Sunday 9 February 2014

Dear Tory’s… Don’t you trust us with all the facts about tax?

Something that really pissed me off on an episode of BBC’s Question Time was opposition to the 50% tax rate, because when national insurance contributions are added this means that a person would be paying 52% tax, which might apparently be a hindrance to an individual’s aspiration to try to earn a salary over £150,000.

Well most people don’t pay 2% national insurance contributions they pay 12%; only people earning over £797 per week pay 2% and people earning under it pay 12%. £797 per week equals 41,444 per year. However as the 40% tax band kicks in at £31,886 per year, this means that when 40% income tax plus 12% national insurance are added, people are paying 52% tax on all earnings between £31,886 and £41,444 per year already.

This also means that people earning between £41,444.01 and £150,000 are paying 42% on earning’s in this range and people earning over £150,000 are at present paying 47% tax on earnings over £150,000.

And I always thought that a progressive tax system was where richer people paid more not less because they could afford it, but as we see here people earning over £41,444 are paying a lower rate than people earning less than £41,444. The only thing which is even more stupid than this is that the people who reduced the 50% tax rate down to 45% didn't think we’d notice this.

This proves where the typical Tory’s priorities lie; making middle earners pay more to give a tax cut to their millionaire mates…

Well I have an idea; instead of increasing the 45% tax rate back to 50%, increase tax on the rich by replacing the regressive national insurance bands with a flat rate of 10%, then people earning between £31,996 and £41,444 won’t be paying a higher rate than the minority earning a six figure salary; thus nullifying in the process the argument that high taxes on the rich are bad for business because thousands of smaller business owners will have been given a slight tax cut in the process. The tax difference may be small, 2% opposed to 5% but it would positively impact far more people so there’s a much better chance of someone being able to do some good with it, and the reduction would (at least partly) be cancelled out by the fact that people who were once paying 2% would now be paying 10%. 

No comments:

Post a Comment