Budget 2012

[sten_super]

Given that the 50p rate didn't bring in anything like what was hoped for and the evidence put forward indicates that move revenue would be generated at 45p, it's clearly the correct route to go down yes?

My understanding is that this isn't the case (although I may be wrong - I've not studied the detail yet). My reading is that the 50p tax rate increased a given direct taxation measure by approximately £1bn (much less than was envisaged by Labour when it was introduced). Osbourne has said that cutting that rate to 45p would only cost £100m (i.e. it would bring in £900m rather than the £1bn measured under the 50p rate). I'd assume then that his argument is that it will have other (positive) impacts on taxation that aren't under the remit of the initial study - i.e. it will encourage business investment (as firms will know that they will be able to hire workers at a supposedly lower rate given the lower tax rate) - which will outweigh this direct £100m cost.

I notice that they've announced a 'consultation' on merging income tax and national insurance - no commitment to anything though.

 

[Marlton & Hove Albion]

How the hell does the middle class in the UK make ends meet? Every time I get those uncontrollable home sickness pains, I remind myself that the UK (like most of Europe) is taxing itself into oblivion. Europeans are now conditioned (and fully accept) a principle of paying the Government 50% of their wages in tax and with whats left pay 5 quid for a gallon of petrol and 3 quid for 16oz of slightly alcoholic hop infused water. I'm amazed the debate isn't about when and where the revolution will begin? Clearly it's FAR from perfect in the good old US of A but mama mia, why is it acceptable to work from Jan 1st to June 30th each year for the benefit of the state?

 

[Westdene Seagull]

Someone earning £200,000 a year now gets to keep an extra £200 a month (bringing home circa £10,000 a month). You think that earner will be swung by that sort of figure? Meanwhile, loads of middle income families are having child benefit removed. They'll notice that, I can tell you.

Ultimately, he's phasing out child benefit whilst giving top earners a hefty tax cut.

Make up your mind !!!!! How is £200 in a £10k income a HEFTY tax cut. You're letting your hatred of the Tories get in the way of the figures.

Those earning over £150k will get a 5% reduction. Those under £100k are going to get a 23% increase in personal allowance. I'd say that somewhat favours lower paid people !

 

[ROSM]

I'm not trolling anything. I just don't like your politics of envy and I'm debating it. You still didn't answer my initial assertation.

You use phrases like politics of envy. It's not. And until you stop being blinkered on this then there is limited point dealing with your initial assertion which has been covered on NSC many times before. Means testing bus passes and heating will cost more than they'll save given at least 7 variables (age, income, outgoings, location + distance from shopping hubs, health, property type etc)

 

[Simster]

Make up your mind !!!!! How is £200 in a £10k income a HEFTY tax cut. You're letting your hatred of the Tories get in the way of the figures.

Those earning over £150k will get a 5% reduction. Those under £100k are going to get a 23% increase in personal allowance. I'd say that somewhat favours lower paid people !

£200 is HEFTY to those on <£100k (most of us) but small beer to high earners, and that is my point. Not really that hard to understand, surely?

 

[Simster]

I notice that they've announced a 'consultation' on merging income tax and national insurance - no commitment to anything though.

Any government that does this would certainly earn my respect. It is absurd that a distinction is made, and slightly dishonest.

 

[Bozza]

And whilst doing that, ponder on why millions are now paying more so Millionaires pay less? 14,000 millionaires will nowpay on average 10k less per person per annum.

Good point. To further illustrate it, could you please detail how much tax someone at the lower end of your millionaires range earning, say £1m per annum, pays into the exchequer and compare it with one of your £55k a year middle England lot.

Assume all income is simple PAYE-d. Doesn't have to be specific - back of a fag packet numbers will do.

 

[ROSM]

Make up your mind !!!!! How is £200 in a £10k income a HEFTY tax cut. You're letting your hatred of the Tories get in the way of the figures.

Those earning over £150k will get a 5% reduction. Those under £100k are going to get a 23% increase in personal allowance. I'd say that somewhat favours lower paid people !

Those over 150k will get both the 23% increase in personal allowance and a 5% reduction. Win Win (unless they have kids)

 

[ROSM]

Good point. To further illustrate it, could you please detail how much tax someone at the lower end of your millionaires range earning, say £1m per annum, pays into the exchequer and compare it with one of your £55k a year middle England lot.

Assume all income is simple PAYE-d. Doesn't have to be specific - back of a fag packet numbers will do.

I've taken that from our internal analysts figures. I'll get back to you on the breakdown when I can purloin it from his desk.

But clearly they dont pay any tax as they all are really successful at avoiding it according to the Chancellor

 

[Common as Mook]

You use phrases like politics of envy. It's not. And until you stop being blinkered on this then there is limited point dealing with your initial assertion which has been covered on NSC many times before. Means testing bus passes and heating will cost more than they'll save given at least 7 variables (age, income, outgoings, location + distance from shopping hubs, health, property type etc)

Let's be honest - you are as blinkered as I am. I haven't been involved in any discussions on means testing so it's a first for me. Just find it quite bizarre that previous governments decided it would be a good idea to blanketly (if that's a word) give free bus passes and heating allowances to everyone, regardless of how much they earn.

