Oh, I love Caitlin Moran(109 Posts)
and her view on paying tax. It does kind of put it in perspective.
oh what a lot of bollocks.
The argument that people earning more should be happy to pay more tax is silly. They are already paying more tax. If there was a flat 20% tax rate, than someone earning £150k would already be paying six times more than somebody earning £30k.
And it's not about being happy to be rolling in it either, you might say 'I'm a successful banker and I make £200k a year, but actually I might be better off working 50 hours/week instead of 70 and then only get paid £150k/year, but not pay the 50% tax'.
And that would mean that rather than getting an extra £5k/year in tax, the government actually gets £20k less. And the schools'n'hospitals end up suffering.
People point out that high marginal tax rates deter people at the bottom, so they clearly will deter those at the top as well.
Yes, paying more tax because you've earned more must be nice, but no, paying an even larger PROPORTION of your income as tax is not nice.
Your 'six times more' argument is bollocks, guy. (It's 5 times more, is it not?)
20% is 20%. The richer person still has £120k. The poorer person has £24k. 20% off a small amount leaves a very small amount left over. 20% off a lrage amount still lives a jolly good chuck.
No, it's 6 times more, because they both get the same personal allowance (a bit more than £6k).
The £150k person would indeed be contributing six times as much.
You are looking at it the other way round - the rich person 'still has', as if the state is doing them a massive favour by not confiscating every last penny and making them live in penury.
Good article, well put Caitlin.
It surely can't come as any surprise that rich people aren't a bunch of altruistic, caring types though.
One doesn't get rich with that sort of attitude thanks very much.
Often those earning over £150k do so because they a) work very, very hard and b) in doing so create work/wealth for others.
A 50% tax rate does demotivate: each payrise, in return for very hard work and a significant impact on that person's home/family life, has less impact, and makes the sacrifices and pressure seem less worthwhile.
It also creates upwards pressure on salaries as in order to attract/retain talent, firms will have to give bigger payrises/bonuses, which seems to conflict with the message being sent to 'the City' at the moment.
I love her too
It is all very funny
And I agree, I get q kick out of the years I earn enough to pay tax (not many of them TBH....)
I think a lot of the reason people resent paying tax is they see a lot of wastage. I'd pay to see that fixed... oh that and MPs not squandering our cash on their duck houses.
I do love CM though, regardless of her arguments she does write a very funny piece!
"A 50% tax rate does demotivate: each payrise, in return for very hard work and a significant impact on that person's home/family life, has less impact, and makes the sacrifices and pressure seem less worthwhile.
One might equally come to the conclusion that poorly paid people doing grunt work jobs,(the type without which society could not function) for minimum wage would be equally demotivated too, no?
Oh and what Lenin said too.
You just made the same point I was trying to Lenin, a lot more succinctly.
Teach me to try and be be a smartarse!
making them live in penury - you do exaggerate
>One might equally come to the conclusion that poorly paid people doing grunt work jobs,(the type without which society could not function) for minimum wage would be equally demotivated too, no?
But nobody is proposing to tax them at 50%.... Minimum wage is about £11k/year, you'd pay about 15% on that, inclusive of NI, the marginal rate is 31%.
And as someone above rightly pointed out, someone on a low/average wage doesn't have all that much, before or after tax, so they aren't really in a position to make lifestyle decisions to earn less, whereas if you earn £200k you certainly can.
And of course at the £150k+ level, you have rather more choices - share options, 4-day weeks, emigrating, non-dom, tax avoidance schemes.
> Totally agree with Caitlin. I don't understand why some of the richest people in the world, and I include all those on £50k a year or more moan about tax. You have a fantastic life. Just pay it.
Why should they? Would you say that regardless of how much tax they paid? They may very well feel 'no, I'd rather not, thanks very much, I already pay tens of thousands in tax every year, I make my contribution already.'
And having lots of money does not mean you have a fantastic life at all, they might have a shit life, while the person working for minimum wage in the animal sancutary has a much richer and more enjoyable life. Obviously the rich bloke contributes more to pay for schools'n'hospitals, but that doesn't mean he's having a 'fantastic life'.
I remember when I was just below the 40% bracket, it was very galling to discover that my bonus wouldn't amount to nearly as much as I thought - not worth the effort.
