Not surprisingly Osborne's story about the 50p rate not raising much money is unravelling.

 

FIrst, the so-called assessment only looked at two years, the year before the 50p rate was introduced and the first year it was in place. Sounds reasonable? Well, no actually. Alistair Darling announced the 50p rate a year in advance. That meant that many high earners paid themselves some of their 2010/11 income in the previous year so that they could pay 40% tax on it rather than 50%. Therefore, the amount of tax collected in 2010/11 is artificially low. The figure for 2011/12 is likely to be somewhat higher.

 

Of course, the Tories will now use the same deceit again. 50% taxpayers have now been given notice that the rate will be reduced to 45% from April 2013. Therefore, we can expect a lot of people to defer some of their 2012/13 income until the following year. Therefore, the amount collected in 2012/13 will be artificially low and the amount collected in 2013/14 (after the rate has been reduced) from the same people will be artificially high. Funnily enough, those figures will be the latest ones available for the 2015 election.

I'm guessing companies like PWC, who I might be working for in a few months time, will have been on the phone to all of their clients arranging this within seconds of the cut to 45% being leaked to the papers.

I'm guessing companies like PWC, who I might be working for in a few months time, will have been on the phone to all of their clients arranging this within seconds of the cut to 45% being leaked to the papers.

I'm sure they were.

 

Of course, the question is, if so little money was raised from this tax then why were there so many people whinging about it?

I'm sure they were.

 

Of course, the question is, if so little money was raised from this tax then why were there so many people whinging about it?

Exactly! If it wasn't a success then why were there so many people actively avoiding it by moving some £17bn worth of income forward a year. Without the rate being scrapped it could have raised a fortune this year! Naturally as it couldn't be avoided George's chums had him scrap it.

If you want to tax fast foods then from a health point of view and an NHS point of view yes it's win win but don't forget as the foods are the cheapest they are the ones that tend to be bought by poorer families who tradionally have a worse diet so you'll only be hitting the poor which I thought was the opposite of what you wanted??

 

 

But the thing is, McDonalds, and other fast food places aren't the cheapest, at all. Its cheaper to go to morrisons and buy 6 burgers, 6 rolls, and a bag of chips then it is to buy 2 meals from McDonalds. It would only be affecting the lazy who don't want to cook, because those on a low budget would not eat at McDonalds.

I always get a large chicken legend meal, because nothing fills me up other wise, thats £5.49, not cheap at all. So in my opinion, the poor wouldn't be hit at all.

If you're earning £150,000 a year anyway, you can afford to be taxed 50%

 

I come from a tory family, and i like their 'new right approach' with making those on benefits who don't need them work and stuff, but 70% they just priorities the rich and its totally unfair. In the last election, had I been old enough, I would have voted Conservative, but I certainly don't know who i'd chose now.

I prefer the majority of Labour's policies but they can never pull them off and they are all completely useless. Green party I think haha.

If you ask me, the country's up shit creek because of a lot of these rich w*n**rs who avoid taxes, and particularly these rich w*n**rs in the financial sector who crashed the system which the likes of you and me then had to bail out.... And they're still bleating and whining like a bunch of babies for more "intervention" when it suits them, but god forbid that we actually try and regulate their behaviour. I hate these rent-seeking parasites. Frankly, I'd let them all leave, they can f*** off to China and screw up their economy.... -_- Get some hungry young kids in those jobs who have a genuine entrepreneurial spirit and maybe some innovative ideas....

 

It used to be that all the democratic countries in the world taxed the rich at FAR higher levels than 50%... Now, gee, when did all that change... When Neo-Libera$t ideas started to dominate in the USA, Milton Friedman, Alan Greenspan, all these tossers.... The pendulum has swung way too far in favour of the 1%

 

From an idealist position you may be right but I'd repeat the more that leave and take their wealth with them the more the rest of us will have to pay for the same services, that's the practically of the situation from a financial point of view.

 

I understand the logic in freezing minimum wage for under 21s to get more of them into employment but it's still incredibly flawed, a bit of money being pumped into the system would create jobs far more effectively but the Government is too obsessed with cutting spending. IMO the high unemployment figure is the critical factor - it's a point that has been made a lot but someone who's unemployed is doubly costly to the government because they have to be given benefits while not paying any income tax back. Throw a bit of money in to create more jobs and it'll see the economic situation improve far more quickly.

