to think a flat tax of 25% for all on everything would be much fairer?

[peapodlovescuddles]

51% is ridiculous. People shouldn't be penalised for working hard their entire life (and I know this will be controversial) and being much better than average at what they doI know the economy is in trouble but surely alienating the richest portion of society is a stupid idea?
£150,000 isn't a ridiculous salary, there are plenty of middle class professionals who aren't living a lavish lifestyle earning that much.

Freebies never helped anyone, Kew. If you can't pay for your own education you should go and work in a mine.

(guess that would be the 'darkest corner of MN' you mentioned, then?)

Message withdrawn

Lol.

Some are highly paid and incompetent. There are many talented people of much more use to the economy than those on high salaries.

Only the money orientated judge success in terms of money. Thankfully most people have other measures.

"'Very few people are bright enough to get a place at Oxbridge (or even LSE, UCL, Imperial, Durham, St Andrew's etc) so when those that do graduate they have already proven themselves to be far above average so can get jobs that pay more than average.'"

But few earn 150k.

What about people who earn below the 'average-wage'? would we be expected to pay 25%?

DH brings home £12,000 after tax, etc - we pay just under £8000 in rent before any other bills .. and you're suggesting we pay more tax?

pmsl some of the highest earners in the city are traders with little education more akin to the east end barrow Boys of old than any super bright Oxbridge stars (doesn't mean they;'re not good of course)

I personally know at least one trader who moved so often as banks paid more and more money to poach his team that he never stayed anywhere more than 9-12 months and it wasn't very obvious (his admittance) how much of their success was down to the market and how much their own ability. HE would only move for a guaranteed bonus.

Most banks make money regardless of whether markets are good or not because they charge a margin, unless they cock up their margin, take unnecessary risks or the volume in the market is miniscule they can't really go far wrong.

(Am talking about dealing/trading obviously here)

YANBU at all.

It is perfectly possible to NOT live a lavish lifestyle but earn £150,000 pa.

There's a lot of Schadenfreude on Mumsnet. It's quite scary.

MrTH - long history of miners in our family tracing back to 1800's. More recently a family of cleaners and janitors until our breakthrough in the 60's due to education.

Now I wave at miners from my Rolls Royce.

depends what you call lavish really though doesn;t it.

A nice 3 bed semi in a very nice suburb of London where I live would set you back say £600,000.

Even assuming that you had no equity and had a £600k mortgage that would cost you around £3500 a month (roughly yes?)

Take home pay on £150,000 must be £6-7k

I could live fairly lavishly eg two holidays a year, a car or two and gym membership on £2500 a month including bills.

UNless you privately educate your children and lets face it one of the advantages of moving to a good area is that at the very least state primary education is pretty good and secondary isn't a total disaster.

Not Elton John type lavish, no. But hardly in the realms if wailing about your fate to the world.

I don't think anyone was suggesting £150,000 would be cause for complaint. Just that it's possible to NOT live a lavish lifestyle on that money in many circumstances.

I read OP and despaired. Fair to whom exactly? Oh, fair to people who earn over £150k. Poor dears.

There are several things that annoy me about this tax rise (not about this thread in particular - just the general coverage of the tax rise)

Firstly - all the bleating from rich people who apparently have become rich without understanding that they will be taxed at 51% on earnings above £150k, not at 51% on their whole salary. It's annoying to realise that this country isn't even a meritocracy, since cretins seem able to command such high wages these days.

Secondly - the screwed up values that have people on over £150,000 worried about their finances. Ever heard of the hedonic treadmill people? Step off it FFS, it will kill you.

Thirdly - I don't think it will be effective. It won't raise much money for the Treasury, and people will avoid the tax even if they're eligible to pay it, so it won't go far enough to plugging the black hole in the nation's finances. So we have to listen to all this bleating, but you know who is going to end up paying for it all in the end don't you? Not Mr and Mrs 51% for sure, it's going to be muggins again...

