50p tax rate
29 November 2012, 03:01 PM
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50p tax rate
An interesting article for all the TAX THE RICH!!! socialists. It turns out that instead of just sitting there and taking it, the well off simply say sod off and move, reducing the amount the taxman actually collects. 2/3 of the people earning over 1 million quid disappeared
The Laffer curve alive and well and no surprise to any economically literate person (i.e. which excludes all socialists). Actual evidence that tax the rich DOESN'T WORK. When will these idiot politicians learn?
http://www.telegraph.co.uk/news/poli...-tax-rate.html
The Laffer curve alive and well and no surprise to any economically literate person (i.e. which excludes all socialists). Actual evidence that tax the rich DOESN'T WORK. When will these idiot politicians learn?
http://www.telegraph.co.uk/news/poli...-tax-rate.html
29 November 2012, 03:50 PM
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i find it hard to believe 16,000 Millionairs are paying anywhere near 50% tax in the first place
or maybe they are on PAYE -- which again, find hard to believe
or maybe they are on PAYE -- which again, find hard to believe
29 November 2012, 04:03 PM
#5
An oldie but goodie
Suppose everyday, 10 men go to dinner. The bill for all ten comes to $100. If it were paid the way we pay our taxes, the first four men would pay nothing; the fifth would pay $1; the sixth would pay $3; the seventh $7; the eighth $12; the ninth $18. The tenth man (the richest) would pay $59.
The 10 men ate dinner in the restaurant every day and seemed quite happy with the arrangement until the owner threw them a curve. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily meal by $20.” Now dinner for the 10 only costs $80.
The first four are unaffected. They still eat for free. Can you figure out how to divvy up the $20 savings among the remaining six so that everyone gets his fair share? The men realize that $20 divided by 6 is $3.33, but if they subtract that from everybody’s share, then the fifth man the sixth man would end up being paid to eat their meal.
The restaurant owner suggested that it would be fair to reduce each man’s bill by roughly the same amount and he proceeded to work out the amounts each should pay.
And so the fifth man paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving the tenth man with a bill of $52 instead of $59. Outside the restaurant, the men began to compare their savings. “I only got a dollar out of the $20,” declared the sixth man pointing to the tenth, “and he got $7!” “Yeah, that’s right,” exclaimed the fifth man. I only saved a dollar, too. It’s unfair that he got seven times more than me!” “That’s true,” shouted the seventh man. “Why should he get $7 back when I got only $2? The wealthy get all the breaks.” “Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor.”
The nine men surrounded the tenth and beat him up. The next night he didn’t show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They were $52 short!
And that, boys and girls and politicians, is how the tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore. There are lots of good restaurants in Switzerland and the Caribbean
The 10 men ate dinner in the restaurant every day and seemed quite happy with the arrangement until the owner threw them a curve. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily meal by $20.” Now dinner for the 10 only costs $80.
The first four are unaffected. They still eat for free. Can you figure out how to divvy up the $20 savings among the remaining six so that everyone gets his fair share? The men realize that $20 divided by 6 is $3.33, but if they subtract that from everybody’s share, then the fifth man the sixth man would end up being paid to eat their meal.
The restaurant owner suggested that it would be fair to reduce each man’s bill by roughly the same amount and he proceeded to work out the amounts each should pay.
And so the fifth man paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving the tenth man with a bill of $52 instead of $59. Outside the restaurant, the men began to compare their savings. “I only got a dollar out of the $20,” declared the sixth man pointing to the tenth, “and he got $7!” “Yeah, that’s right,” exclaimed the fifth man. I only saved a dollar, too. It’s unfair that he got seven times more than me!” “That’s true,” shouted the seventh man. “Why should he get $7 back when I got only $2? The wealthy get all the breaks.” “Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor.”
The nine men surrounded the tenth and beat him up. The next night he didn’t show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They were $52 short!