Looking at the long term, and perhaps even the government it may be wiser to have people in jobs and off the dole, but to the average employer who has to pay that wage their not interested in that just their wage bill. Throwing money at a problem rarely helps as we can see by the NHS.

 

But the thing is, McDonalds, and other fast food places aren't the cheapest, at all. Its cheaper to go to morrisons and buy 6 burgers, 6 rolls, and a bag of chips then it is to buy 2 meals from McDonalds. It would only be affecting the lazy who don't want to cook, because those on a low budget would not eat at McDonalds.

I always get a large chicken legend meal, because nothing fills me up other wise, thats £5.49, not cheap at all. So in my opinion, the poor wouldn't be hit at all.

That may be the logic of the situation but I live by a major street in Leicester and it's full of fast food outlets (not the big ones but the likes of subway et al, and it ain't the rich that are using them and eating from them. A lot of the time it's down to education and also inclination, but the correlation between income and health has long been established.

 

If you're earning £150,000 a year anyway, you can afford to be taxed 50%

 

I come from a tory family, and i like their 'new right approach' with making those on benefits who don't need them work and stuff, but 70% they just priorities the rich and its totally unfair. In the last election, had I been old enough, I would have voted Conservative, but I certainly don't know who i'd chose now.

I prefer the majority of Labour's policies but they can never pull them off and they are all completely useless. Green party I think haha.

If you earn £150,000 a year then you're practically guaranteed to have a very good accountant who can squirrel your money away where yo pay no tax at all. Looking at political history tax hauls doubled under Thatcher after she reduced the rate from 80% to 40% simply because avoidance/ getting money out of the country lessened. Of course people try to avoid paying tax if they can (most of us would to some degree) but it's finding the right balance between wealth and taxation that is the trick. History has shown that rising top rate tax rates does not increase tax hauls.

Just as an aside (and apart from an odd disagreement between Gimley & Suedehead) I seem to one of the few coming from an opposite view on most things on BJ?! :lol:

Just as an aside (and apart from an odd disagreement between Gimley & Suedehead) I seem to one of the few coming from an opposite view on most things on BJ?! :lol:

 

I'm a Catholic centrist who tries to see the good in everybody just wants everybody to stop arguing and just get along. I'm on the opposite end of a lot here. :P

Edited March 23, 201213 yr by Brett-Butler

I'm a Catholic centrist who tries to see the good in everybody just wants everybody to stop arguing and just get along. I'm on the opposite end of a lot here. :P

Debate is good, helps to formulate/ strengthen/ reasses belief. "Catholic centrist" what exactly does that entail? :D

Debate is good, helps to formulate/ strengthen/ reasses belief. "Catholic centrist" what exactly does that entail? :D

 

Sitting in the aisles during mass. :lol:

 

In seriousness, I tend to see myself as a centrist because I'm liberal on economic/social justice issues and conservative of certain social issues (generally the ones that are usually described as "pro-life"), which are largely influenced by my Catholicism. I suppose I lean slightly to the left (as do most people my age), but I don't agree with some of the liberal positions, so I prefer to see myself as a centrist.

Edited March 23, 201213 yr by Brett-Butler

History has shown that rising top rate tax rates does not increase tax hauls.

 

So, then you close down the tax loopholes and stop people from "Off-Shoring" by closing down tax-havens... Mind you, that would actually take a Government with a bit of guts... I dont agree with tacitly "rewarding" people who are serial tax avoiders (eg, Phillip Green) by cutting their tax rate... If you actually look at history and read your Adam Smith (a well-known Cause Celebre of the Neo-Liberast Thatcherites and Milton Friedman fanboys and girls, who choose to completely misrepresent what it was he was actually saying), he didn't believe the poor should pay taxes at all, his whole idea was to tax the rich, he also didn't believe in completely unfettered markets either.... Taxes were always supposed to be imposed on the rich, Smith believed in an equitable Tax system.. I dont see anything Equitable in allowing one group to be able to avoid tax where another group (those on PAYE) are being stung when mistakes are made by the HMRC or their employers' and have practically zero opportunity to lessen their tax burden, everything is set up to favour the 1%, you cant possibly deny that.... To me, that's immoral and completely un-equitable

i think the problem which as a critic is never mentioned but as a government is a very important point is that you need to make Britain attractive to the entrepreneur and top (board level) management. The reduction of corporation tax and the 5% income tax cut are incentives for this. We are in a world economy and I dont believe its too hard to make the argument that if the UK's relative tax rate is higher than other countries then the UK will be a less attractive proposition.

