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

[Indigoo03]

Any opinions?

They're just a Thatcher tribute act.

Thatcher had principles and was intelligent and engaged with people who were open to debate and intellectual thought. I don't like what she came up with but it was based on an analysis and a vision.

This lot just want to recreate that without the analysis and vision, they don't think structurally or strategically they just reckon 'give to the rich and take from the poor and the economy will boom like it did under Thatcher.'

My point is that these stupid tax cuts (and they are stupid) will mean more money remains in richer peoples pockets, because they pay a lot more tax!

You seem to imply that lower earners are disproportionately losing out with their tax cuts. They’re not! They are saving what every everyone else in that same bracket of tax
is saving.

I don’t disagree with any of your points 1-3 at all.

The increase in pay is 5%, not 1%z

Tax is dropping from 20% to 19%.

1% drop in 20% total is 5%.

The AIBU is why wasn't the income tax threshold raised or the 40% rate reduced?

If we are going to borrow money to get these tax cuts, then why cut taxes for the rich instead of for everyone else?

A 160k annum salary used to be taxed at 45% above 150k.

So for that 10k - tax would be £4500
On that 10k now (at 40% rather than 45%), tax is now £4000

Now, that person takes home £500 pounds more than they previously would have.

They have still paid £4000 tax on it.

Yet people on here are saying ‘no, make them still pay £4500, and then we need to subside the lower earners, so actually they need to pay more’

Thatcher was an evil bitch. So yes I suppose you’re right they are a tribute act

At least Thatcher is dead

Yet people on here are saying ‘no, make them still pay £4500, and then we need to subside the lower earners, so actually they need to pay more

As I said, IF we are going to borrow money for tax cuts, who should that money go to?

No one has said the rich should pay more. They have said that if we are going to borrow money for tax cuts, who should benefit?

Yes exactly. And what’s wrong with that?

EAT THE RICH

I wonder if the disagreement here isn’t over this point, but more about why it’s so shit.

it doesn’t feel like there is a case for the mini budget being a good idea at all.

It’s not that it’s taking money from the poor and giving it to the rich that makes it regressive and crap (which is how lots of people seem to be approaching it). It’s more that it’s tinkering around the edges in almost pointless ways but in such a way as to create a weirdly strong sense of having the priorities all wrong.

I just don’t understand at all how they managed to have conversations that noted the top national preoccupation was the ‘cost of living crisis’ and a lot of people are genuinely very worried about their ability to pay for basics and then decide that the headline for the mini-budget should be removing the top rate of tax that only applies to the very highest earners. It’s so weird, it feels like a comedy sketch.

There are issues with the design of the UK taxation system. Many of them. And particular issues in relation to the highest end of the income distribution. But it’s such a strange thing to prioritise in the correct context. And makes such a clear statement about this new government in ways that can only be deliberate.

Because we already have a pretty high income tax rate for our higher earners compared with many other places.

They are trying to attract the wealth makers - who let’s face it, prop up the system via heavy taxation (income and otherwise). You keep taxing them, give cuts to others or over tax then - they say enough is enough and avoid paying or just pay none (I.e. leave).

That’s their rationale - I don’t agree with it at all.

I didn’t say there was anything wrong with taxing the rich.

The post is to demonstrate to some people on here, just how much (or little) someone on 160k is getting back by removing this band.
Its not 10k as the Daily Mail would have you believe.

This budget is a divide and conquer mentality.

I get their rationale.

"Hey, I've got an idea. Why not borrow money so we can do tax cuts"
"Great, Who do we give the tax cuts to?"
"Rich people so they are incentivised to come here, build businesses and encourage growth"
"Lower paid people, so they can spend more money locally, keep businesses running, which is important with inflation and potentially higher interest rates!

They chose rich people. A political choice

Ok but the point is anyone on 160k should be paying way more

Never mind the cunts on 500k, 1m, 10m etc

EAT THE RICH AND FUCK THE TORIES

Who you going to tax if you eat the rich?
Who’s going to pay then?

How much more do you want someone on 160k to pay?

@TakeawayManAlan grow up

That is their rationale.

It feels like rearranging deckchairs on the titanic though. The markets seem to agree there.

While also giving a clear sense of fuck you to most of the population. The government knew this and clearly decided that’s what they wanted from this.

OTOH, who's going to keep the country running if they can't afford the basics in life.

Even rich people need services providing.

Yep! They’re utterly deluded.

And yet, I’m not convinced they will get the bartering they so richly deserve at the s next time.

Because, on average, they receive more in tax credits and benefits than they pay in tax, and these are paid for by taxing higher earners.

That’s pretty much the definition of a subsidy, taking money from one person and giving it to someone else.

Absolutely. That was rather my point - their rational is warped.

I don’t think they should have cut them in this way, there are other, more equitable ways to try and stimulate growth.

Income tax is a red herring tbh.

All this infighting amongst the proles, yet corporations quite visibly get away with murder!

It’s horrific.

Anyway, going to rugby.

Happy Saturday all!

Excellent post, agree broadly.

Come on, at least have a look at ONS data. No, this is not considering services, only taxes paid and tax credits and benefits received.

IFS analysis suggesting all those earning <£155K are worse off with this budget.

Presumably because the scraps of 20-->19% basic rate change and NI changes are pissing in the wind compared to government's decision to fail to index payment thresholds.