 

[Bozza]

I've taken that from our internal analysts figures. I'll get back to you on the breakdown when I can purloin it from his desk

I'll do it for you.

A £1m earner will be paying c£430,000 in tax per year (with a 45% upper rate).
A £55k earner will be paying c£11,500 in tax per year.

I get your point - just when are the government going to crack down on these big earners and have them contribute like the rest of us?

 

[Westdene Seagull]

You need to have a think about his one.

Someone earning £200,000 a year now gets to keep an extra £200 a month (bringing home circa £10,000 a month). You think that earner will be swung by that sort of figure? Meanwhile, loads of middle income families are having child benefit removed. They'll notice that, I can tell you.

A really morally bankrupt budget IMO. Same old shameful Tories. Who'd have thought the LibDems would let them do it? Feeble.

The HMRC site suggests people from £100k onwards lose the allowance ( it's not very clear though ! ).

Those over 150k will get both the 23% increase in personal allowance and a 5% reduction. Win Win (unless they have kids)

 

[Simster]

I'll do it for you.

A £1m earner will be paying c£430,000 in tax per year (with a 45% upper rate).
A £55k earner will be paying c£11,500 in tax per year.

I get your point - just when are the government going to crack down on these big earners and have them contribute like the rest of us?

I'm sure, equally, he gets your point. Yes, the wealthy chap pays lots more in tax already.

Would it be churlish to point out that this still leaves the £1m earning city trader £570,000 a year to do with what he pleases whereas the £55k head master has just £43,500 a year to play with?

We all understand that life isn't fair, but I just think that a fairer taxation system ought to go some way to redressing income inequality such as this.

 

[Titanic]

I'm sure, equally, he gets your point. Yes, the wealthy chap pays lots more in tax already.

Would it be churlish to point out that this still leaves the £1m earning city trader £570,000 a year to do with what he pleases whereas the £55k head master has just £43,500 a year to play with?

We all understand that life isn't fair, but I just think that a fairer taxation system ought to go some way to redressing income inequality such as this.

So the £55k earner pays approx 21% tax on his smaller income, and the £1m earner appprox 43% on his bigger income. Unfair?

 

[Bozza]

I'm sure, equally, he gets your point. Yes, the wealthy chap pays lots more in tax already.

Would it be churlish to point out that this still leaves the £1m earning city trader £570,000 a year to do with what he pleases whereas the £55k head master has just £43,500 a year to play with?

We all understand that life isn't fair, but I just think that a fairer taxation system ought to go some way to redressing income inequality such as this.

I'm genuinely not sure what your "this" is in your closing sentence.

However, those who moan about "hefty tax cuts for the rich fat cats" would do well to remember that not only does a "fat cat" contribute more in absolute terms, but also surrenders a far higher proportion of their gross earnings in tax. I know I wouldn't like to give up over 40% of my entire income to the exchequer as Mr. Million-quid-a-year has to.

 

[The Antikythera Mechanism]

The HMRC site suggests people from £100k onwards lose the allowance ( it's not very clear though ! ).

Believe me it's clear - earn over £100k p/a and all tax allowances vanish.

 

[ROSM]

I'll do it for you.

A £1m earner will be paying c£430,000 in tax per year (with a 45% upper rate).
A £55k earner will be paying c£11,500 in tax per year.

I get your point - just when are the government going to crack down on these big earners and have them contribute like the rest of us?

So the top earners have a higher residual income and what is a relatively small tax improvement to them could have more a higher impact improvement at a lower strata of income given that the amount of income paid back into the UK economy diminishes by 35% based on incomes over 130k. Yes top earners pay more tax - they also have greater propensity to be tax efficient.

Btw - I think your figures are over stated by an average of c50k given actual receipts against projected income based on pure thresholds but your diretional points is still right.

 

[Westdene Seagull]

Believe me it's clear - earn over £100k p/a and all tax allowances vanish.

Thank you - so my original post was correct !

 

[ROSM]

Believe me it's clear - earn over £100k p/a and all tax allowances vanish.

You're correct, the latest update which I've just loaded was clearer than the initial version put out earlier.

 

[larus]

I'm sure, equally, he gets your point. Yes, the wealthy chap pays lots more in tax already.

Would it be churlish to point out that this still leaves the £1m earning city trader £570,000 a year to do with what he pleases whereas the £55k head master has just £43,500 a year to play with?

We all understand that life isn't fair, but I just think that a fairer taxation system ought to go some way to redressing income inequality such as this.

The perception is that the Labour/ New Labour/ Left Wingers (whatever term you wish to classify people with these views), think that it's right to penalise those who are successful.

Yes, £570k is a huge amount of money, but then £430k is a f***ing shed-load of tax. That's about what 38 head masters would be paying combined.