Income tax - top 45% rate scrapped! Bonkers!

[HoppingKangaroo]

The 45% top rate of tax (which currently applies on earnings above £150,000) will be scrapped entirely. How will this help the economy? It will just add to the government debt and it just helps out the very weathly.
Why not have more help for the poorest in the country and not have tax cuts for the very wealthy.

I'm not the one moaning about the rich paying more, so its not for me to come up with alternatives.

But given the mess we were in (now its even worse) cutting higher rate and re instating bonuses would be the last thing i'd do, increasing the 40% would be fair though.

To grow the economy, i'd look to rejoin Horizon, stimulate new business esp science, we do so at 1/10th to that of Germany.

What KK has done is take the UK toward a monetary fund bailout & that will lead to far higher taxes and lower public services for all.

I don't think anyone here has really grasped the situation we are in, put there once again by the Tories and ideology (referring to Brexit not the previous bailout)

Fine, nor argument.
But how do you make this happen, and fair, via taxation?

At what point, do you stop expecting the wealthy to keep paying? And why there?

Exactly.

Why do people keep repeatedly telling us that higher earners pay a lot of tax? We know that. Frankly, I know that from looking at my own payslip each month. So what?

Our point is not that the higher earners aren't already paying in a lot, but merely that we don't have a problem with that. And we don't think that the amount they're paying in needs to be reduced.

I’m extremely fortunate to be (by total household income) in the highest bracket and this will save our family tens of thousands a year but I think it’s absolutely bizarre. Our mortgage and lifestyle is tailored to pay this higher amount of tax and we obv have a very good standard of living so why do we need to pay less tax now when the NHS and other public services need the money?

I think Truss said something about attracting high earners from around the world but surely the amount they bring in would be much less than just keeping the higher tax rate?

We weren't in a fiscally sound position to be cutting taxes for anyone, least of all in the 45% bracket.

Thatcher/Lawson realised this and got the public finances in order before tax cutting, we are putting the horse before the cart, with as we can all see, terrible results.

Don't worry I'm sure the knock on effects will be great!
I mean the pound is sinking according to the BBC due to the crazy tax cuts, but all good news for foreign investors to be able to buy the country up really cheaply so why worry?

It is bad optics

If you don't take into account that it represents only 4.4% (2bn) of the tax cuts. Whereas the u-turn on NI is 33% (15bn), which benefits all.

The largest portion is the rejected corporation tax rise at 40% (18bn).

IHT, CGT and all passive income is probably a better place to position the witch hunt...I.e. The truly wealthy.

I think Truss said something about attracting high earners from around the world but surely the amount they bring in would be much less than just keeping the higher tax rate?

Truss is doing this because, unlike Johnson, she's a libertarian ideologue. She does sincerely believe in this stuff.

I think it'll go terribly for her, but it does at least explain why she'd squander so much political capital for seemingly so little benefit.

Because this is 2022, the UK is fucked in a very different economic place than it was in the 1990s. PM Truss is borrowing like fuck, not to invest in this country, but to benefit the rich and give them enough time and space to "get their ducks in a row" and abandon the sinking ship when the IMF have to step in.

I benefit from this change. My preference would have been to see tax thresholds rise to take more people out of the 40% rate.

However, I think the aim is blatant- they want to make the City of London more competitive and attractive post Brexit. Scrapping the bonus cap, IR35 and the additional rate all point in that direction.

Not just foreign investors buying up the country but a few people like Jacob Rees Mogg too
They never do anything that doesn't benefit them first.
Politicians are like this

Honestly, I think it depends on the overall state of the economy and what's needed. I don't have a magic number in mind, but when we have more people relying on foodbanks than ever before and vulnerable people struggling to heat their homes, I don't think it's time to reduce that rate.

I think there's a valid debate to be had about the extent to which the rich should contribute, but I find it hard to accept the point of view that they are contributing too much when there are people in our society who are struggling to meet the most basic needs. Wanting to keep more of your earned income to spend on luxuries when others are on the breadline is pretty repugnant in my opinion.

have you checked that because using the calculator at £277,000 on a single income is when you save £10,000- you would still pay £111,941.60 in tax and NI and for tens of thousands (lets say £30K) it is £610,000 on a single income ?

Well quite, and entirely predictable. So all those “red wall” voters who voted Tory at the last election, how are they feeling now I wonder?? Are they nodding enthusiastically, saying “yes this is what I hoped for!” Or are they feeling like a bunch of suckers?

They won’t care though because whoever gets in next will inherit this mess, then get blamed because the public have very short memories and then will be back in 4 yrs later but all becoming incredibly richer in the meanwhile. It baffles me how people seem surprised by what they’re doing, it’s always been Tory policy to make the rich richer and stuff everybody else!

Errrm.... 600K divided by 60 million is 1%, no matter how hard you deny it.

If they were serious about making the City of London attractive again they could always rejoin the EU. 😱

@BasicDad the problem with your suggestion that we could just donate the tax cut back is that we have no desire to contribute to the warped priorities of this government. Instead we will be increasing our charitable contributions, and making one directly to a certain unit of the NHS (assuming that this is possible).

What do you expect from Tories? it's the party for rich selfish people.

PM Johnson had to go because he broke the law and was found to lie repeatedly to parliament and his party. The public didn't boot him out, the shambolic, chaotic Conservative party did.

It's the same thinking for everyone though isn't everyone paying tax will benefit from the NI cut and the tax rate reduction next year.
I'll prob be around a grand better off a year but looking at a mortgage increase of £400 a month so that money isn't going into the economy or independent business its going towards keeping a roof over our heads

Agreed. I said as much in my follow on post. It's hard to keep up with this thread!

We really should be questioning why we have set up our lives in this country, so that a sizeable amount of people can't afford to pay for the basics we need to live - housing, food and utility bills - even in full time work. I know families, with two incomes, who are getting into debt to maintain a basic standard of living. Why?

Just imagine the optics of cos-play Mrs T part 2 when this all gets reversed in a 'making hard decisions' to have the countries' finances become sound again. Throw in a few trade deals and sunny uplands await. Might have misread the calendar as normally the tax giveaway happens just before the election.

Good for exporters. Although our exports have dropped by a third since you know what.
Not quite so good for imports - but we don't import much do we?!