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.

Or, alternatively, a small number of salaries. The jobs would remain, even if some holders moved elsewhere - they're over subscribed roles, others would fill them at speed.

Dark warnings of brain drains are wide of the mark anyway, because most people want to stay in their home country. Plenty of higher taxing nations retain talented, educated citizens without difficulty. And at the moment, there are lots of educated, skilled, former high-earners from the likes of Lehman Bros, all looking for work. They'd be only too happy to get back to those salary levels, should people decide to vacate.

But some of us qally could leave and take our business with us...not saying I'm going to....I can do my job from anywhere.
As for Lehmans - they mostly all got jobs with another company who took on the staff pretty much lock and stock.

Quattrocento you said to MIFLAW "you are entirely wrong when you say that "the majority are the financial backbone of this country and they are staying - not the tiny minority of high earners". What the discussion about numbers showed is that it IS the high earners who are providing the financial backbone of this country. Over 50% of income tax revenue is provided by people in the top 10% of incomes."

I think MIFLAW is correct in that most tax revenue comes from ordinary working people on average salaries. Quattro why do you think otherise?

Podrick - from lower down the thread:

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 90% ie most people only contribute 29% of the tax!!!!
Are you sure?
Not disbelieving you, just generally disbeleiving.

Absolutely sure - it's in the Office of National Statistics information and also the information from HMRC posted lower down the thread.

see you should all be THANKING the high earners not bemoaning them!

No Suzi. High earners should be thanking everyone else. If we didn't have a civilised society complete with underpaid dogsbodies to do all the caring and mopping up after us, high earners wouldn't have the opportunities they have to make all their money.

We are all part of society, we all have to give something back. At the moment, high earners are best placed to help plug the gap.

And Litchick, the reason that 90% of people "only" contribute 29% of the tax is because many, many people are paid very little and a few people are paid grotesque amounts of money. It is a sign of the disparity that still exists between rich and poor in our society.

Thankfully we go some way - but not that far - towards broaching that gap. It is the sign of a civilised society, although I think we still have a fair amount of evolving to do.

And I will never accept that a corporate financier is more deserving of monetary reward, or works harder than a nurse who works day and night in a hospice.

Litchick - I do know unemployed ex-Lehmans people. Admittedly one is currently snowboarding in Whistler as he spends a year travelling North America... but the point remains that there are more people with what it takes to do highly paid jobs, than there are jobs available, right now. That's why training contracts are gold dust for Finalists, and the competition even for summer placements so tough. Admittedly, the hours alone do go a fair way in justifying the crazy salaries some people earn, but I know a couple of people who are pretty high earners, and are themselves currently mildly disgusted by the whining about tax. (Two lawyers, one of whom is a QC, a management consultant, and an accountant.) They tend to work on the basis that their parents worked rather hard, too, and so do friends in less lucrative fields, and they fail to see why the lower-paid should have to cough up money they actually need to live so the higher paid can have extras. But then, my university college was called "Red King's", so possibly my social circle are unusually socially minded for their professional fields.

Bottom line: if you only qualify for that tax threshold on everything you earn over and above £150,000 per annum, you're still being nicely rewarded and still very comfortably off, thanks very much. Not to say you don't deserve it and haven't earned it, but the idea that you need the money to keep the wolf from the door more than low earners do is risible. The tax burden is what it is, and has to be shared somehow - so in effect, saying you don't think the increase for the wealthy is fair is saying it'd be fairer for those working in Tescos to take a hit instead. Everyone needs a basic amount of money to keep a roof over their heads and food on the table, and the less people earn, the more disproportionately hard taxation hits them. It just seems greedy unreasonable to want everyone to share that burden equally, percentage-wise.

I have a feeling this debate is going to get ever more heated and frequent as the economy flounders, and the national debt spirals.

I was going to add a comment to this thread but have just read Qally's second paragraph and agree so I won't bother!

I would like to add that I get slightly irritated by the idea that £150,000+ earners somehow work harder than the rest of us and therefore deserve to be left alone. There are lots of people out there who work very hard, doing very difficult jobs which require a high level of skill, who are never going to earn anything like £150,000. I include myself in that - I work in the Arts and would probably treble or even quadruple my salary if I moved into the corporate sector. Admittedly I seem to exist in an educated liberal world (the Daily Mail's worst nightmare) - my peers from university are largely not in these high earning jobs. There are nurses, a couple of legal aid lawyers, charity sector people, civil servants (and please no one start on them - my DH is a central government civil servant and he works incredibly long hours and really cares about what he does).

''But why shouldn't people all give away THE SAME % of their earnings? Just because DH earns more than most why should he lose proportionally more of his income? he shouldn't he'd still be paying over £100,000 in tax if he paid 25%.''

Well, peapod, you should count youself as damn lucky then! Even if your husband earned his own money, he has earned it from the society you live in. No one makes money totally independently because as human beings we depend on each other to survive. Your husband has been successful, of course it's his duty to pay back proportionally more to the society which helped him (he is still taking home huge amounts) so that others might also have a chance to make themself successful too (or just survive). If you don't like pulling your weight in society, and paying taxes, might I suggest that you move to a small island or uninhabited area in order to avoid having to do anything for anyone except youself.

