progressive. But keep peddling untruths if it makes you feel better.
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Someone earning £1m pa will pay £381k more tax on their income under the coalition than under Labour
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Re: UK top earner tax to be cut

#37  Postby Blip » Mar 16, 2012 5:06 pm

I confess that I know little of economics so would be (sincerely) interested to learn how an increase in VAT is progressive taxation.
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Re: UK top earner tax to be cut

#38  Postby mattthomas » Mar 16, 2012 5:13 pm

Blip wrote:I confess that I know little of economics so would be (sincerely) interested to learn how an increase in VAT is progressive taxation.

Some call it progressive because EVERYONE has to buy "stuff" and "stuff" attracts VAT so EVERYONE pays VAT.

In practice though someone earning £10-20K is going to spend nearly all of their money on "stuff" that attracts VAT, whereas someone earning £100k+ is going to spend a small amount of their money on "stuff" that attracts VAT and save the rest for fattening themselves up financially.
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Re: UK top earner tax to be cut

#39  Postby ED209 » Mar 16, 2012 5:14 pm

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Re: UK top earner tax to be cut

#40  Postby Strontium Dog » Mar 16, 2012 5:16 pm

Blip wrote:I confess that I know little of economics so would be (sincerely) interested to learn how an increase in VAT is progressive taxation.


Always happy to oblige:

http://blogs.channel4.com/factcheck/fac ... e-tax/5438

There are two ways of looking at VAT, according to The Institute for Fiscal Studies (IFS): as a proportion of income, or expenditure. The IFS favours the latter, as it’s a better indication of long term household spending.

Over a lifetime, VAT will tend to be progressive because things that aren’t subject to the main rate of VAT are necessities that are consumed disproportionately by poorer households. And so increasing VAT on everything else will tend to hit the poor proportionately less, the IFS told FactCheck.

VAT is “slightly progressive”, the Institute’s senior research economist Stuart Adams said, “Particularly when you look at it over a lifetime.


I wouldn't hold your breath waiting for those arguing that VAT is regressive to support their assertions with evidence.
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