Rishi considers tax cut for top earners

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I am really trying to stay neutral here. But, faced with massive by election defeats, from a nation slammed with mortgage rises, cost of living, and inflation, The Tories are thinking about how they can reward the top earners???

Really?

Not the millions doing 60 hour weeks and struggling to pay their bills. It's this lack of awareness that is the whole problem...

Rishi Sunak considers tax cut for top earners after byelection defeats (msn.com)

For that to be true, every single additional rate taxpayer in 2012 (of which there were around 250,000) would have had to reclaim £32,000 in the same tax year to account for the £8 billion year-on-year increase following the cut. So it appears as if the myth is that the lower rate resulted in a lower tax take, whereas the facts would suggest it resulted in a higher tax take. Particularly as the tax take in subsequent years remained higher than when the rate was 50%!!

The tax rate doesn't have to be at 40% anyway. Why not, say, 30%?

We could have different tax rates and allowances from those we currently have. For example, have higher personal allowances, which would benefit all but take more of the lower earners / part-time workers out of tax, then tax rates set at 22%, 30%, 40%, 45%, according to income bands.

That's just to suggest the idea of different possible rates. Other figures are available. The effects on the tax take and on everyone's net earnings would have to be calculated to work out where exactly to set the rates and bands.

This

NI and income tax need combining
I agree with this but it will never happen as it would look like a tax rise to most thick people.

For that to be true, every single additional rate taxpayer in 2012 (of which there were around 250,000) would have had to reclaim £32,000 in the same tax year to account for the £8 billion year-on-year increase following the cut. So it appears as if the myth is that the lower rate resulted in a lower tax take, whereas the facts would suggest it resulted in a higher tax take. Particularly as the tax take in subsequent years remained higher than when the rate was 50%!!

Not claiming tax back - rather deferring payments and bonuses etc. It’s very difficult to pull apart all of the factors individually, but it is definitely not as straight forward as it raised £8bn more, nor provides evidence that there is where the ‘sweet spot’ on the laffer curve sits

https://www.independent.co.uk/voices/george-osborne-claims-cutting-the-top-rate-of-tax-raised-ps8bn-it-cost-the-country-ps2-4bn-and-here-s-how-a6905836.html

https://www.ft.com/content/d7cbfec0-dfcb-11e5-b67f-a61732c1d025

Jam tomorrow

Completely agree with raising the 40% threshold and they should look at the child benefit tax charge while they are at it . But it still wouldn’t be enough for me to vote Tory.

I wonder how this would translate to Scotland where we have to pay 42% on anything over about £43.6k That is far too low a threshold and really does make it incredibly hard justify pushing to earn over £43.6k!

There aren’t enough top earners by a long long loooooong way to swing any vote for them

Yeah only about 5 million people earn over £50k which wouldn’t move the needle

Following the by-election losses, Rishi is being criticised by the Telegraph (the Tory party’s own paper) and by many of his own back bench MPs who believe the current tax burden on their readers / constituents is far too high, and is a disincentive to work harder or for entrepreneurs to invest so he’s throwing them a bone to placate them.

Doesn’t mean it’s actually going to happen.

Exactly. Also, how to 'not' have a mortgage? Climb the property ladder.
20 years ago even in London a starter flat was quite possible on a modest entry-level salary. People then traded up. Often, they met and married someone else who also had a flat and sold both for a house, meaning they never needed to pay such a large mortgage. Quite a comfy position by the time they've worked their way up to 50K.

Someone starting out in 2023 with a graduate salary of 30K (being generous, many roles pay less and this is the national median) takes home a grand total of £1987 a month. Out of that, 1K+ on rent and bills leaving behind very little for student loans, food, and transport. Not to mention saving for a deposit or actually having a life.

A 50K salary would put them on a more even footing with their predecessors, of being able to buy a starter property. That's all. It's not untold riches.

Equally if 50K is indeed 'high' reaching it when you are much older and in need of more than a 1 bed flat doesn't make things much better.

If inflation continues at the levels of this and last year, people will be paying tax on their basic state pension before 2026. There does need to be some index-linking built into the tax thresholds which were set in 2021.

Don't worry about it. He hasn't done anything else, he won't do this either. He has literally achieved nothing.

The 40% hits middle earners hard, so I do think it needs raising. Still won't make me vote Tory though.

You can blame the Conservatives for a lot, but not SNP tax policy. Assuming this "change" was done next year, Scotland would remain in the same position as now.

Mind you, Sunak froze these bands as Chancellor so really, it's actually his fault we are all paying more tax.

They need to raise the threshold for the 40% rates to at least £70k & then close the tax avoidance loopholes to recoup the tax. There are plenty of tax avoidance loopholes that could be closed to raise additional revenues. But wait why would the Tories tax themselves when they can raise the funds by taxing us instead......

@Fightyouforthatpie That will never happen as pensioners don't pay NI. Sadly any government is to scared of the pensioner vote to do anything which may benefit anyone else at the expense of pensioners.

@Fandangoes Maybe higher earners in Scotland should consider, to date, massive levels of support for the SNP?

Was wondering which band was meant.

It's because the Tories are now crap at politics. And crap at policy. And believe in fantasies about the way to create growth through tax cuts as opposed to economic. Cooperation with our European neighbours.

Fahbeep would benefit personally from such a tax cut, but Fahbeep don't want it. Fahbeep is happy to pay tax for better services for all.

The facts are simple, after 13 years there are no public services or areas of the public realm that the Tories have strengthened. All areas of public life are damaged in deep and unbearable ways. Yet somehow the Tories have landed us in a situation where the tax take is the highest it has ever been since 1945. It is, quite simply, the worst of all worlds.

My sincere hope is that the Tories lose so many seats come the GE that the LDs become the official opposition, and politics is dragged away from the hard right and into the centre.

We can but dream...

I wouldn't vote Tory but it makes sense to raise 40% threshold. £50k is not a high wage anymore.

Of course as others have said, it was Sunak's decision as Chancellor to freeze personal allowances in 2021 as inflation took off that was the real mistake. It deliberately reversed what the Coalition did to increase them in the first place between 2010-15.

And also the disaster of Child Benefit clawbacks at £50k to undermine the principle of universal benefits. A threshold that has never moved since that tax charge was introduced... it should be north of £65k at this point.

How can I put this politely?
I'm a 40% tax payer. Rishi Sunak could attempt to buy my vote by reducing my tax bill to zero and I still wouldn't vote for the slimy bastard and his party of incompetent, corrupt, self serving morons.
Sorry - I've clearly failed to find a polite way of saying that.

I don’t know enough about this but it seems an unpopular idea right before an election.