PS. Re Ms. Moron, I wouldn't be surprised if she's saying one thing in public and doing another. Journalists, MPs and the like are notorious for this. Polly Toynbee sends her income through Personal Service Companies to reduce tax bills, and The Guardian is owned by a trust setup for tax avoidance purposes in 1932, and it actually got a £800k tax REBATE last year despite making £300 million in profit, something facilitated, inter alia, by Caymans Islands-based Special Purpose Vehicles. There are very very few companies or individuals who when faced with the reality of earning lots of money are happy to hand over great wads of it to the government. When Moron posts her tax returns online I'll take her more seriously.
PPS. The tax rate is actually worse just above £100k - 60%, or 61% on earned income - due to the removal of the personal allowance. I forgot that earlier - if income tax was flat at 20%, the £150k earner would actually pay 6.25 times more tax than the £30k earner.
People on the minimum wage don't pay tax 50% tax.
I don't disagree with the 40% tax rate. The point that it still leaves a much greater disposable income is correct.
But at 50%, it tips the balance, in a way I think demotivates - no-one goes to work for the hours required to command such a salary in order to see more than half of the extra remuneration swallowed up in taxes. I think 40% is enough, and if it were properly applied, then there wouldn't be a need for the extra revenue generated by the new rate.
And I am not saying that people in lower paid jobs don't work hard or aren't demotivated: but the fact is, if you are earning £5.85 an hour, you won't be generating work (and employment/wealth) for others. Whereas an accountant in a City firm earning £150k will have a team of 4 or 5 professionals working below him or her, will employ a secretary or two, will draw on the services of the broader firm and its employees in HR, IT etc. And the services s/he provides creates wealth for the firm's clients (or they wouldn't be paying), and so creates employment, profit etc (and so lots of taxpayers) elsewhere.
They earn a lot because they justify it, financially, and that means there's a lot of tax, in terms of money/profits made and employment generated, raised off their backs already. That's why I think it is not particularly sensible to tax at 50%. So I don't think people object to paying tax, I think they object to being over-taxed when they are making considerable personal sacrifices in generating a lot, economically, for 'society' already.
Why not raise stamp duty? Or the tax on luxury cars?
So basic summary of the last two posts - I earn lots of money, I don't want to pay any more tax on it.
Imagine - you might have to do your grocery shopping in Sainsbury's instead of Waitrose.
Oh, the HUMANITY!
Well no it's not quite like that actually. I'm very much motivated by tax and have adjusted the way I work to substantially reduce the amount I pay. I know quite a lot of people who avoid employment because of 40% tax, never mind 50%.
Once again, I think you underestimate the extent to which people resent paying tens of thousands per year in tax, and no, they don't feel they are being done a favour by being allowed to keep the rest, as so many posters have implied.
I like the assumption that because I think the 50% tax rate is based on flawed reasoning, I must be subject to it: no scope for a principled objection, just pure self-interest!
My point isn't 'I don't want to pay it'. It's the fact that there's a financial reality - whether it fits your ideas of what a job is 'worth' to society - that if you are paid over £150k, you are generating wealth for others, and lots of it. And from that wealth comes tax, employment, further wealth, more tax.
And someone working the hours required to command a large salary will be making personal sacrifices, and will be demotivated by the fact that half of any pay rise or bonus will be swallowed up before s/he and their family see any of it.
So demotivating those in the economy that create/generate vast amounts of the wealth doesn't seem particularly sensible. Especially when the money it will actually raise is pretty minimal.
A lot of people -especially in banking where I work - might earn a lot of money for a relative short period in their lives. Job security is frankly often shite and ageism is much more predominant than in most other sectors I believe.
Someone on this thread mentioned 50K a year. That is not a lot of money when you have to pay for childcare too.
I earn a lot of money and I quite happily pay my taxes. However, I also pay a lot of money not just in taxes, but also to the childcare sector (I have 4 children). I really object to what I feel is being taxed twice because my taxes don't seem to cover childcare. I still have to pay 1200 a month per child for nursery which is ridiculous. So my outgoings are more than enough and I do need to shop in Waitrose.
But you aren't paying tax twice, fairymum. Your outgoings wrt childcare are an artefact of the choices you have made with how to have them cared for while you are at work. If you had family around who were willing to take on the job, you'd be a lot better off. If you paid a nanny, you'd be a bit better off. It's not the state's job to make those arrangements for you!
Well - there you go then.
I am not at all motivated by tax, but then I will never be in the higher tax bracket so it's really not a dilemma I'm likely to face any time soon..or indeed ever
so why are you presuming that people on £150k or whatever will happily roll over and take it, or that they should, when it's not something that interests or affects you?
I wasn't motivated by tax when I wasn't in the higher tax bracket either btw.
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