Budget 2009: Alistair Darling targets rich with 50% tax

Budget 2009: Alistair Darling targets rich with 50% tax

www.guardian.co.uk

Alistair Darling today pledged to reinvigorate Britain's ailing economy with a £1.7bn job creation scheme and a new 50p income tax band for the highest paid.

The 50p tax rate replaces the planned 45p new top rate announced in November's pre-budget report and will kick in in April 2010, a year earlier than planned. The new rate will only apply to the 2% earning over £150,000 a year, who will also see tax relief on their pension contributions curbed.

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from the yahoo link:

If one now adds National Insurance to this, anyone earning more than £150,000 will, on the amount above this figure, pay over half of their income in taxes.

This is not where it ends. From 2011 those in this income category will have the tax relief on their pension contributions restricted as well. It is not clear at this stage how this will work

ok finally those who earn the big money are being taxed alot more BUT, this really is the only `good` part about the whole and terrible sham called the budget;

why?

The borrowing figures for the current year are a staggering £175bn, and total over £600bn over a four year period.

Although there are some increases in taxes, it is not clear how this debt is going to be reduced in coming years

borrowing $600 BILLION with no planned way to pay it back.


or is that because they know , that they won`t have to pay it back with 1 world currency?

www.guardian.co.uk
(visit the link for the full news article)

Originally posted by Harlequin

borrowing $600 BILLION with no planned way to pay it back.

or is that because they know , that they won`t have to pay it back with 1 world currency?

No, I think it's because they know they'll lose the Election next year and it then becomes Someone Else's Problem .....

So if I make 150K and the government takes 75K from me where is the fairness? Anyone making 149K or less wont get hit with the 50% tax and will in the end be left with a greater amount earned than my 75K.

I'd just take a 1K/year pay cut and keep more of my own money. I don't make 150K or live in the U.K. though.

It's amazing to think that one half of your daily toil is to be taken by force. It's more amazing to think so many people are perfectly fine with that extortion. When the U.S. broke out into war the tax rate was something like 2-4%.

It's bad enough so many people are happy with their share-cropper status but that myself or other like-minded individuals are kept locked in with threats of imprisonment and federally sanctioned force. Born a slave of slave parents. Now I'll die a slave because the rest of slave society wont permit us to opt out if we so wish.

Government has no right to take your income, you earned it.

The 50% rate will, if, only last a year and no Conservative government will back it. Why punish small businesses via income tax and capital rates too? Destroying wealth will not revive the economy.

The 50% will only generate £1 billion - max. We need to raise £175 billion. Playing politics and appeasing the socialist wing of the Labour party is counter-initiative.

Originally posted by Harlequin

If one now adds National Insurance to this, anyone earning more than £150,000 will, on the amount above this figure, pay over half of their income in taxes.

This is not where it ends. From 2011 those in this income category will have the tax relief on their pension contributions restricted as well. It is not clear at this stage how this will work

ok finally those who earn the big money are being taxed alot more BUT, this really is the only `good` part about the whole and terrible sham called the budget;

So, I take it you don't fit into that high-earning bracket. I find it appalling that anyone would find it perfectly acceptable for the government to take half of anyone's earnings. It's absurd, frankly.

Originally posted by thisguyrighthere
So if I make 150K and the government takes 75K from me where is the fairness? Anyone making 149K or less wont get hit with the 50% tax and will in the end be left with a greater amount earned than my 75K.

it's 50p in the pound above £150k, do it's only your earnings above 150k that get taxed.

to be fair, the people above £150k a year are the ones benefiting from all these banking bail-outs, don't see why they shouldn't have to pay the biggest proportion of their wages until it's all paid back, the bailouts are all going to have to be funded from taxes after all is said and done, why the heck shouldn't those who benefit most contribute most.

[edit on 22/4/09 by pieman]

reply to post by infinite


Inf, whilst I agree with you follow up statements, your first comment is a bit naive.

The Government has no "right to take it because you earned it?"

