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

[soapbox]

????

bad
I am in favour of a flat tax rate

vat reduction seems like a waste of time - do they honestly think all the retailers will reduce their prices?

Sorry - I didn't realise that the personal allowance (I assume that is what you mean by PA) was being abolished too. So that would add an extra £1328 onto teh tax return - or 0.5% of an income at £200K)

In reality, I guess, only people on PAYE will pay the additional 5% on earnings above £150K. The rest of people who currently "earn" £150K will earn £149950 on PAYE and the rest on dividends, taxable on a different regime.

Yes but the dividends etc. will then be taxed at the appropriate rate (45%) when the tax return is submitted...

Good idea.Should be more

I think the increase in taxation is a (very) bad thing.

When you increase taxation for the highest earners, you decrease the incentive to work for the people who have the highest productivity in the economy.

If I had the chance to earn it, I don't think I'd begrudge paying more tax on it.

"Oh dear, my gross income has gone down from £14,000 per month to £12,000 per month. How am I ever going to scrape by?"

1% of people are going to be affected by this and they are not going to be deprived by the effects.

And yes I do think if people earn that much money, they should be spending it on something other than themselves. If they're not, they're just very strange. Very rich people always spend loads of money on charity, good causes etc. Very few are famous misers. In fact, I can't think of any.

DoNot, the pre-budget anouncement announces that the personal allowance is scrapped for those over £140k that is another £2,400 tax straight-off (£6k at 40%, possibly even 45%).

Whilst £200k is a large salary the chances are that if a family has a single earner on that amount then they have outgoings to match, so mortgage of £3k+ per month plus highest rate council tax etc. This budget announcement will mean tax of almost an extra £6k per year (loss of personal allowance, 5% tax increase, 0.5% NI increase). If you have a balanced budget then to lose £500 a month is still going to be stressful. Not as stressful as if your total income is £1,000 a month, but it could still result in you getting repossessed etc.

But a flat tax rate you would have to hike the tax of the low income earners to create the same amount of funding for teh government (assuming that the government still need to recoup the same from income tax).

Good point mummypoppins.

I don't even earn that kind of salary (although I guess I do okay) but I still dislike the assumption that becuase they earn more, these people are automatically greedy scum bags.

The bank I work for is not really paying for flash christmas parties this year. However, individual members of senior management are paying for drinks/lunches out of their own pocket to support team building etc. Greedy scum bag-like behaviour? I think not.

DoNot - the higher rate for dividends is not 45% it is 32.5%, which is why so many co directors use dividends as their main renumeration : here

But when you look at that as a % of all earnings it is still only a 1-2% increase in income tax over the whole year compared to current losses (ona £200K income).

If someone is in such a fragile financial position that they cannot afford a 1-2% change then that is a sad situation - but something that could easily be recouped by adjusting the luxuaries budget in at least 99% of cases IMO.

funny how the super wealthy don't want to pay more tax but want to benefit from the sort of things tax pays for.
And the constant cry the Govt spends too much - shall we close hospitals? Schools? kill sick or disabled people? Stop building roads and transport indrastructure etc? Thats what taxes pay for and what the govt spends money on. I wish they'd spend more.

But Little bella you have made the point. They chose who they give it to and for most people that would be a charity and not the government!!

Anna888 exactly. Back to how Labour always wanted it !

Sorry milge. I have to admit I am a little way from teh upper limit...

really, if you are earning over £150k a year, would you notice paying a bit more tax? (genuine question)

The super wealthy high tax contributors tend to use fewer tax-funded services than the average person - eg the rich use private hospitals and schools rather than NHS/state and are unlikely to be a burden on the state in their old age.

need more coffee.....hang on a moment. Most of the people we are talking about use private school s/ healthcare and probably pay more in Road tax ( bigger and more cars ).

Whats more in doing so they create jobs and keep numbers away form the state system that quite simply couldnt cope if we all stopped overnight!

Without them the whole system would fall aprt!

If god forbid they win the next election, having tested the waters with the £150k+ bracket, who do you think will be next for the tax increases ?
Labour spending now is going to make things 10 times worse, but they don't give a fuck they know they won't be in power.

and where did those doctors train? Where did those teachers train? Where did their cleaners go to school? Where do those teachers/cleaners etc go for their health treatment.
They do benefit from public services.

would you notice paying a bit more tax?

Well, yes, in ost cases I would imagine so. Your outgoings tend to be higher as you have been able to support that level of living. I would imagine you'd notice your monthly pay going down

But to be fair that is a choice they make. They are still fully entitled to use public services...and I am sure that they will in some circumstances (e.g. A&E)

ASif.........probably not but is that the point ?

needmorecoffee - I wish they'd waste less.

High earners won't move abroad - if you have a job, it's not the same as income from shares and dividends.

Also, our top rate of tax is a lot lower than most other European countries - most of them have a top rate of 50%. Which is one of the reasons we are such a hub of international banking - it's one of the cheapest places to live if you're a high earner.

I agree that it's a bit late but I guess better late than never.

those teachers/doctors/policemen also have their kids are state school and would be unable to teach etc etc without the public sector. So the wealthy rely on the public sector same as anyone esle.

I think Labour is great. When my older 3 were little there was no child tax credit to lift families out of poverty. Now there is. We'd be in dire striats without it. the Tories shat all over the poor. Not that Labour hasn;t favoured the rich too. the gap between rich and poor has continued to widen.

this sums it up neatly