To think that taxing high earners even more would actually be a bit unfair?

[bubbleymummy]

I hear this suggested a lot on mumsnet and I really disagree with it. High earners are paying a huge contribution in tax already - thousands and sometimes 10s of thousands more than a lot of people who are clamouring for them to be taxed even more! Why should they be punished for having a highly paid job? How would you like handing nearly half your income over to the government? I think we should be thankful that we do have high earners who are already making a significant contribution. We would be a lot worse off if we drove them away with higher taxes!

happiestblonde - the question shouldn't be if a flat tax is fairer. It should be does it work better.

Lowering business taxes would work better.

I'm pro coalition because it had to happen to keep out Labour but many of the reasons I vote Conservative (lower taxes, pro business, repealing the hunting ban, raising inheritance tax threshold) have been put on hold or forgotten

give each man a fishing rod and let him catch enough to eat is a little better than give some of the village a fucking big net so they can catch more than they need and there is none left, and then accuse those without fish or rods for 'not making the right life choices' and then blame them again for the stinking rotten fish smell hanging in the air...

In this hugely long thread (have ploughed through it to check), there has been very little on how neither the previous Labour government (who introduced it) nor the present Coalition government (who have retained it) actually expect the 50% rate to bring in any more tax. It is entirely politically motivated, and in fact is likely to lower the overall tax take - more avoidance, more evasion and more high earners and companies relocating to lower tax jurisdictions.
A bit like the fact that inheritance tax is a rather pointless tax as it costs very nearly as much to administer as it brings in. But there would be public outcry if it were abolished.
Surely we should be concentrating on designing a tax system to make this country wealthier as a whole? Bringing down tax rates would in the longer run increase the overall tax take. It would attract foreign companies and investors, there would be less avoidance and less evasion. That way there would be more money available to improve public services (in particular our education system, helping the UK become more competitive for the future), to pay higher benefits to those in real need, support for those with disabilities etc.
"Equalising" wages, jacking up tax rates etc all have the opposite effect.

What matters is tax take, not tax rate. There is strong evidence (such as the Lawson 1988 budget) that cutting the top tax rate often increases tax take.

Labour supporters, therefore, understand this: the best way to save your favourite public service being wickedly scrapped by the evil Tories intent on fixing the deficit instead of doling out free (aka borrowed) money left, right, and centre, therefore, is to scrap the 50p tax rate.

I look forward to the protests.

Oh and swallowedafly, we used to have a system where household income was taxed, the husband submitted a tax return for his own and his wife's income. There were plenty of issues with that too - separate taxation for spouses has generally been seen as a good thing for women.

But I thought those people with a larger share were already paying a larger amount of tax?

The problem with taxing hrt earners even more is that many of them have commitments that were made during the better times (just as us as a country do to overseas aid etc) now perhaps some of these things can be downsized but sometimes not without huge financial penalty - or they have to try and earn more. Over the past boom years many people however much they have earned have spent as much as they earn (keeping businesses both small and large going/private schooling etc) now they can stop doing this but this would be detrimental to many more people who pay their taxes as I think litchik referred to earlier. Yup the better off can cut these things out, but then more people become unemployed, businesses fail and we are back to square one. If you have a big house who then lives in it if you are to sell it? thats if someone can buy it and afford to? but then the rent if they were to let it out wouldn't be affordable for hb so you would have more people trying to claim hb for less housing and more demand. Its a sticky situation, there are services that shouldn't be cut, and there are many that should be increased, however there are quite a few out there that are not necessary (Local Govt jobs that analyse analysis etc at costs of millions to the combined councils - having just googles unnecessary governtment jobs uk several sites came up with information) yes making these people redundant would cost a little bit of money but equally there should be no real reason that someone in the council is earning £100k+ or am I a muppet for thinking so? These jobs maybe necessary but are the salaries so?

Swallowedafly - if you are suggesting that childcare costs should be tax deductible I entirely agree - but looks like we might be waiting a very long time for that.....

it's not worth earning in the higher tax threshold - of course it is, you still get to keep the same amount of money you had plus 60% of everything higher you earn.

Hardly makes me want to put loads of effort in doesn't it when you lose almost half of what you've worked hard to earn.

I guess if it's only about money then no, what about doing some one a favor, a bit of pride in what you do, does that count for nothing, oh and then there's just being grateful for having a bloody job in the first place. Threads like this remind me why I would never employ a Brit.

I agree op totally. My dh is classed as a high earner, I am a STAHM and dont earn, but we are not rolling in it by anymeans. We still have to watch the pennies, dont know where dhs Jag or BMW is though , and where is our holiday home , I wish. It is a myth that we are rolling in it, high earners are taxed through the hilt and then some, we still have to budget.

if you don't want the £60 I'll have it.

Niceguy2 - If you're company had wanted you to TAKE HOME £100 they would have given you £168.

As we all know the higher the tax rates the less money comes in and the poor suffer. At the moment people who should spend more time in church dealing with the sin of envy or even get out and do 2 or 3 jobs or 80 hour weeks as plenty of the high earners do.

Anyway in this jealous stage the 50% rate came in. It is not politically right to remove it yet but I hope in about 12 months it might be. We should also merge NI and tax as there is no fund as such.

The top rate is 52% or will be if you include NI, not 50%.

"Oh yes, its really important for ME to be rich, because then I can help poor people by buying their stuff... what kind of argument is that? Surely if everyone was given money to give out to whoever they fancied, it would be more productive rather than inflating the cost of luxury services because the number of buyers is low....

god."

this is a very childish view

"I guess if it's only about money then no, what about doing some one a favor, a bit of pride in what you do, does that count for nothing"

because that's really what he said

these comments show a total lack of respect for tax take and a rather over-developed sense of entitlement

Lol at niceguy most people have to work harder and do extra for no money, no annual raises, no bonuses etc.

They are just told do it or we will find someone else who will (they say this to my husband and his team all the time). Most people do it so that they stay in employment even if it is on the minimum wage.

btw coalition I misunderstood your post, as I think is now clear

I thought you were saying that giving people jobs rather than money was one of the worst things you could do

noodle I think your contributions are insightful and helpful in giving perspective

As I said higher tax rates mean less money recovered for the poor. The highest rate at 52% or whatever is a disincentive to work harder for many and also just means that for some who aren't direct employees they legitimately seek to reduce it which they dont' bother so much with when rates are 40% or lower.

I live in a place where most people are on very low wages and it is rare to find people who earn as much as the national average, never mind about high earners. I think its interesting on this site how much so many people still count as not being rich eg spending £200 a week on food. That is rich and very affluent to me.

I want no more money for me, I am happy with my lot but I think there needs to be some way of ensuring the disabled and the genuinely needy people recieve help. This doesnt neccessarily mean handouts, I am talking about services. My husband is a volunteer youth worker and I have heard first hand the useful services they are cutting to the learning disabled, children/teens in care etc. I think its terrible and want the help for these individuals. I havent got much but the disposble income I have got I would happily sacrifice more of my money if I knew we could keep these types of services running. I also work with vulnerable children and see things being cut for them already. SS and other professionals are very stretched in my area and I do think it has a big knock on effect on the children I work with. These are the real casualties of the recession imo

I really think a good place to start would be to address the tax loopholes that allow people and companies to avoid paying what is fair.