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!

fluffles That may not be true after the child benefit changes though - one of the many reasons it should be tapered off instead of an arbitrary cutoff.

Violethill -

Poor people work extremely hard too. I don't know why people keep bringing up hard work like it's something only people with well-paid jobs do. I know you're not saying that outright but you're implying it.

bubbleymummy -

Oh, ok! That makes more sense. But you are still taking home a lot at that point, and I think at that level the 5-10k per 100k that you'll lose doesn't matter so much to your finances, whereas they could make a lot of difference to the tax income of the country all together. Taking it from lower earners would be unfair because it would be a greater proportion of their income.

Are people referring to my post when they're saying rich people aren't lucky? I'm not saying it's all luck and no hard work. I'm just saying lots of people work hard but don't have any luck so they stay poor, that's all, so rich people are lucky.

YANBU

I don't think 40% tax should be increased.

Violet.

I went back to work when my children were 12 weeks old as well. I paid the childminder more than I actually took home.

I have worked at least 70 hours a week for the last 15 years.

I pay 40 percent tax my dh will probably pay 50 per cent next year. We have already seen our income drop due to tax changes,ni increases, the pension relief is going and the child benefit.

We are reasonably well off but we still have to think before spending money. Spending 10 years abroad to avoid uk taxation is very appealing at the moment.

Agree with chaotica. I never begrudge paying tax as it's part of being a good citizen (which I guess you ain't).

Think of all the wonderful things you get for your taxes - healthcare to all (one of the best & best value for money), education for all (and a well educated, healthy workforce to choose from), decent road surfaces, clean and safe streets, transport systems, noone dying in the streets, protection from crazy folk trying to invade/kill us, justice and policing.. ad infinitum.

Taxes are the best, I love paying lots of affordable tax! (why dont you??)

I guess I must be lucky then apart from the fact I'm not rich.

What does 'rich' mean to you?

To me it means not having to think about a purchase and whether you have enough money to cover it. To not worry about the future in terms of what would happen if you lost your job. To go on holiday every year.

There is a whole spectrum between 'poor' and 'rich' and its where most people are. Using an arbitrary threshold doesn't make the system fair as it doesn't reflect the personal circumstances (not wanting to rant about CB but you know where I'm going with this...)

Ah, but we need benefits, to subsidise the shit wages the "rich boys" pay their monkeys.

ooo thank you for pointing out it is only the amount about £35,000 that is taxed higher, i was imagining some poor bugger getting a pay rise from £30,000 to £35,000 and then getting his pay slip!! lol

YANBU - I worked bloody hard and made a lot of sacrifices to get to the wage I'm on - it's certainly not super high in 6 figures but I would consider it a good wage. However I'm under 30 so have massive student debt - no grants when I was at uni which is (fairly) deducted from my income. I bought my first house with dp in early 2007 and have since watched the 15% deposit we saved and saved to put down slowly disappear with falling house prices. I missed entry to final salary pension schemes as they were all but closed by the time I was in employment. I will probably have to work until 70 with the rising retirement age. Not all that 'lucky' really!

Rina - I don't know your situation but you seem extremely bitter. You talk about the higher earners must contribute more in taxes - even if the % was the same someone on a 50k wage would still contribute more in tax and NI than someone on say a 10k wage. Think about it.

If they did decide to increase income tax in my income bracket I probably would consider reducing my hours thus contributing less in tax and also in my area of work

i think that tax levels (with the new 50% rate) are about as reasonable right now as they could be..

however, there is a huge problem in general with the spread of salaries in this country. Full-time pay can start at less thank 12k per annum. While ten times that amount is not a rare salary (figures in 2006 were that 1 in every 250 people earned over £100k, i can't find more recent figures).

if i were starting up a new company then i would instigate a rule that nobody can earn more than say four times what the lowest paid earns. so.. something like 15k for the unskilled menial jobs would allow me to pay 60k to trained, educated professionals at the top of the scale.

IMO rules like this should form part of the social responsibility part of triple-bottom line accounting (financial, environmental, social).

I agree with OP, particularly as those earning lots of money are less likely to use services like the NHS and state school system.

IMO high earners put in a lot, take nothing out and therefore get absolutely nothing for their money. I think 40% tax is sufficient.

Also agree with bubblymummy - 37.5k is not that much nowadays to sustain a household.

