Why wasn't 40pc rate reduced or income tax thresholds raised?

[Indigoo03]

Any opinions?

I don't think they want to win the next election they have no idea how to undo the mess the country is in. This last effort is just to line their mates pockets and piss off the voters.

But the tax cuts weren’t designed to redistribute wealth, they were to give taxpayers more money

Some taxpayers

Well no, it's also on society. Most governments want to incentivise productivity, particularly if the individuals have useful skills which they probably do if they can get into the 50k bracket.

And the point is that actually, lots of us don't 'need' to do it. If you think that, you've completely misunderstood. DH and I certainly don't need to. We're happy enough with that, the state might well prefer that we worked more and used our specialist skills, especially in this labour market.

Now this isn't necessarily an argument for increasing the 40% threshold, or any other actually. You can take the view that some people choosing to work less at the point when they decide it's not worth it to them is acceptable collateral. That's fine, but do so whilst fully understanding the situation.

YeaX it has summed me up.
Read properly.

These tax cuts are ridiculous (fifth time I’ve said that now) and they’re doing what tax cuts are meant to do, give taxpayers more money.

If you want to help people
who pay very little, or no tax, there needs to be a different approach because this one won’t work.

All taxpayers!

You realise the basic rate dropped to 19 don’t you?

Because that would cost a lot.

The removal of the 45% rate will do very little damage, if any (considering we actually benefitted from reducing the top rate from 50% to 45%)

There’s always going to that jump when you move into a higher tax bracket and take home proportionately less of your pounds. It’s like that for everyone.

That is no reasons to not continue to work hard and try to earn more.

What rationale is there for that?

Woopy fucking do

WIth inflation at 10%, do you know what the median wage is and the impact of 1% is?

43% may not be paying income tax, but they are payjng tax. If they buy anything they're paying VAT, fuel duty, alcohol tax, tobacco duty etc etc

Cutting VAT would be a way to reach everyone, but also benefits the rich most.

I heard a commenter yesterday say they weren't looking at individuals but how to grow the economy per se. Shortsighted imo because the Rich will just stash it in pensions / investments because they have everything anyway but the middle class with more cash would say yes we'll change the carpets , book that holiday , keep the dog walker , build the extension etc etc . I can only assume the budget was done in haste so just a blanket approach to reduce tax and not look at individual levels .
As I said in another thread it would have made such a difference if they had taken everyone on less than £25k out of paying tax

Indeed.
You are arguing for wealth redistribution though.

There is a point when that has to be looked at in more detail.

And the impact on interest rates, mortgages....

Many people are going to not think they are better off with this budget.
Despite the spin

So how is giving rich people more money through tax cuts not wealth distribution but giving poorer people more money through tax cuts is wealth distribution?

Yep. It will benefit the rich the most, because they spend the most.

Direct cuts or increases to tax, do indeed directly affect those that pay the most tax.

That’s how it works. If people think the rich should just be giving more money to the government, to give to the poor, then just say it.

But government is taxpayers money (initially). You can’t separate those out.

Definitely - the tax cut for low and middle owners is a joke and the tax cut for higher earners is based on a long redundant idea that the extra money will trickle down - it won't.

My FTE rate is just over the 40% tax bracket. I dropped my hours to 60% after mat leave and was surprised to find my take home salary only dropped to about 75%. In real terms on my full time salary, for the extra 8 days a month I was taking home £600 above my part time salary, or £75 a day. That doesn't even cover my childcare costs.

What would be a better incentive? Free childcare. But you need a healthy tax income stream to provide that kind of thing sadly. And no, the current free hours aren't enough.

You aren’t giving them more money.
You are taking less of their money.

It’s hardly the same.

I think where people are going wrong is thinking the status quo is (somewhat) desirable and any change from it needs to be explained. I think they got rid of the additional rate band because it was something introduced by Gordon Brown that Conservatives have never liked or wanted. I don't think it's got anything to do with revenue considerations.

I actually agree with this, and look forward to them reinstating the personal allowance for high earners at some point in future as well. Not because of the effect it has on either taxpayers or government revenue, but because I want a simpler and more logical system. If they want they can finetune the existing bands (personal allowance, basic rate and higher rate) so overall it achieves roughly the same outcome as happened when there were four bands. (Obviously this would mean increasing higher rate. And ideally I'd like to see a decrease to two bands, corresponding roughly to personal allowance and higher rate. Those could also be fine-tuned to produce roughly the same outcomes for everyone as we used to get with four bands.)

Well,

There's a couple of hundred thousand conservative party members, and there's a couple of hundred thousand higher rate tax payers in the UK.

I'd imagine those venn diagram circles are almost concentric, doesn't take a lot of imagination to think what may have been offered to the voters during hustings in order to secure their votes in the leadership contest.

I don't understand why anyone thinks tax cuts are a good thing. I mean, as individuals obviously most people would enjoy paying a bit less, but surely overall giving (any) taxpayers more money to spend will increase inflation?

This seems unbelievable. I earned more than that as a receptionist in the late 90s.

They pay the tax, you aren’t t redistributing it to them (or anyone now; not that the rich really use the state for very much) they get to keep more because they pay so much more.

I pay tax
If I paid less tax, I could spend it locally.

I could keep more of my own money.
You seem to be arguing that only rich people should keep more of their own money instead of tax payers at the lower end.

Not everyone who doesn't "earn" £12500 a year is poor though. Retirees especially are spending other money. Inheritance, savings etc.

They’re awful and I can’t believe he’s done this (neither can global markets).

He has a PhD in economics from Cambridge though and is apparently brilliant… 😖