Re: Here's a thought
"Yes you can get annoyed because you want those earning > £100,000 to pay 99% tax"
Slight problem here: No one is that much of a left winger to want that to happen.
Quick & Dirty Maths Example
Let's say you earn £100,000. For simplicity, lets say you get 45% tax on that.
Let's say I earn £30,000. For simplicity, lets say I get taxed 20% on that.
After tax you will have £55,000 left. I will have £24,000 left. On that basis, I haven't done too badly.
The problem is that this is a simplistic case, and it's not indicative of how the tax system works. You won't get taxed 45% on your £100,000:
- You start with your first £10,000, you pay nothing.
- Up until you earn £42,000, you will get taxed 20%.
- From £42,000 to £150,000 you will get taxed 40%.
- After £150,000, you get the 45% tax rate.
So let's rework the figures.
£100,000 - £10,000 = £90,000 <- this is your taxable figure.
20% on your £32,000 earnt = £6,400
40% on the £58,000 earnt = £23,200
You will have paid £29,600 on your income, not the £55,000 that the headline tax rate of 45% makes you think you would be taxed. Meaning you have, left, £70,400. Even then this figure is going to be wrong, taking in to account these very rough figures etc. But there's also another one point to consider: Tax Schemes. Not all tax schemes are illegal, so they do get used by those who can afford to be in them. A Tax Scheme for someone on basic rate isn't advantageous.
Whatsmore, there's also the consideration of expenses that can be taken from the tax bill. It isn't beyond possibility that your £29,600 tax bill could be reduced to £600. Hell, HMRC could even end up paying you.
So no. The point is people aren't pissed off that someone earning big bucks should be taxed 99%. The point is those who earn more have more avenues available to them to pay less tax. There are so many loop holes created and closed yearly in the UK, any accountant or tax lawyer will tell you that. Once the burden of tax, or the ability to choose to pay less tax, becomes a reality for those on higher incomes it means the burden is passed down to the majority who aren't in a position to benefit from paying less tax.
Yes, there is a high number of the population who don't earn enough to pay tax, but that doesn't mean that's a good thing. If anything that's a serious problem. Not because of less tax receipts but the fact they're in a position where taxing them would impede on their existance. The whole "heat or eat" problem faced by millions in this country. And those higher earners who remove themselves from paying the exact amount they should be paying compound the problem, because the money has to come from somewhere. And, the sad reality is that most of those high earners are in positions to gently warm the palms of others in one way or another to make sure this perverse situation is kept going.
Biting the hand that feeds IT