Fourthly - I believe that a rise in the basic pension or a rise in the amount of money that the poorest people can earn without paying any income tax at all would do more to reinflate the economy than all the government spending plans. Because people at the lowest end of the spectrum tend to spend all of any increase in money, all that money would be pumped back into the economy. Whereas low interest rates aren't working - people are still clinging to their money even though it isn't earning interest because they are scared of whether they'll lose their jobs. So far from a 25% for all rate I'd suggest reintroducing the 10p band and actually setting it higher up the income level, so that people could earn £9000 per annum before paying income tax, then be taxed at 10p up to £12000 - then keep the other bands where they are. I'd be tempted to leave the 51% band in just to piss off the bleaters. But no-one's asking me to do anything except make the dinner

Becstarlitsea -

I went out with my sister last night (she earns over £150,000) and she didn't even know there had been a tax hike for high earners in the budget. I think this idea that high earners are a bunch of city trader types, motivated only by money couldn't be further from the truth.

The thing is (and forgive inaccuracies, it's a long time since I read the argument...) if there were a flat tax and everyone paid their tax instead of evading it the actual rate needed would be something like 12% which is much less than the 25% proposed here. How many of you would complain at 12%?

Where do you get your 12% from?

appoliges to dollius i jumoped own wrong throat sorry

No worries!

I don't believe that a flat tax is workable, although I also think that "progressive" taxation has gone too far.

Here are some interesting facts:

The top 1% of earners pay 23% of the total tax burden.

The top 5% of earners pay 42% of the total tax burden

The top 10% of earners pay 71% of the total tax burden

So before you all get carried away with righteous indignation and wanting to tax the allegedly rich until the pips squesk, it's worth thinking about would happen. The top 1% of earners disappear and move to Hong Kong or whatever, with their transferable skills. This leaves everyone having to fork out an awful lot more

Poll Tax riots, for the poster who was too young to remember what the poll tax was. A flat rate tax on all adults that was intended to replace rates - the reasoning being that we all receive the same services, so should pay the same for them. Replaced by the Council Tax in order to save the Conservative Government.

Yes but 23% of the total tax burden equals a lot less in proportion to the income of those 1%-ers, than 29% does to the remaining 90% of the population.

Which kind of illustrates how disparate the rich and poor are in our society.

I think someone much earlier on in this thread demonstrated very well how the poor actually pay more in tax when you look at what you are left to live with/as a proportion of your overall income.

So I don't think progressive taxation goes far enough, frankly.

Quattrocento- your figures just make me question what a disproportiate amount money these people are earning.

OK, I know I am a sad git, but I have been working my way through ONS (Office of National Statistics) figures (mostly from Social Trends) and I would like to know where your statistics come from, Quattrocentro.

From table 5.12 on page 73 of Social Trends (link here it appears to me that their projected figures for 08-09 are that:

• those people earning over £50,000 pa will pay 50.5 percent of all income tax paid

• those people earning less than £50,000 pa will pay 49.5 % of all income tax paid.

OK, high earners will be paying more capital gains tax (if they don't avoid it) but I really am puzzled as to how they could end up paying such a high proportion of the total tax take.

Could you reference me your stats Quattro, I'd like to take a look at them.

Hi Takver,

I've taken mine from HMRC here.

I think I've confused everyone by referring to the total tax burden when I should have said the total income tax burden. Which is not the same thing.

Dollius, you said:

"So I don't think progressive taxation goes far enough, frankly."

But you haven't addressed the point about rich people leaving. They do do that, you know and the more money they have, the easier it is for them to leave. Look at Lewis Hamilton .... now tax resident in Switzerland ...

It was of course Labour who believed in taxing the rich until the pips squeak but it wasn't sound economic policy then and it isn't now. When top rates of tax were cut, the tax take increased.

Quattro, take a look at the Social Trends table & see what you think (if you click on it it downloads in Excel & you can play with it). As far as I can see from a brief look at your reference . . . they appear (in true government fashion) to be totally inconsistent. The figures I've given are income tax too . . .

Slightly frustrated here by the fact that big pdf files give my computer indigestion, but I'd be really interested to figure out the definite anser.