And that, boys and girls and politicians, is how the tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore. There are lots of good restaurants in Switzerland and the Caribbean
29 November 2012, 04:13 PM
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An interesting article for all the TAX THE RICH!!! socialists. It turns out that instead of just sitting there and taking it, the well off simply say sod off and move, reducing the amount the taxman actually collects. 2/3 of the people earning over 1 million quid disappeared
The Laffer curve alive and well and no surprise to any economically literate person (i.e. which excludes all socialists). Actual evidence that tax the rich DOESN'T WORK. When will these idiot politicians learn?
http://www.telegraph.co.uk/news/poli...-tax-rate.html
The Laffer curve alive and well and no surprise to any economically literate person (i.e. which excludes all socialists). Actual evidence that tax the rich DOESN'T WORK. When will these idiot politicians learn?
http://www.telegraph.co.uk/news/poli...-tax-rate.html
I see if I can find a link
29 November 2012, 04:15 PM
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I keep saying this 
far better to tax everybody the same %age rate over a basic tax free amount, say £10k. The majority then pay no tax whilst everyone else pays the same %age. We can then get rid of all those f*cking complicated tax laws + all those ***** employed at HMRC ... win/win 
TX.
far better to tax everybody the same %age rate over a basic tax free amount, say £10k. The majority then pay no tax whilst everyone else pays the same %age. We can then get rid of all those f*cking complicated tax laws + all those ***** employed at HMRC ... win/win TX.
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29 November 2012, 04:15 PM
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29 November 2012, 04:19 PM
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I keep saying this far better to tax everybody the same %age rate over a basic tax free amount, say £10k. The majority then pay no tax whilst everyone else pays the same %age. We can then get rid of all those f*cking complicated tax laws + all those ***** employed at HMRC ... win/win
TX.
far better to tax everybody the same %age rate over a basic tax free amount, say £10k. The majority then pay no tax whilst everyone else pays the same %age. We can then get rid of all those f*cking complicated tax laws + all those ***** employed at HMRC ... win/win TX.
Can we also abolish RFL as well, and put the extra on petrol?
29 November 2012, 04:20 PM
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29 November 2012, 05:23 PM
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It's true, I very nearly thought about leaving the country due to this mad 50% tax rate - courtesy of the Labour Party!!
They just did it to make the Tories look stupid, which is bonkers as they are doing a fine job of that, all by themselves!!
They just did it to make the Tories look stupid, which is bonkers as they are doing a fine job of that, all by themselves!!
29 November 2012, 06:06 PM
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Errr, that has nothing to do with trickle down, he is talking about the tax rate for top earners should be 35%. Couldn't agree more!
29 November 2012, 06:13 PM
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It's not hard is it ... you earn £100k take off £10k tax free amount and pay 35% on £90k = £31.5k in tax. If you earn £20k on the same basis you'll pay £3.5k tax. Simple and reasonable imho, we all pay the same %age which results in the rich paying more tax vs the poor who pay less.
TX.
TX.
29 November 2012, 07:48 PM
#14
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The 50% tax rate is immoral and was a disgusting parting shot from Gordong Brown, Ed *****. They were all smirking in Parliament when they announced it as it was an obvious political trap for the Tories.
I've always paid my tax and never looked at ways to avoid. This was a step too far and I decided to take steps. As a result I now pay LESS tax than I did pre 50% rate, so hmrc now gets less money from me.
People like me can't afford to leave the country when the tax rate becomes punitive but we do get motivated to pursue mechanisms to avoid. I would have carried on paying my 40+% tax and never looked at avoidance measures if the 50% rate had not been introduced.
The upside for me is that the 50% rate motivated me to investigate tax avoidance and I now pay a lot less than the 40% I was paying before.
Good for me but not good for hmrc or the country.
I've always paid my tax and never looked at ways to avoid. This was a step too far and I decided to take steps. As a result I now pay LESS tax than I did pre 50% rate, so hmrc now gets less money from me.
People like me can't afford to leave the country when the tax rate becomes punitive but we do get motivated to pursue mechanisms to avoid. I would have carried on paying my 40+% tax and never looked at avoidance measures if the 50% rate had not been introduced.
