50p tax rate - perception or impact

[Timster]

I made no attempt to do the maths because whether it is 3% or 1.379% is wholly irrelevant. Also, I have a job to do. (And I've got 2 Maths A-levels - A grade - from when A-levels were difficult).

The point is the rich can afford it - the poor can't. And there is no evidence of it disincentivising business - as I said before, most people falling within the 50p tax rate are wage earners - not entrepreneurs or businessman.

If you can point to any evidence of the 50p tax rate damaging our economy then please do.

[david_carnell]

Marmora Man Wrote:

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> The high salaried, comfortably off can, often, be

> just a few months away from being very poor - as

> their apparent wealth and assets depend upon

> regular, high, salary payments. The recession has

> demonstrated how quickly a high flying businesman

> on ?150K a year can, once redundant and unable to

> service the mortgage, school fees, car leasing

> costs and the like that give the appearance of

> wealth, have to give up these luxuries, cash in

> whatever assets they posses and downsize

> dramatically or even be made bankrupt.

Wait, what's that I can hear? In the background.....very faint......I think it just might be, yes, it is......the world's smallest violin playing.

Perhaps these people should stop mortgaging themselves to the hilt, stop sending little Johnny to Harrow and drive a cheaper car. The sorts of cutbacks you'd expect to make in a recession.

[Timster]

Quite, not being able to pay school fees does not count as being poor in my book.

And I missed MM's attempt to argue I'd conceded it was a bad idea to tax the City because it was booming - I was making the point that the 50p tax rate had not led to hordes of City-types heading to Zurich and New York.

[Loz]

But if it is 1.379% then the point is there are not very many of them. Even if it had worked as planned, the tax band would have only brought in an extra ?2.7bn - useful money in a recession, but hardly enough to make a real dent in the deficit.

Which is why you need to lower the bar of defining 'the rich' if you are going to make any sort of revenue out of them. The top 10 percentile of income falls at about ?45K. So, if you are going to get enough people to comprise 'the rich' to make such a tax bring in enough income, that is probably about where the point should fall.

[Timster]

which is not far off where the 40p tax rate starts. I don't really understand the point people are trying to make - I have no objection to taxing the top 3% rather than 1.5%. But if you make the cut-off point 45k all you're doing is effectively raising the 40p tax rate to 50p. There may be a case for that but I suspect it would seriously deflationary in a way a tax on the very highest earners is not.

[Loz]

My point is that a 50% rate is pretty much based in the politics of envy. It gains little - in fact it allegedly gains almost nothing. And if the top 10% of earners start at 45K then they *are* the highest earners. These top 10 percent already contribute 45% of the total income tax take.

It goes back to a post I made on a different thread a few months ago. A lot of people saying 'tax the rich' are probably not aware that they actually *are* the rich.

[david_carnell]

Well I'm not rich by any calculation on here. But I'm envious! That's the only reason I could think it right to tax those at the top end more, right? Thanks for that damning personality assessment, Loz.

On the subject of tax exiles fleeing Britain in the face of such unjust treatment I found this piece from last month by Peter Oborne quite apt:

A few weeks ago, I noticed an item in a newspaper saying that the business tycoon Sir Richard Branson was thinking of moving his headquarters to Switzerland. This move was represented as a potential blow to the Chancellor of the Exchequer, George Osborne, because it meant less tax revenue.

I couldn?t help thinking that in a sane and decent world such a move would be a blow to Sir Richard, not the Chancellor. People would note that a prominent and wealthy businessman was avoiding British tax and think less of him. Instead, he has a knighthood and is widely feted. The same is true of the brilliant retailer Sir Philip Green. Sir Philip?s businesses could never survive but for Britain?s famous social and political stability, our transport system to shift his goods and our schools to educate his workers.

Yet Sir Philip, who a few years ago sent an extraordinary ?1 billion dividend offshore, seems to have little intention of paying for much of this. Why does nobody get angry or hold him culpable? I know that he employs expensive tax lawyers and that everything he does is legal, but he surely faces ethical and moral questions just as much as does a young thug who breaks into one of Sir Philip?s shops and steals from it?

[Loz]

david_carnell Wrote:

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> Well I'm not rich by any calculation on here. But I'm envious! That's the only reason I could think

> it right to tax those at the top end more, right? Thanks for that damning personality assessment,

> Loz.

Well, if such a tax raises virtually zero money for the exchequer, what other conclusion could be made? Why else have the tax?

It works at both ends of the spectrum. Why are we taxing people under 15K when most of them get all the money back again in the form of benefits and tax credits? Entirely pointless exercise that just employs civil servants to shuffle papers around.