"For those on low wages or trying to get off benefits, the equivalent tax rate is 95%.
The government has finally seen how this is a problem so has said it will reduce it to 'only' 65% tax.

Bubbley - this is because of the withdrawal of services that the low-wage earner then has to fund themselves. Hence still making it a 95% tax rate. Shocking that people barely out of benefits were paying rates of 95% (and will still be paying 65%) when people on £150,000 have a rate of only 50%.

Great care needs to be taken when talking about income tax rates. That does not actually matter.

What matters is the percentage of total tax that a person pays out of their gross income and capital gains. Supposed high rate income tax payers in fact can pay a much lower pecentage tax on their total income and capital gains than a lower rate tax payer pays. There are many legitimate ways to avoid paying tax.

This is more especially true in the USA where Warren Buffet, one of the World's richest men famously said he (quite legally) paid a lower rate of tax than his secretary - which he felt was wrong.

Fluffles and wubbly - yes!

I am 40% taxpayer and think I get off quite lightly tbh. Yes my job has stressful moments but paying less tax wouldn't take away the tax.

"Violethill -

Poor people work extremely hard too. I don't know why people keep bringing up hard work like it's something only people with well-paid jobs do. I know you're not saying that outright but you're implying it."

You're right - I am not saying it. So why bring it up?

Some people work hard, and earn very little. Some people work hard and earn middling amounts.
Some people work hard and earn quite a lot.

You'll tend to find, though, that jobs with a salary that puts the employee in the HR bracket often require years of education and training (unpaid) and often involve large doses of pressure. Not everyone wants that. Some people (just as clever and industrious) are happier working in a lower paid and lower stress job. Or working part time.

And as for those people who still insist that all these jobs are out there which require no intelligence, qualifications or hard work, and which reap huge salaries.... why aren't you doing them then?

Infact I think I may be in profit, to pay to privately educate my children in my closest independent would cost about £40K.

Lifeinlimbo: "Shocking that people barely out of benefits were paying rates of 95% (and will still be paying 65%) when people on £150,000 have a rate of only 50%."

So because we have a totally screwed up and byzantine benefits and tax credits system, this justifies taxation rates of 50%+?

Why not just sort out the benefits system. 32% of all benefits paid (£53.5bn) goes to those on above average incomes. Why not stop that first before taxing people more.

There are about 29m workers in UK.

Most recent estimate of those earning over £150k numbered 300,000.

So the higher rate tax will make sod all difference because it applies to so few. It does however send a message about the politics of envy.

In practical terms, there is simply no point in increasing tax rates further. All the studies show that doing so would actually generate less revenue for the state (google "Laffer Curve").

Ultimately, when higher earners get sufficiently fed up with the tax burden, they find ways to pay less - either by (i) working less, (ii) moving to another jurisdiction or (iii) avoiding tax (trust me on this - it's an industry I'm familiar with).

I suspect that the UK is already squeezing these people to the limit.

You're right IslandMoose.

If I were taxed more, I would seriously think about giving up my Deputy Headship, perhaps working part time, perhaps doing something quite different with lower pay and less pressure. I've worked long enough to accrue a nice pension, so has DH... would be seriously worth considering..... There are plenty of other people out there who would feel the same. People who pay a lot of tax already, and will just make different choices if pushed to pay even more

siasl - "Shocking that people barely out of benefits were paying rates of 95% (and will still be paying 65%) when people on £150,000 have a rate of only 50%." "Why not just sort out the benefits system"

First we would need to sort out the system that allows some to be working full time yet still are in poverty, and some to earn over £150,000 (and they still complain).

One way to do this would be what fluffles described "if i were starting up a new company then i would instigate a rule that nobody can earn more than say four times what the lowest paid earns. so.. something like 15k for the unskilled menial jobs would allow me to pay 60k to trained, educated professionals at the top of the scale.

IMO rules like this should form part of the social responsibility part of triple-bottom line accounting (financial, environmental, social)."

I think what happens in reality is that people earning huge amounts chose to work less - because they can afford it, nothing to do with tax. One could argue this leads to a loss of skills, talent and work effort in our top earners, so increasing rates of tax will ensure they pull their weight like everyone else has too

If we ended up with laws on maximum wage multiples, entrepreneurs would take all their companies and jobs to places like Singapore.

I agree with violethill: If it's so easy to earn huge amounts, why don't more people just do it?