The upside for me is that the 50% rate motivated me to investigate tax avoidance and I now pay a lot less than the 40% I was paying before.
Good for me but not good for hmrc or the country.
29 November 2012, 07:51 PM
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The 50% tax rate is immoral and was a disgusting parting shot from Gordong Brown, Ed *****. They were all smirking in Parliament when they announced it as it was an obvious political trap for the Tories.
I've always paid my tax and never looked at ways to avoid. This was a step too far and I decided to take steps. As a result I now pay LESS tax than I did pre 50% rate, so hmrc now gets less money from me.
People like me can't afford to leave the country when the tax rate becomes punitive but we do get motivated to pursue mechanisms to avoid. I would have carried on paying my 40+% tax and never looked at avoidance measures if the 50% rate had not been introduced.
The upside for me is that the 50% rate motivated me to investigate tax avoidance and I now pay a lot less than the 40% I was paying before.
Good for me but not good for hmrc or the country.
I've always paid my tax and never looked at ways to avoid. This was a step too far and I decided to take steps. As a result I now pay LESS tax than I did pre 50% rate, so hmrc now gets less money from me.
People like me can't afford to leave the country when the tax rate becomes punitive but we do get motivated to pursue mechanisms to avoid. I would have carried on paying my 40+% tax and never looked at avoidance measures if the 50% rate had not been introduced.
The upside for me is that the 50% rate motivated me to investigate tax avoidance and I now pay a lot less than the 40% I was paying before.
Good for me but not good for hmrc or the country.
(You'll get a beasting now for admitting you avoid tax....)
29 November 2012, 07:55 PM
#16
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Beast away!
Nothing I do is illegal and everything is adviced by my accountant.
Everybody uses tax avoidance to some extent in that nobody pays MORE tax then they need to legally pay. It is of course a grey area....
Nothing I do is illegal and everything is adviced by my accountant.
Everybody uses tax avoidance to some extent in that nobody pays MORE tax then they need to legally pay. It is of course a grey area....
29 November 2012, 08:10 PM
#17
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and if you are paying less now Ding, - as you have sort of admitted you are not a person who habitually seeks to lower his tax rate (to your credit)
what do you think of the articles statistics, 16,000 millionares paying 40% or even 35% tax suddenly deciding to leave, wreaks of bvllsh1t to me
absolutly needs to be a nationwide converstion about tax reciepts and welfare spending
but these easy friday afternoon articles by overpaid jurnos (prob written down the pub) are not the way forward
what do you think of the articles statistics, 16,000 millionares paying 40% or even 35% tax suddenly deciding to leave, wreaks of bvllsh1t to me
absolutly needs to be a nationwide converstion about tax reciepts and welfare spending
but these easy friday afternoon articles by overpaid jurnos (prob written down the pub) are not the way forward
29 November 2012, 08:17 PM
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29 November 2012, 08:24 PM
#19
I think the 50p rate is ridiculous, as is 40p really, as actually it is nearer 50p due to NI which is just income tax by another name.
We need to pay tax, the trouble is the poor pay very little or take from the system, the rich have clever accountants who manage to contrive it so they pay less, or in some cases nothing so the burden gets dumped on those who cant avoid it, the PAYE earners on decent money.
These companies avoiding tax need taking to task, one way or another, loopholes need closing amd the burden needs spreading, the cash economy needs tackling so those that handle cash actually pay some tax.
HMRC run out of ideas very quickly so they just lower the 40p rate to catch more PAYE monkeys, the government removes CB, they stick another few pence on fuel and all the while companies avoid tax whilst also contriving prices up. They are talking about alcohol pricing and putting parking up, all stick and no carrot.
We need to pay tax, the trouble is the poor pay very little or take from the system, the rich have clever accountants who manage to contrive it so they pay less, or in some cases nothing so the burden gets dumped on those who cant avoid it, the PAYE earners on decent money.
These companies avoiding tax need taking to task, one way or another, loopholes need closing amd the burden needs spreading, the cash economy needs tackling so those that handle cash actually pay some tax.
