50% tax, will US follow suit?

Discussion in 'Economics' started by MohdSalleh, Apr 6, 2010.

  1. coming your way, as Obama looks to Europe for guidance on healthcare,taxes,etc

    Page last updated at 08:37 GMT, Tuesday, 6 April 2010 09:37 UK

    New 50% tax rate comes into force

    A new 50% tax rate for top earners has come into force at the start of the financial year.

    The new rate will affect the 300,000 highest earners in the UK, out of the 29 million people who pay income tax.

    It will be levied on taxable incomes greater than £150,000 a year and aims to raise an extra £2.4bn by next year.

    The 600,000 people who earn more than £100,000 a year will have their personal tax allowance eroded too, raising £1.5bn for the government.

    Together with increased tax on pension contributions, which starts next year, the UK's top 600,000 earners are expected to be paying an extra £7.5bn a year in tax.

    Tax warning

    The new 50% income tax rate is aimed at boosting public finances.

    But the Institute of Directors (IoD) argued that the new rate would damage business confidence, foreign investment and entrepreneurial aspiration.

    "We believe the 50p rate is likely to raise little or no tax overall in the short-term, and lead to lower overall tax revenues in the medium to long-term," said an IoD spokesman.

    The directors' organisation argued that some high earners would move abroad to countries where tax rates were lower.

    It added that some directors of multinational companies might be tempted to move their headquarters abroad too, thus reducing the scope for the government to levy corporation tax.

    Patrick Stevens, a tax partner at the accountants Ernst & Young, said that while high earners who stayed in the UK would pay more tax, there would be fewer of them.

    "They will leave the UK or not come to the UK," he said.

    "Undoubtedly fewer people are coming [to the UK], to make up for the normal leavers, so the population of those high earners is going down."

    In other changes brought in at the start of the new tax year, child tax credit has been increased by £20 a year.

    The amount of money that people aged under 50 can save in an Individual Savings Account (ISA) has also gone up from £7,200 to £10,200 in a financial year. Half of this can be saved in cash, with half, or all, in stocks and shares.

    Those aged over 50 have benefitted from the new ISA threshold since October 2009.
    Story from BBC NEWS:
  2. 50%? So half of all the work you do goes to the government...someone explain to me how that is not slavery when someone else gets more of your money than you do?
  3. i get more frustrated when I think about this in TIME vs money paid --- to think you are working till the end of June for the govt. before you start to work for yourself -- makes me frustrated. at some point, if you have made money, and saved YOU have to start thinking to yourself "why work?"
  4. spinn


    If you add in local taxes, sales taxes, real estate taxes, gas taxes it is more like 70-75% at the top brackets.
  5. That's just the Feds... if you include State, Local, Property... you're "workin' for the Gummint until October..."
  6. don't forget the NI (National Insurance), that's another 1% so the tax you pay is indeed 51%

    the UK is a rip off country
  7. "We believe the 50p rate is likely to raise little or no tax overall in the short-term, and lead to lower overall tax revenues in the medium to long-term," said an IoD spokesman.

    Numerous times in numerous countries, higher rates have proven to reduce revenue, yet the insatiable pigs insist on raising rates. What is it that they don't understand about it?
  8. I don't like Obama but I liked the %50 tax on rich people

    So rich people will be buying less jets and Mercedes and houses with pools but poor people will have food

    I would say go for it

    Luxury spending is a waste
  9. 150k pounds is abt 225k usd, and given london is more expensive than NYC, you will know that is basically NOTHING
  10. Luxury spending is a choice! those actions spent on buying "waste" keeps many smaller industries alive, and that is the ironic part.
    #10     Apr 6, 2010