Then I suppose on the flip side, you have no right to the NHS, schools, roads, the Police, the Fire service etc etc etc?

reply to post by thisguyrighthere


It isn't 50% on the whole 150k.

Like the rest of taxation, it works in bands. Granted, these people will have their personal tax allowance stripped away, but they'll still pay the basic rate of 20 odd % up to around £38k, then 40% on the rest up to £149K, then 50% on whatever comes after the £150k. It's staggered. Most people get around £6500 tax free allowance anyway before taxation kicks in.

I agree that the rich should pay more. I personally myself just about fall into the old higher tier of taxation (40%) and pay quite a chunk every month. I still take home a nice wedge though. All in all, including NI as well, around 26% of my pay gets taken off me very month.

It's not really worth moaning about, because what alternative is there? Flat tax? That's unfair to the poor. A poor man will notice 20% of his £20k going missing alot more than a rich man losing 20% of his £100k.

All this is just smoke and mirrors though. Buried in the Budget are details of spending cuts and further tax hikes later on (post 2010).

The Government are setting the Tories up because they know they'll win the next election and be forced to either slash spending to the bone (pissing people off) of raise taxes (pissing people off), then in the next election after that people would have forgotten it was Labour who did this in the first place and punish the Tories.

Taxes pay for all those little FREE things like , FREE health care , and FREE dental care that everyone , whether they earn £150k or £10k a year gets.

Income Tax rates and taxable bands 2009-10
Starting rate: 10% £0-£2,440 (savings only)
Basic rate: 20% £2,240-£37,400
Higher rate: 40% Over £37, 400

Personal Allowance £6,475


the way UK tax works is you pay nothing on the first £6,475

you pay 20% on the next amount up to £37,400

so say you earn £17,400 a year (roughtly $27,000) you get $9000 tax free

you then pay 20% on the next $18000 (£11000) which works out at £2200 ($3000)

so your income tax on $27000 wages is $3000 for a year.

over £37,400 you pay 40% income tax , and now for earning over £150,000 you pay 50%


so £150,000 earnings , you still have the £6000 odd tax free (so taxable is £144k)

20% on the next £31K (£6100) and finally the remaining £112,000 is at 40% (45k)

so dropping down pay scale to under 150k won`t do anything.


so total tax bill on earning of £150k would , as an approximation be around £51,000


whats the amount of tax payable on earning of $220000 in the USA?

remember that in the UK we have free dental and health care so thats not needed to be deducted .

[edit on 22/4/09 by Harlequin]

reply to post by pieman


So every rich man is a banker? Even the small business owner is a banker? The top academic heading up a university department is a banker? Well done genius...

In general:

Darling has just cemented the death of the UK. Mark my words; the UK is finished. Without London and the rich this country is nothing. Since the dawn on British supremacy after the industrial revolution, Britain has always flourished because of the best and brightest in its society. No longer is that the case.

All that will be left is a hollow shell of a country, full of asylum and benefits seekers. As for the rich, they're all off to the remaining tax havens. There's absolutely no incentive for business to stay in the UK any more. Let's see how you liberals run your high spending budgets when you have no rich left to tax.

The time for talk has ended. You'll be on your own soon enough, let's see where your socialist policies lead.

reply to post by paperplanes


see my follow up - and the explanation to how tax works


50% on earning above £!50k

its allready 40% for everything above £37,400 right now.


edit:

have some figures for US tax


$40,000 gross income - $5,700 standard deduction - $3,650 personal exemption = $30,650 taxable income
$8,350 × 10% = $835.00
($30,650 - $8,350) = $22,300.00 * 15% = $3,345.00
Total income tax = $4,180.00 (10.45% effective tax)

which is rather close to the amount of tax someone in the uk pays.

[edit on 22/4/09 by Harlequin]

reply to post by 44soulslayer


Liberals? That's a very US term, isn't it? The term Liberal in American parlance doesn't mean the same thing in UK politics and is hardly ever used. Are you British?