HMRC run out of ideas very quickly so they just lower the 40p rate to catch more PAYE monkeys, the government removes CB, they stick another few pence on fuel and all the while companies avoid tax whilst also contriving prices up. They are talking about alcohol pricing and putting parking up, all stick and no carrot.
29 November 2012, 08:26 PM
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It does smell fishy indeed. The mega rich may well be able to leave but I doubt there are that many of them. And as you said the real rich were probably never paying that %age of tax and were never going to have to pay 50% due to the complex instruments they cab afford to employ.
That then leaves 'high earners', how can these people leave? They are either professionals or run businesses based here in the UK.
I only personally know one person who has left and is now domiciled in Dubai. He falls somewhere in between high earners and mega rich ie is worth about £50 million. However the cost of his tax avoidance is high ie he lives in Dubai whilst his daughters are in the UK. No amount of money is worth being apart from your family for.
That then leaves 'high earners', how can these people leave? They are either professionals or run businesses based here in the UK.
I only personally know one person who has left and is now domiciled in Dubai. He falls somewhere in between high earners and mega rich ie is worth about £50 million. However the cost of his tax avoidance is high ie he lives in Dubai whilst his daughters are in the UK. No amount of money is worth being apart from your family for.
29 November 2012, 08:54 PM
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The tax thresholds are so adverse for me that to employ a tradesman at a negotiated discounted rate of £19/h+VAT (at which they claimed they weren't making profit on the job and have still pissed me around by going to lots of other jobs in priority to mine) I have to earn £60/h to pay them. Unless they do a better and/or faster job than I can (and not all do), I may as well do it myself as it is a nice change from a rather more stressful job and gets me fit at the same time. I didn't think when I was training to be a doctor that I would save money by labouring on my own house or changing my own wheel bearings/brakes etc, but if HMRC take away 62% of every extra pound I earn then I will just work less in paid work to thwart their greediness and not employ anyone else to do anything for me I can't do for myself.
Last edited by john banks; 29 November 2012 at 08:55 PM.
29 November 2012, 09:02 PM
#22
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yep, the HMRC declare the amount of people with an income of over a million quid
that is NOT the same as declaring what % of tax they pay on it
com'n this is basic stuff
are you seriously suggesting that those 16,000 millionaires all paid 40% tax
have you been listening to the fairies at the bottom of the garden
that is NOT the same as declaring what % of tax they pay on it
com'n this is basic stuff
are you seriously suggesting that those 16,000 millionaires all paid 40% tax
have you been listening to the fairies at the bottom of the garden
29 November 2012, 09:11 PM
#23
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but you are quite right -- what price to sacrifice your family life -- no cashpoint in heaven
just shows you can never be too rich or pay too little tax
29 November 2012, 09:56 PM
#24
It does smell fishy indeed. The mega rich may well be able to leave but I doubt there are that many of them. And as you said the real rich were probably never paying that %age of tax and were never going to have to pay 50% due to the complex instruments they cab afford to employ.
That then leaves 'high earners', how can these people leave? They are either professionals or run businesses based here in the UK.
I only personally know one person who has left and is now domiciled in Dubai. He falls somewhere in between high earners and mega rich ie is worth about £50 million. However the cost of his tax avoidance is high ie he lives in Dubai whilst his daughters are in the UK. No amount of money is worth being apart from your family for.
That then leaves 'high earners', how can these people leave? They are either professionals or run businesses based here in the UK.
I only personally know one person who has left and is now domiciled in Dubai. He falls somewhere in between high earners and mega rich ie is worth about £50 million. However the cost of his tax avoidance is high ie he lives in Dubai whilst his daughters are in the UK. No amount of money is worth being apart from your family for.
Completely agree, with that kind of wealth, you can do anything, buy anything and go anywhere, if someones takes a chunk of it in tax, so what ? why have a family if you live apart due to money, I can understand that if needs must, or temporarily to impove your lot but on a permanent basis, I really dont get it, I would have thought money buys you immunity from stuff like that, why compromise when you dont have to ?
