Heheheh. This thread shows how little folks understand taxes. I suppose that’s how the tax people like it. 8)
The 50% proposal basically means that anything that anyone earns OVER £100,000 in a year will be taxed at 50%.
The first £100,000 will be taxed in the exact same way for everybody, irrespective of total earnings.
Here’s an example:
A person earns exactly £150,000 per year. They will pay the following taxes (using 2 year old tax data - lazyness ):
Payable Rate On
Lower tax band £202.00 10% £2,020.00
Basic tax band £6,463.60 22% £29,380.00
Higher tax band £45,542.00 40% £113,855.00
You will note that the right-most column adds up to 145,255.00, which when you add the personal allowance (tax free sum) results in you getting exactly 100,00.
(the left money column shows how much tax they’d make in total) - totaling 52,207.60 paid in tax.
Now compare that to to what happens if you implement a 50% tax band at 100k:
Payable Rate On
Lower tax band £202.00 10% £2,020.00
Basic tax band £6,463.60 22% £29,380.00
Higher tax band £25,542.00 40% £63,855.00
Very High Band £25,000.00 50% £50,000.00
Total tax paid on that one: 57,207.60
So you’d only be paying £4,000 more in tax in this case study.
Basically the only people this is going to go NEAR affecting is the very VERY big earners (CEO’s of large corporations) - but remember, the top few percent of people earn the most money!!! Rest assured it will make money (and the cost to implement should really be negligble).
Note the “average” salary in the UK is about £24,000. I’m not sure which method of averaging that represents (mean, medium or mode), but I can tell you that it’s a long way blow the £30,000+ bracket where higher taxes begin.
Onto the inheritance-tax point:
Well SOMEONE has to be the wealthiest.
Can’t have everyone being equal now or we’d all be red pinko evil commie types.
I’d state that this tax limit should raise with inflation (just like income tax limits do). Ah here we are:
hmrc.gov.uk/cto/customerguide/page15.htm
Yep the threshold has been increasing over time.
They even give you a full six to seven months (minimum) to figure it all out following the death. They’re not heartless money grabbing accountants after all!
One other point about taxes in the UK. Don’t forget that you pay 17.5% toward just about anything you buy. Good old VAT. I do love Stealth taxes