People earning over £60000 should have a 0.8 to the pound tax rate?

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Can someone expalin this to me:

when you earn over, lets say 1 million and the tax rate is 50%,

Does that mean the person's salary will be 0.5million? Or is 50% taxed for earnings over a million? eg lets say a person earns 1.2 million, only the 0.2 is taxed at 50% and rest is taxed as usual, etc. Which one is correct? (Me and my friends were confused about this)

Jay

It would only be the 0.2, yes. Otherwise, if you earned £999,999, you'd be better off than if you earned £1m. A lot of people don't understand that this is how tax works and use that as example to portray why tax rates are stupid.

Reply 141

Commercial Paper

Original post by Jaydude

It's 50% for over a million in your hypothetical case.

In reality what happens is once you're earning over £100,000 you start gradually losing your personal allowance, which is your tax free £10,600 so everything from £0 up to around £40,000 is taxed at 20% (however if you're earning less than £100,000 you always get your first £10,600 tax free). Then everything between that and £150,000 is taxed at 40%. Then everything between £150,000 and infinity is taxed at 45%. After you've paid that, you then get hit with a national insurance bill as well. So high earners are taxed relatively highly in this country.

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Reply 142

s.c.a1

im sorry but if for every pound i am going to only keep 20p after studying for all this time i wud much rather stay at home and claim benefits

Reply 143

scrotgrot

Original post by cleverasvoltaire

So I, as a future law student, become a barrister after working extremely hard for 3 years at Cambridge, get a starter salary of say 70,000 pounds and then only get to keep £14,000 of it? What sounds fair to me is I keep what I earn, you keep what you earn. Plain and simple.

Oh dear oh dear. One can only assume you're not planning to be a tax lawyer...

Reply 144

welcometoib

Original post by scrotgrot

Oh dear oh dear. One can only assume you're not planning to be a tax lawyer...

and if he was? :biggrin:

Reply 145

ibzombie96

Original post by scrotgrot

Oh dear oh dear. One can only assume you're not planning to be a tax lawyer...

Ahaha this is so good

Reply 146

esbo

Original post by cleverasvoltaire

Hong Kong also has one of the lowest.

But one of the highest levels of inequality.

Yes it is fine if you are rich, but not so much for the 15% of the population who live below the poverty line.
There is no state pension either.

Reply 147

SotonianOne

Original post by esbo

But one of the highest levels of inequality.

Yes it is fine if you are rich, but not so much for the 15% of the population who live below the poverty line.
There is no state pension either.

Since when do illegal chinese immigrants count as "population below poverty line"?

Their fault they're there in the first place.

Reply 148

ngb9320

Original post by s.c.a1

im sorry but if for every pound i am going to only keep 20p after studying for all this time i wud much rather stay at home and claim benefits

If you making over 60000 you have more than enough anyway. There is no way you would get near 60000 a year ifyou were on benefits.

Reply 149

ngb9320

Original post by Another

...80%? You realise that absolutely no one in their right minds is going to pay this? Either people leave the country or avoid tax altogether.

You realise the tax rate was up st 90% before?

Reply 150

Another

Original post by ngb9320

You realise the tax rate was up st 90% before?

What, after WWII? I'd imagine there was actually a valid reason for that.

(edited 8 years ago)

Reply 151

cleverasvoltaire

Original post by esbo

But one of the highest levels of inequality.

Yes it is fine if you are rich, but not so much for the 15% of the population who live below the poverty line.
There is no state pension either.

They have 3.3% unemployment so I don't know what you're talking about. The lack of 'entitlements' is a good thing ensue it means people can keep the money they earn.

Reply 152

SotonianOne

Original post by ngb9320

You realise the tax rate was up st 90% before?

Yes, that was at the time when there was a recovery from a war and funds were needed. Culture was generally different and the population felt more national unity and ethically required to contribute. This was also at the time when the lowest tax in any country was probably ~85%.

So if you have a 90% tax rate and America has a 88% tax rate, of course you can uphold your one. There was also technological differences, goods transport wasn't as easy as today therefore moving abroad was much more costly than today, so a couple percentage points didn't make a difference. There was also no competitiveness from China.

Today, you have countries offering 0% tax rates. Good luck convincing people that they have to stay or demanding those countries to raise their rates.

Times are different. You can't look back in history. 1970 - Present is a completely new economical era as universally agreed by economists.

Reply 153

DennisMenace

it's way too much of a jump to go from 50% up to 80%. Silly stupid idea

Reply 154

ibzombie96

Original post by ngb9320

If you making over 60000 you have more than enough anyway. There is no way you would get near 60000 a year ifyou were on benefits.

Who the hell are you to say what is more than enough? In my family, 60 000 doesn't even cover the school fees for me and my sister, let alone other expenditures.

And it's too right you shouldn't get 60k on benefits - welfare is there to allow you to live if you have a poorly paying job or if you are out of work.

Reply 155

L'Evil Fish

Original post by ibzombie96

Lmao, 'doesn't even cover school fees for me and my sister'

Private education is not a necessity in the slightest.

If it doesn't cover it you can't afford it, and you should just go to a normal state school

If we raised the standards of education of the state then there wouldn't be a need for private education

Reply 156

SotonianOne

Original post by L'Evil Fish

If we raised the standards of education of the state then there wouldn't be a need for private education

except that's not how reality works

there is not a single point in which it is realistically possible that state-provided education can be of higher quality than that of privately run schools.

It's called efficiency and incentive. Plus those teachers you'd have to train for that super-good education in state-funded schools would be fetched up by private educators due to better working conditions.

Reply 157

Reue

Original post by ibzombie96

welfare is there to allow you to live if you have a poorly paying job

The argument would be that anyone working full time should not need welfare from the state to survive.

Reply 158

L'Evil Fish

Original post by SotonianOne

There are plenty of state schools better than private schools in certain areas so it is indeed doable

Bs. How is that fair? Why should someone who's born with no money be at an immediate disadvantage in life? Why should I have to make up the ground? It's possible (I'm an example I think, or will be) but that's down to chance more than work or effort

Working conditions should be improved then in state schools...

Reply 159

SotonianOne

Original post by L'Evil Fish

There are plenty of state schools better than private schools in certain areas so it is indeed doable

Can you show me this? I find this hard to believe. The best state school will never be better than the best private school anyway.

Original post by L'Evil Fish

Bs. How is that fair? Why should someone who's born with no money be at an immediate disadvantage in life? Why should I have to make up the ground? It's possible (I'm an example I think, or will be) but that's down to chance more than work or effort

Because that's nature's way with things. The extent of the disadvantage can be closed down through independent education, though. There's no such thing as an equal footing and never will be.

Original post by L'Evil Fish

Working conditions should be improved then in state schools...

Yeah .. let's start offering teachers in the average schools a $300 000 salary, I mean, there's absolutely no economic effects on that right?

Private schools can afford those wages because they are paid for. A similar state-run scheme will bankrupt the country. The private sector in the education industry will always outperform the public sector and will fetch up the best of the best, unless your aim is to bankrupt the country by offering teachers a couple of millions to temporarily raise the standards of education to "show dem toffs n poshies"

tl;dr working conditions will always be better in the private sector