I dont understand the profit at any cost thing and the ruthlessness of people like Phillip Green, he spirited a Billion quid away, for what, he already has everything he could possibly need materially, he is sixty years old, he may live another twenty to thirty years, surely you get to a point where enough is enough, or does it transcend money, is money a byproduct of something else ? if so, why not do something philanthropic, if you are going to avoid loads of tax, why not do something worthy with the proceeds, cut out the bungling, wasteful government and do your own thing, and I dont mean 15 grand here and there, I mean proper sums, die with nothing, as you came into the world, as it is, everyone thinks he is a **** !
Surely you run out of stuff to buy, do and see, I am by no means rich but there isnt much I want for, I like money but mega sums dont interest me, enough to pay the bills, do fun stuff, replace broken stuff, look after my kids and not be worrying about money all the bloody time.
29 November 2012, 09:58 PM
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To be fair, higher rate tax payers are 'only' taxed at an additional 10%
Basic rate tax is 32% PAYE (20+12)
Higher rate tax is 42% PAYE (40+2)
When you look at the personal allowance rules,
Someone earning £25k pays around 22% tax (£19.5k take home)
Someone earning £50k pays around 28% tax (£36k take home)
Someone earning £100k pays around 35% tax (£65k take home)
The average wage worker in the UK pays a little more than 1/5 of their salary in tax. So in all fairness, I don't think we are taxed that heavily PAYE in the UK. There is obviously pension tax relief to be taken into account too. 40% pension tax relief is a very good deal and something which we should be happy about. Any higher rate tax payer not throwing money into their pension pot needs their head looking at, free money and instead of giving it to the taxman, you're helping yourself with provisions for old age. It's relief at 40% going in but more than likely for most anyway will be taxed at only 20% going out when you come to draw. Also the 25% tax free lump sum also.
I think we have it pretty good to be fair. One thing that does **** me off though is that they have not increased the thresholds for higher rate tax for a few years now. We are getting no benefit from the personal allowance increases as they keep bringing the thresholds down to offset. A sneaky sneaky move.
Basic rate tax is 32% PAYE (20+12)
Higher rate tax is 42% PAYE (40+2)
When you look at the personal allowance rules,
Someone earning £25k pays around 22% tax (£19.5k take home)
Someone earning £50k pays around 28% tax (£36k take home)
Someone earning £100k pays around 35% tax (£65k take home)
The average wage worker in the UK pays a little more than 1/5 of their salary in tax. So in all fairness, I don't think we are taxed that heavily PAYE in the UK. There is obviously pension tax relief to be taken into account too. 40% pension tax relief is a very good deal and something which we should be happy about. Any higher rate tax payer not throwing money into their pension pot needs their head looking at, free money and instead of giving it to the taxman, you're helping yourself with provisions for old age. It's relief at 40% going in but more than likely for most anyway will be taxed at only 20% going out when you come to draw. Also the 25% tax free lump sum also.
I think we have it pretty good to be fair. One thing that does **** me off though is that they have not increased the thresholds for higher rate tax for a few years now. We are getting no benefit from the personal allowance increases as they keep bringing the thresholds down to offset. A sneaky sneaky move.
Last edited by LEO-RS; 29 November 2012 at 10:09 PM.
29 November 2012, 10:09 PM
#27
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To be fair, higher rate tax payers are 'only' taxed at an additional 10%
Basic rate tax is 32% PAYE (20+12)
Higher rate tax is 42% PAYE (40+2)
When you look at the personal allowance rules,
Someone earning £50k pays around 28% of that (£36k take home)
Someone earning £100k pays around 35% of that (£65k take home)
So in all fairness, I don't think we are taxed that heavily PAYE in the UK. There is obviously pension tax relief to be taken into account too. 40% pension tax relief is a very good deal and something which we should be happy about. Any higher rate tax payer not throwing money into their pension pot needs their head looking at, free money and instead of giving it to the taxman, you're helping yourself with provisions for old age. It's relief at 40% going in but more than likely for most anyway will be taxed at only 20% going out when you come to draw. Also the 25% tax free lump sum also.
