What do you think of the 5% tax hike for those earning more than £150k - good or bad?

[soapbox]

????

bad, it will just make rich people move abroad

the thought of earning £150k is a remote dream!

they have to get re elected first dont they? 2.5% saving on vat is useless, hardly going to get the economy going is it?

I was a bit shocked that it brings it to 45%...sounds like a lot - it is half what they earn.

But OTOH it is only on any earnings above £150K so I guess they have a cushy-ish number on the first £150K...I guess it is a fair way to tax the rich without taxing the poor.

pretty inconsequential tbh, it shoudl have been a bigger increase, starting lower down, it is v low relative to earnings this is interesting

Good. They are the ones that can afford to pay high taxes. We need more money in the public coffers mainly because of the irresponsible behaviour of the bankers who earn these type of salaries. Let them pay for the consrquences of their own actions.

All governments pussy-foot around teh super rich and beleive their threats that they will move abroad if taxes rise. A few might, the vast majority will not, because like any normal people they have families and communities they grow attached to.

Has to come from somewhere I guess, though no doubt i'd be unimpressed if that level earnings were a possibility.

But at the moment a key issue is jobs- the more we retain the better our country will weather the economic climate. That means reducing barriers to employing people- and keeping the majority (after all I know nobody who earns that) spending / able to pay bills.

A big yay from me for winter fuel payments for diosabled kids, I know at least one MN poster who can't afford to heat her house with a child at risk of pneumonia.

am with 2 shoes - the naivete of this kind of thing stunning plus the cack handed way they bring stuff in - the balls up they made of changing the rules for foreign nationals living in was unreal.

think the 2.5% was a let down - potentially that could have been real kick start required (as I understand it fiscal stimulus tend to work better when those on lower income/smaller businesses encouraged to spend more with tax cuts - sorry but 2.5% off VAT ain't going to do that and I'm not sure some of other stuff (eg childcare tax credit) is sufficient to do it in this environment either.

In theory good, but in practise bad as the people who earn this amount will get in touch with their accountants and find every way conceivable around it.

artichokes what abotu all the people who aren't bankers who pay this?

too little too late

artichokes, those who are at fault are in the vast minority of the people being taxed more heavily.

sheesh.

I think it's too much. 40% is quite enough imo.

Why penalise high earners ?? The thing will be that with a clever accountant and other tweaks, those on the brink or over the 150K threshold will avoid the surcharge ...

I heard on the radio (it was just a passing comment) that when Germany was facing a squeeze they actually increased the co tax rate and used the money to fund employment schemes and other incentives to get those able to work working ...

But donotasfinished, hang on, surely it's on all earnings, not just earnings OVER £150k?

what is forgotten is that people who earn that sort of money buy new cars , use private haelthcare and send thier children to private schools. That is THEY SPEND IT!

They create enormous numbers of jobs. I for one employ 3 people at home . I dont stash it all away and what we are talking about is pumping money back into the economy.

BUt rememer its a political move not an economic one so it doesn' matter that it wont add up. This isnt about the economy its about ensuring that Labour remain in power long enough to really f**k things up.

MP

Poppy34 'artichokes what abotu all the people who aren't bankers who pay this?' - my thoughts exactly.

Also, is it really over £150k? I know that bonuses for example are taxed at the top rate currently - will that continue? In which case, if you're a PA earning 23k and you get a £2k bonus, will you be taxed 45% on the 2k? I genuinely don't know so anyone who does, please fill me in.

I have no objection to the rich paying more tax, but the reality is that at the current 40% they're already paying quite a lot, thank you very much. 45% seems a bit harsh.

And let's not forget, people paying top tax rates are also still paying the NI and VAT and all the rest of it.

amen to mummypoppins -they also employ people

bling - I haven't looked at details but bonusess are taxed at your marginal rate of income tax (not 40%) so in your eg the pa would be taxed at standard rate

its only income over £150k a year as far as I can work out

Bonuses aren't taxed on the top rate. If you're a secretary earning £23k and get a £2k bonus you will pay tax on that bonus at 20% and NI at 11%. That tax rate won't change at all.

no its income over £150k that is taxed at that rate - you still end up with a fairly hefty effective rate of tax if you're a higher earner

You only pay the top rate of tax on those earnings above the threshold. Same as you pay no tax on your first bit of earnings up to the basic level.

So if you are fortunate enough to earn £150K, you don't have to give nearly half of it away.

plus the other thing is higher earners personal allowance being taken down -its a fairly hefty kick in the nuts to the better earners.