 

With taxes everyone should pay their fair share of tax although im not sure how you define poor. if its < 10k that will be covered in a couple of years.

 

i think the problem which as a critic is never mentioned but as a government is a very important point is that you need to make Britain attractive to the entrepreneur and top (board level) management. The reduction of corporation tax and the 5% income tax cut are incentives for this. We are in a world economy and I dont believe its too hard to make the argument that if the UK's relative tax rate is higher than other countries then the UK will be a less attractive proposition.

 

With taxes everyone should pay their fair share of tax although im not sure how you define poor. if its

But the money still has to come from somewhere. If it's not from companies or from the highest paid then that places more of a burden on the rest of us.

but really its not how it really works... so for example the 50% is only on salary over 150k. Most people who "earn lots" have their own business and so pay corporation tax and dividend tax on anything over certain limits they take out of the company. 50% income tax is not paid by enough people to make it a big tax gain but it puts off the most valuable (subjective) people to an economy - these people are the CEO's, board members who can drive improvement and expand companies bringing with it new jobs.

 

Also the fact that we have a low corporation tax level will hopefully drive more businesses to setup in the UK which in turn will bring revenue (taxed) and new employees (taxed and lower dole payments) so this incentive actually multiplies out into many different tax surpluses for the govt.

but really its not how it really works... so for example the 50% is only on salary over 150k. Most people who "earn lots" have their own business and so pay corporation tax and dividend tax on anything over certain limits they take out of the company. 50% income tax is not paid by enough people to make it a big tax gain but it puts off the most valuable (subjective) people to an economy - these people are the CEO's, board members who can drive improvement and expand companies bringing with it new jobs.

 

Also the fact that we have a low corporation tax level will hopefully drive more businesses to setup in the UK which in turn will bring revenue (taxed) and new employees (taxed and lower dole payments) so this incentive actually multiplies out into many different tax surpluses for the govt.

There are enough people on £150k+ to raise plenty of revenue if the 50% rate had been kept in place. As it is, most of it will have been avoided by people bringing forward or deferring earnings into years when the rate doesn't apply (see above).

 

This government are too keen on the idea that you get people at the top to work harder by throwing more money at them but you get people at the bottom to work harder by paying them less.

its really not much.. i think it was £1bn which as a comparions to our estimated tax receipts this year of 575.5bn is tiny.. but on the other hand we lose a massive competitive advantage by having such a high rate.

 

What your saying is right, giving more money to the rich can be seen as discriminating, but if this means setting up a business and running a business is more attractive in the UK than the US or somewhere else in Europe I think its the right thing to do.

its really not much.. i think it was £1bn which as a comparions to our estimated tax receipts this year of 575.5bn is tiny.. but on the other hand we lose a massive competitive advantage by having such a high rate.

 

What your saying is right, giving more money to the rich can be seen as discriminating, but if this means setting up a business and running a business is more attractive in the UK than the US or somewhere else in Europe I think its the right thing to do.

But that £1bn figure is artificially low because of the number of people bringing forward some of their earnings into the year before the 50% rate was introduced. This is why the mansion tax should have been introduced as it is a lot harder to avoid.

its doubtful many moved earnings around like this as many are employees and do not have this control. But lets say this is underestimated by a factor of 2, so there should be twice as much thats still 2bn which is very low still... and at the same time it is anti competitive with other places in Europe. Even at a low level have you ever seen the difference a good manager compared to a bad manager makes in a team? Now scale that up to decision makers such as CEO's and board executive members. If you dont compete on the same playing field for the worlds talent you will get the worse manager and industry across the board will suffer.

 

Mansion tax is a seperate issue but not everyone living in a big house has masses of wealth. In my view income is a better means as well as stamp duty and making it more robust (like the govt plans) by introducing a tax on buying through an offshore company (15%)

Bottom line is that you can tax teh rich OUT of this country. I'm not saying don't tax them, or tax them less, but it's about taxing enough and not too much for business to be unable/ unwilling to set up in this country when they can go to more "hospitable" countries and pay their tax there. So it's finding the balance.