Also, do you understand how the tax system works? You're not paying a higher % than anyone else in each tax brackt, you've just reached a higher brackt that others. That might equate to a higher % overall, but within each level it will be the same as everyone else.

'DH is a central government civil servant '

Ah civilservants...

I read something recently that civilservants were all cheats on golden plated incomes that should be halved.

I used to be a vcivil servants, albeit for a short time.I earned, full time, in 1995, less than £8k. Assuming its gone up proportionately- halve it? PMSL

Amazed that anyone thinks it's news that people who earn stupid amounts of money pay more income tax than people who don't earn very much. The clue's in the name, people!

Overall tax burden is a different matter. VAT, for instance, disproportionately affects the poor, because the tax on a box of tampons is the same whether you earn £10k or £100k.

Don't see why paying more income tax makes you a hero. Big deal. You are just paying what's due, same as the rest of us, except the very rich who exploit all the loopholes.

The top 10% of earners pay 71% of the income tax take as well as more on taxes like SDLT, council tax. CGT is now flat rate but until recently it was taxed at your marginal rate which meant that high earners also paid more CGT. Stamp Duty Land Tax is a 'slab' tax in that if your house costs £1,000,000, you pay 4% Stamp Duty Land Tax on the entire amount but really it should be applied like income tax 0% up to £175,000, 1% to £250,000 etc

It's only those who are employees (which is nothing like most higher earners) who will be paying this anyway and they are raising more from increasing petrol duty than on these top tax bands.

It will of course catch all those in Government and in quangos on PAYE salaries earning over £150k which is rather good fun.

Sigh.

It is a GOOD thing that rich people pay more CGT than poor people and that it is marginal.

This is not only based on "fairness" - it is because, if you allow the rich to accumulate vast amounts of wealth, the wealth becomes static (and often leaves the country.)

If it's not moving around, society doesn't work properly.

Wealth needs to be spent to get things moving, in good times and in bad. The government taking it off the rich and spending it on capital projects (even if it's ships and planes for silly, pointless wars) achieves that goal.

Most taxes that hit the rich harder than the poor have the same result in one way or another and so are GOOD.

Repeat it till you learn it.

PS where does this tosh come from that "The top 10% of earners pay 71% of the income tax take"? I can believe - at a very very hard push - that they pay 71% of the total tax burden (ie including all taxes, transparent and hidden) but 71% of income tax? If that was the case, surely any govt could be instantly popular by raising the personal allowance to 20k as doing so would have a negligible effect?

In reality, most of these top earners will avoid this tax by transferring income to spouses and many other tax avoidance measures. They have access to the professional advice needed. Those on very high earnings will simply move abroad. This is why introducing high marginal rates of tax for the top earners rarely brings in the hoped for revenue as they simply work out ways to avoid it.

Then the government is forced back to placing the tax burden back on average and low earners, by eg raising VAT rates.

MIFLAW - CGT is no longer taxed at marginal rate - it is now taxed at a flat 18% rate. As it used to cost HMRC more to collect CGT than they actually collected. Even this stupid government eventually saw that that was rather silly.

CGT is a flat rate. Repeat it and learn it.

By the way, Quattro's figures come from HMRC.
And you know anyway, that this government taxes the poor and then gives it back to them in Tax Credits thus keeping hundreds of public sector workers employed in nonsensical bureaucracy. And then they employ more people to overpay you the tax credits, then yet more people are employed to liaise with you about how you might pay it back.

Think you're being a bit rude Miflaw.

I suppose it is all a question of perspective. No-one I know in the £150k plus range is actually complaining about being taxed more - the complaints all stem from the issues Swedes has highlighted - paying more to watch the government waste it horribly is not particularly pleasant.

I think if ALL tax was abolished barring the 25% then everyone would be financially better off, thought whether it would be fair is another question.

Swedes and Quattrocentro are absolutely right. And although people are right to be sceptical about people earning £150,000 leaving the country, they may well chose to work less hard, or take legitimate steps to avoid paying the tax. People might be prepared to pay more tax if the services in this country were good, but they are not, and in the case of the NHS that can't be blamed on underfunding.

I htink we need much better PR for the rich in this country. Posters and TV adverts featuring we high earners saying these people create your wealth, pay your benefits and keep you going. Be grateful....

In the 2004/5 tax year households in the bottom bracket earnt an average of £8,376 and paid an average of £3,564 gross tax - about 43% of their total income.

People in the top bracket earnt an average of £84,357 and paid an average of £29,420 in tax - about 35%.

So please stop moaning about your tax bracket - it is the poorest people who are paying the most tax, not the richest

Its about time the government take off the rich and give to the POOR
YABVU government have given the rich an easy ride until now, and its about bloody time

If i made anywhere near the £150k mark id be happy to pay ore taxes

My partner works his gutts out for the wafer thin pay packet he recieves at the end of end week, and its a job he enjoys. I had a better paid job, but am heavily pregnant so am not working at mo

Rich eople always the same, the more youve got the more you want

hmmmmmmmmmmmmmmmmmmm one word comes to mind here "GREED"