I think we have it pretty good to be fair. One thing that does **** me off though is that they have not increased the thresholds for higher rate tax for a few years now. We are getting no benefit from the personal allowance increases as they keep bringing the thresholds down to offset. A sneaky sneaky move.
Basic rate tax is 32% PAYE (20+12)
Higher rate tax is 42% PAYE (40+2)
When you look at the personal allowance rules,
Someone earning £50k pays around 28% of that (£36k take home)
Someone earning £100k pays around 35% of that (£65k take home)
So in all fairness, I don't think we are taxed that heavily PAYE in the UK. There is obviously pension tax relief to be taken into account too. 40% pension tax relief is a very good deal and something which we should be happy about. Any higher rate tax payer not throwing money into their pension pot needs their head looking at, free money and instead of giving it to the taxman, you're helping yourself with provisions for old age. It's relief at 40% going in but more than likely for most anyway will be taxed at only 20% going out when you come to draw. Also the 25% tax free lump sum also.
I think we have it pretty good to be fair. One thing that does **** me off though is that they have not increased the thresholds for higher rate tax for a few years now. We are getting no benefit from the personal allowance increases as they keep bringing the thresholds down to offset. A sneaky sneaky move.
Then I must need by head examined. Show me a private pension scheme that makes sense even with the tax relief.
29 November 2012, 10:31 PM
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Take a £50k earner for example, he pays 10% of his salary into his pension and the company match his 10% contribution, so each year, he is getting 20% of his salary paid into his pension pot. The effective benefits package for him is £55k so he has gained a £5k 'payrise' by opting into this scheme. Take it, he costs his company £55k, don't take it, he costs his company £50k. Free money, only a fool refuses free money.
£10,000 is going into his pot, however, the real cost to him is 60% of the £5k. He is generating £10k from a contribution of £3,000
Most company pension schemes also have life assurance policies attached to them which will pay out 3-5x annual salary tax free, along with the full contents of your pension pot to that date to your beneficiaries. Even if you die before retirement, the whole lot will go to your beneficiary tax free. Make it to retirement and withdraw the full 25% tax free cash and then use a drawdown on the remainder.
I fail to see why in this example, a £3k outlay for a £10k investment isn't a good deal? By refusing to join this kind of scheme, you are in effect making your employer rub his hands and shout out yes, there's another sucker.
Last edited by LEO-RS; 01 December 2012 at 08:25 AM.
29 November 2012, 10:47 PM
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Taking my post further,
So for every £10,000 going into your pension pot, it's costing you 30% in real terms. Consider the fact that you get to take 25% of your entire pension pot tax free upon retirement, this makes pensions a very sweet deal. For every £30k of real time contributions, you are going to get £25k of that back as soon as you retire. The remainder, £5k of your own contributions + the remainder 70% + growth is left to generate a pension income.
Higher rate tax relief should be taken advantage of without a shadow of a doubt.
So for every £10,000 going into your pension pot, it's costing you 30% in real terms. Consider the fact that you get to take 25% of your entire pension pot tax free upon retirement, this makes pensions a very sweet deal. For every £30k of real time contributions, you are going to get £25k of that back as soon as you retire. The remainder, £5k of your own contributions + the remainder 70% + growth is left to generate a pension income.
Higher rate tax relief should be taken advantage of without a shadow of a doubt.
Last edited by LEO-RS; 01 December 2012 at 08:26 AM.
29 November 2012, 10:55 PM
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Yes, I agree, they hammer you in other ways but VAT is a choice spend and again, CB only applies to those with children. The smart man if its close anyway will reduce their taxable income to £49,999 and fill up their pension pots in order to keep child benefits. Not an option if you're earning £65k+ but certainly if you're below that, you should be thinking of ways to make taxable earnings £49,999, either through pensions or childcare vouchers or any other salary sacrifice scheme.