EDIT: Oh, and yes, I am currently a 40% tax payer, I am a staunch conservative and I do not believe a word of the crap you spouted about Britian being finished, nor your assessment on how this country succeeded in the past.

Only the rich made Britain great? What utter tosh.....

Just to back up Harlequin, I actually only pay 26% of my income towards Income tax and NI, despite being a "high earner"
[edit on 22/4/09 by stumason]

[edit on 22/4/09 by stumason]

reply to post by Harlequin


U.S. income tax table:

www.irs.gov...

It's a PDF

Looks like at 220,000 it's 33% or 72,600.

reply to post by stumason


Well no, isn't that taken out of National Insurance and Council Tax? Income Tax was introduced by William Pitt to pay for the Napoleonic Wars, it was meant to be a temporary measure.

In the words of John Lennon, War is over. However, I would like my money back now.

reply to post by stumason


Indeed I am. There isn't really an equivalent for "liberal" in British parlance. "Left Wing"would be the closest I suppose.

You made the point about taxes paying for vital services. Do they really?

Take a look at how much the government legitimately spends on the NHS, roads, fire, policemen etc.

Then look at how much is wasted on quangos, asylum seekers, benefits and welfare provisions, civil servants and middle managers.

A lean state could easily function on a far smaller tax burden. The level of tax in the UK is solely because it is almost directly redistributive in nature. Take from the rich via taxes, give to the poor via benefits. The actual amount used for core services is negligible.

Certainly at the very least, how can tax increases under Labour be justified considering the quality of every major service has gone down during their administration.

Edit: and yes, only the rich made Britain great. The industrialists of the midlands, the merchants of Liverpool, the bankers and financiers of London, the small business owners up and down the country, the public schoolboys who ran the East India company etc etc etc. I suspect most, if not all, these people would fall into the category of "rich". Has a poor person ever contributed to the stature of Britain in any meaningful way?

Don't dismiss it as "tosh" please, try and back up what you say or at least refute what I claim.

[edit on 22-4-2009 by 44soulslayer]

Originally posted by 44soulslayer
So every rich man is a banker? Even the small business owner is a banker? The top academic heading up a university department is a banker? Well done genius...

so the only people benefiting from the bailouts are bankers? i thought we were told we needed to inject capital to allow banks to extend credit lines to small and medium business.

regardless of which, the only ones particularly helped by the banking bailouts are those on high incomes, those of us on lower incomes don't have access to the levels of credit required to be affected directly by a freeze on short term credit. we will only be effected, positively or negatively, as a secondary party.

but way to show your ignorance of how the economy actually works.

as far as your suggestion that the rich in the UK are traditionally the best and brightest
:lol :

[edit on 22/4/09 by pieman]

reply to post by infinite


Some of it is, yes. But Local Authorities get an amount from central Government, paid for by..... YOU GUESSED IT...Income tax amongst other things.

Same with the NHS. NI contributions for the nation do not just cover the NHS budget, they also go towards State benefits like Jobseekers and Incapacity...

I do know why IC was brought in, but since the early 1800's the Government provides a hell of alot more to the people....

Don;t be so naive, Infinite! Your an intelligent lad

[edit on 22/4/09 by stumason]

Originally posted by stumason
I do know why IC was brought in, but since the early 1800's the Government provides a hell of alot more to the people....

Correct me if I am wrong, but didn't Pitt also use Income Tax to rebalance and pay off the national debt accumulated by prior governments as well?

isn't it fascinating how right wing americans use the word liberal?

in the UK its a very positive word, if your liberal your tolerant of other races/ cultures, embrace change, open minded. Pretty much all the definitions in the dictionary dictionary.reference.com...

In america its been taken and turned into a dirty word or even an insult by right wingers. Real shame especially when you look at the dictionary. It seems they literally dont know the meaning of the word.


[edit on 22-4-2009 by yeti101]

Thank you to those who offered a break down of the taxation.