50% tax rate - unexpected consequence

There's no doubt in my mind that hiking tax is a disincentive and that ultimately the tax take will reduce. But it seems that the increase in tax was not introduced to make a practical difference, more to make a point.

That's fine, but if the net result is less tax take then what? Is it still work making the political point?

My dad's in this position. He's a GP in his mid 60s and really should be thinking of retiring. He won't because his health is relatively good and he's happy to work for a bit longer. But it really isn't worth his while to work so hard (lots of evenings and he used to do weekends) when he takes home so little of it. If he were forced to do the out of hours shifts, I suspect he would give up entirely. He's just not at an age where he really wants to be working 60+ hours a week, and I have to say I don't blame him.

gaelicsheep - quite. Not suggesting that GPs are expected to work overtime for nothing but that their contracts should include evening and weekend shifts on a rota basis. Plenty of other jobs include clauses about evening and weekend work - but nobody complains about that. If the service requires these GP to work some evenings and weekends then IMO they should be. Those who could not manage that could work mon - fri on a lower wage, so the OOH component would be extra.

It's all very well to critcise GP pay levels, but 40 years ago solictor and doctor pay was about the same. Over time doctors pay was gradually eroded - the new contracts which were written 5/6 years ago restored some of that loss. Personally I want the very best people in the medical profession in this country and don't object to a penny that they get paid.

When the GP contract was re-written, the governement went to GPs and said that for £6k a year per GP, they could opt out of OOH. At the time they told the goverenment that that wasn't enough money and that they wouldn't be able to provide a service for that much, but they didn't listen.

Gaelicsheep - GPs are not employed, they are self employed. It is already hard enough to recruit into general practice in a lot of inner city/deprived areas where use of the service is high, without making it any less attractive.

They don't get paid 150K for a 40-hour week so, yes, could drop some of the services provided for more quality time at home with their family, golf, whatever. You said tiredness kills. That would apply for your regular GP just as much as for the locums, wouldn't it?

i could not do a job that kept me awake at night worrying about patients etc - let alone getting up on xmas morning to see to them at 5am - but some folk do

why is no one 'allowed' to do well these days

cazwa people are generally paid a lot because they are very clever -have worked bloody hard from age 14 - deferred a lot of god times whilst their mates were having fun - are good at what they do and work long often unsociable hours

if i did some jobs that my mates do - i would want decent pay

shirking tax does not come into it

Taking half of every extra pound you earn (or in fact, even more of every pound between £100k and £150k) is an obvious economic disincentive.

I don't earn anywhere near that amount but I am very glad that there are many who do.

All very well for people who don't earn that much to say "well, like it or lump it". The problem for the country is that it is very very easy for such people to lump it.

When Nigel Lawson cut the top rate of income tax from 60p to 40p, the total income tax revenue soared.

There are people who like paying tax, and would gladly pay more, but they are in the minority. Most people pay their tax grudgingly, think they pay too much for the level of public service provided, and would like to pay less.

Oh and that was on less than a fifth of the average GPs salary btw.

This situation has come about because of the incompetent deal that Labour did a few years back on GPs' contracts where they ended up paying the doctors more money to do less work. link

I do, and in the past have routinely done 8 or 10 hours extra a week for no extra money just to get the job done. I think the current pay deal which also allows them to opt out of OOH care is ridiculous.

Tis the irony about 'taxing the rich' you kinda need to them to agree and go along with it. Some will and some won't! And the richer they are the more flexiblity they have to change their lifestyle and pay less tax.

Slippery b**gers - rich people!

Cazwa,
Your views are fine except that I would much rather see a doctor that I know and trust than a locum. I don't think £100 or £150,000 is excessive for someone who has studied for 7 years and potentially saves lives. If they earned well over the threshold then fair enough but you can't blame them for choosing not to miss out on time with their own families for very little extra money!
The worrying thing about doctors who 'are prepared to work' is that they are often doctors who are locums and doing this kind of work on top of normal days and unfortunately "tiredness can kill". I am sure this is very rare but does happen and I am by no means scare mongering but I believe in fair money for services provided. My doctor is worth more than £150,000 without doing extra hours as the service she provides is really priceless (I am aware that not all GPs are great!).

There's a clear solution to that. Get them to do OOH for their existing inflated salary with no extra payment. As a condition of employment.

Sorry but anyone earning over 150k a year deserves to be giving back some to the less equal in society. If they arent prepared to work when charged that amount then fine, give it to others who are willing to work. Got no sympathy for tax-shirkers who earn a fortune.

Mollie - I think once someone earns £100k their personal allowance is phased out. Which in effect means the marginal rate of tax is more than 50% (60ish%) At £150k you hit the 50% tax level. Your GP could be at either threshold I guess. At the time I remember hearing that this wld effect GP's and solicitors working overtime.

Also this year the early retirement law changed - so I wouldn't be surprised if this tax increase didn't encourage some higher tax payers into early retirement.

This is why I think it unlikely that Labour would have increased higher rate income tax until they were very sure it wouldn't decrease tax revenue. Although I know plenty of Labour supporters assumed they would do it to avoid spending cuts!

Sorry, what happens with the 50% tax rate and personal allowance?

I take it there is something different from when you go over 32k and earnings from then are taxed at 40%?

"By jackstarbright Sun 09-May-10 22:13:01
I think you GP is caught in marginal 65%(?) tax rate which hits people as they lose their personal allowance"

I bet this is it - not just 50%, but the rest as well. Can't say I would be turning out on a Sunday night for 35p in the £ either.