[Timster]

Of course, the Labour government introduced a new tax rate that raises virtually zero money just to have a go at bashing the rich. And the Tories kept it. Really? Think about that for a fraction of a second. The only reason some people are arguing that it does not raise money is because they have an ideological objection to it.

This from the Guardian:

The Treasury predicts that over the next five years the 50p tax rate will raise ?5.3bn more than it would have raised if the top rate of tax had remained at 45p, and ?12.6bn more than it would have raised if the top rate had stayed at 40p.

The commercial secretary to the Treasury Lord Sassoon revealed this information in answer to a parliamentary question tabled by Lord Ashcroft in November 2010. You can see it here (Column WA288)

[Timster]

What really irritates me about the tone of some of this is that, despite all the reasonable and objective arguments for taxing high earners or the wealthy more, some people object to it purely on a point of principle - as if the rich are some endangered species that are constantly being attacked and hounded by nasty Guardian reading types and jealous chavs and need special protection - and it's never the rich themselves that run these arguments - they know how lucky they are! It's gullible Daily Mail readers and the like who never have a chance of earning enough to pay a 50p rate.

[StraferJack]

Except with loz he is a nasty guardian adding type

[Marmora Man]

Timster Wrote:

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> This from the Guardian: The Treasury predicts that over the next five years the 50p tax rate will raise ?5.3bn more than it would have raised if the top rate of tax had remained at 45p, and ?12.6bn more than it would have raised if the top rate had stayed at 40p.

A specious quote Timster - it's a big number but the Guardian failed to point out that ?12.6bn represents less an 0.5% of projected government spending over the next five years. That's just a rounding error for Treasury. The 50p tax rate is therefore absolutely marginal in its impact on the deficit and governemnt spending. Hell, that sort of sum gets frittered away on useless IT projects most years without being noticed.

[StraferJack]

So 12 billion is near meaningless in the scheme of things? That will be news to some of the coal face workers losing their jobs because 500k needs to be cut from their area

Or an area you are familiar with mm. The nhs

Meaningless

12 billion matters to well off but when front line take the brunt it's merely a speck?

Ideological cant

I literally have sick in my mouth when I read some of this

[david_carnell]

Sounds like an argument for 60p.....

[Marmora Man]

SJ - if you feel sick that I consider ?12.6bn a small figure you need to become more aware. That is almost exactly the sum that the last administration wasted on the disastrous NHS IT system as revealed today. what makes me sick is that government spending is projected to increase to over ?500bn a year, with a substantial portion of that spend just servicing the debts run up by previous administrations.

Working within healthcare I'm very aware of the ?20bn target for savings - I'm also aware that it can be achieved if only the NHS (and politicians) would do the right thing. Consolidating hospitals onto fewer and better equipped sites would be a start - but the 5 year furore over the closing of Chase Farm A&E and shifting A&E services by 5 miles probably means that it will take time to happen. Within 10 miles of here we have three teaching hospitals - Guy's, St Thomas' and King's. All good hospitals but at least one could close without any impact on the health and wellbeing of the local community and, by doing so, save well over 5% of the savings target alone.

[StraferJack]

Why bother saving 20 billion if it's so relatively meaningless?

Did the nhs waste 12 billion on an it system or did private contractors not deliver?

I'm not against either private companies or savings. But whatever merits this government has, they are out to destroy the nhs. Not make savings. Not save money. But get rid

At least be honest about that

I "need to be more aware". Cheeky fekker

[mockney piers]

The nhs it debacle was diktat from TB. Nobody wanted it, there were no real require,nets other than a vague policy requirement that expensive consultants tried to fill.

Luckily it was reigned in by GB and is now an expensive aftermath as we pay off contracts.

Total cost, a totally wasted 4-5 billion.

Meaningless? Try telling that to anyone with prostate cancer whom NICE deem are unworthy of expensive new treatments as uneconomic!

[Loz]

Hang on. That's ?12.6 billion over five years. In other words, back to the ?2.7 per year I posted earlier, except multiplied by five to make it sound much bigger than it is. And the same ?2.7m a year that seems to be very, very over estimated.

Look I am willing to say that if the 50% rate brings in a significant amount of money (i.e. more than ?2bn a year), then fine, it works so keep it, Are all the pro-50% people here brave enough to say that if it doesn't (and that means less than ?1bn a year) then we should scrap it? We'll leave the middle as a place to argue over later.

Timster? SJ? DC?

[Marmora Man]

Meaningless? Try telling that to anyone with prostate cancer whom NICE deem are unworthy of expensive new treatments as uneconomic!

That's a meaningless statement (and I'd like to on record that I didn't use the word meaningless in any of my posts). Every case of terminal cancer (or other disease) is an individual tragedy - but nationally, and economically it is not a sensible use of scarce NHS funds to spend large amounts to extend life by a very few months, particularly if those few months are going to provide a very poor quality of life.

Taking this to an anecdotal level - I know of a case where a young woman spent the last five years of her, already compromised life, mostly in a coma, in pain and in a hospital bed undergoing countless, expensive and painful life prolonging procedures because of pressure from her parents. These parents repeatedly refused to allow staff to implement a DNR (do not resuscitate) plan so, at the inevitable end this woman died in a souless, high tech critical care unit surrounded by machinery, technicians and blank, sterile walls, rather than peaceably in a hospice surrounded by family and friends.

[Marmora Man]

Loz Wrote:

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> Hang on. That's ?12.6 billion over five years.

> In other words, back to the ?2.7 per year I posted

> earlier, except multiplied by five to make it

> sound much bigger than it is. And the same ?2.7m

> a year that seems to be very, very over

> estimated.

>

> Look I am willing to say that if the 50% rate

> brings in a significant amount of money (i.e. more

> than ?2bn a year), then fine, it works so keep it,

> Are all the pro-50% people here brave enough to

> say that if it doesn't (and that means less than

> ?1bn a year) then we should scrap it? We'll leave

> the middle as a place to argue over later.

>

> Timster? SJ? DC?

Loz's challenge seconded.

[Marmora Man]

I'm not against either private companies or savings. But whatever merits this government has, they are out to destroy the nhs. Not make savings. Not save money. But get rid

And your evidence for this is??

Every politician since Bevan has committed to the NHS "free at the point of delivery". That is not going to change. To suggest this government is pursuing some ideological conspiracy to get rid of the NHS is pure fantasy.

I personally believe healthcare could be delivered far more effectively and efficiently by the private sector; that is based on almost 20 years of experience. However, I do not suggest, nor have I ever heard anyone else suggest, that the "free at point of delivery" or the funding basis of UK healthcare be changed.

There are different models that could be discussed - replacing some of the taxes paid with a form of mandatory social insurance as in parts of Europe, rationing certain types of healthcare by making people pay a portion of the cost (IVF, tattoo removal, comemtic surgery, bariatric surgery for example) but no one has ever, to my knowledge, proposed the dismantling of the NHS.

[StraferJack]

"

> Timster? SJ? DC?

Loz's challenge seconded."

I'm pretty sure I said earlier in this thread this very thing

[StraferJack]

Mm. Of course noone can propose to dismantle the nhs. That would be suicide politically

But surely the reason private firms appear better able to provide healthcare in your eyes is their ability to not have to deal with the volumes the nhs does, as well as being selective

But it should also said there are areas where we agree - "rationing certain types of healthcare by making people pay a portion of the cost (IVF, tattoo removal, comemtic surgery, bariatric surgery for example) "

I might not agree with all of the examples but taking some of the more elective procedures off the list is both a saving and doesn't require costly restructuring

[StraferJack]

Here is what I said about the 50p tax bracket

"(here it should be noted that I?m open around the 50p tax bracket ? if it does raise the targetd 2ish billion then I can?t see a problem) "

So I didn't explicitly state I would remove it if it didn't raise money but i think it's clear

But as dc said earlier, if it wasn't raking in enough money this government would have removed it on day one

[Huguenot]

I don't think there's any point in cutting the 50p rate, because no-one has generated a quantifiable argument about what benefits this will deliver. In that sense there's not much point in cutting it, as any incremental revenue is, well, revenue.

However, that's very different to justifying it. I'm staggered that anyone should argue that not having it is ideological. It's the clear f*cking opposite.

As Loz pointed out, it doesn't generate a significant income line on government budgets - so the only reason for having it is 'principle'. That's ideology. It's the definition of ideology.

Strafer imagining that this government would have removed it on day one is plain silly. What - announce that we're cutting public services, sacking union workers and.... cutting taxes on the rich???? Are you insane?

Regardless of D_C's convictions, there is a very serious question about whether the extraordinary government spend on welfare (not health and education please, just welfare) is a wise way to spend taxpayer money.

SG Plc. gives $50,000 to any young person wanting to launch a business with a sound plan and evidence of skill. They also provide a biz guru overseer. I think this is wiser than giving the same kid 50k in handouts for sitting on their arse playing World of Warcraft.

I think welfare should be a lifeline, not a career.

In this light it's entirely understandable that people in the 50p zone would enquire why they're being singled out for a tax that delivers nothing to the bottom line, but everything in terms of the politics of envy. This doesn't make them greedy bastards, just perfectly reasonable happy people.

Regards the NHS, the fairly obvious point is that it costs every person in the UK 2k a year to run. If you paid that kind of premium on private healthcare the nurses would be waking you with a hand shandy, not calling you a bastard rich c*nt.