Cameron upping 40% tax rate band from 41k to 50k

I'm all for lowering taxes, but by my calculations this would cost about £4 billion? Considering Miliband is giving it the big one about raising £2 billion for the NHS this seems pretty bold. At least it puts a bit of daylight between the parties which is a good thing in my opinion. Mansion Tax and 50% higher rate verses a big tax cut for the £40k+ earners.

Can't help feeling that this was the big one they were saving till the election and UKIP have forced them to pitch it early.

 

Prefer the Ukip idea of not taxing the low paid

 

The Non-Existent "Squeezed Middle" will be delighted.

 

I laughed at how he very obvious displayed his notes.

It sure is b!tchy in Westminister, isn't it!

 

where does this leave ornyarry?

 

Bloody idiot in my opinion. Should've left it and made the raising of the threshold for low paid workers the main take-away thought from the day. Labour can now run with the idea that the tories are the same old tories cutting tax for their rich friends etc.

Hopefully now Labour can form a proper opposition and divide and ram this down our throats, whilst criticising the government for their bull**** about being the party of the NHS.

 

41k is not a big wage to have to pay high tax on and it's right to spread this out a bit. But everyone (well 90%) are squeezed and it's probably time that taxation was reset following an all-party commission to lay down some principles and ensure the biggest anomalies are smoothed out. Ultimately for me it's the poor first though.

 

[video=youtube;0YBumQHPAeU]https://www.youtube.com/watch?v=0YBumQHPAeU&feature=youtu.be[/video]

Even if you support the Tories you can still find this amusing...

 

Another deluded southerner ... If anything's going to put labour in it is this because I don't think Cameron has got his sums right.

 

Just to reiterate once more. Cut the income tax, raise the income tax - makes no odds to me. As a person working full time on the minimum wage (19p per hour pay rise today!) I have to have my rent etc made up by benefits. My wages of around £230 per week are not enough for our family of 5 people to live on. It is only £6.50 per day each and you can barely even eat on that, never mind pay rent and bills.

Every extra penny I get in wages gets deducted from the benefits. £5.00 tax cut = £5.00 benefit cut. Situation absolutely and completely unchanged. You'll appreciate that I couldn't care less if they raised my tax to 99.9% or reduced it to zero. Makes no odds to me.

What does hurt us however is freezing and capping the value of benefits. Labour wants to freeze, the Tories want to cut and the UKIP want to abolish. Tremendous choice at the ballot box.

Still, the consolation is that you have to have the conditions created for the Revolution before it can happen.

 

Before you two argue whether £41k is big bla bla bla:
£41k is £593 a week after tax. (http://www.thesalarycalculator.co.uk/salary.php)
This is a really dated graph:

 

See that great big peak at around £250 per week?

That's us that is. The mode that somehow got omitted from this graph.

 

I'm quietly happy. As a squeezed middle-er professional in a financial / social band which is almost completely ignored by just about every party yet spend our lives paying for everything, its nice to get something back out of the system for once.

 

Mode is pretty easy to work out by looking at it. Unless you count over £1100 as one group, then they are the mode.

Who's us?

 

I thought I read in the Standard tonight that they would raise the personal allowance to £12.5k pa (from £10k now). That looks like a £400 pa tax cut to me on a£12k pa wage. I don't understand how that might affect the benefits you mention so maybe no difference

The article said these tax changes would cost £7.2bn overall-£5.6bn on increasing the allowance and £1.6bn for the 40% tax band increase. Maybe its the reduction in benefits you refer to that pays for it so its neutral for many. He certainly never said how it was to be paid for !

 

What are the updated figures for after the financial crisis? 06/07 data doesn't particularly make for great rhetoric.

 

That's still pretty warped because while wages in the Southeast may have rocketed since then, wages in the North and West have stagnated and widespread benefit cuts since this was published are quite likely to have driven the median down IMO.

 

The benefits get cut if you take home more, 48. So currently I pay something silly like £25 income tax each month. Under the Tory plans, in the future I would pay nothing in income tax.

However, that £25 extra on my wage slip means that our housing benefit gets cut by exactly and precisely £25.

End result - no change.

 

If you cut taxes for the middle-band of society it means that they have more to spend, drive up inflation, and ultimately the poor are poorer in real terms. Likewise, all of the idiots excited about their tax break can enjoy having the same spending power (if not worse due to the inevitable interest rate rises) next year. Have fun consumerists.

 

It still doesn't explain why it's omitted from the graph. It's a perfectly valid way to calculate the average - probably more so than the mean and median which are warped by those 2.7 million earning more in a week than most of us do in a month.

Us = the plebs. The proles. The peons. The put upon and the exploited.

The hard working families so beloved of the politicians rhetoric.

 

Sorry Clive, perhaps you should take another holiday in Cuba?

It's much better there.

 

Without Labels looking at he graoh it would be hard to tell what the mean and median were, the mode is just he most common, which is wha the graph shows graphically.

Mode is a poor estimator for the average in this and many respects. The modal income to the nearest pound would be £0.

 

Despite being well above the £50k I'm on the side of Clive. It's not going to make the slightest bit of difference in the grand scheme of things. The money for this tax break has got to come from somewhere and it sure isn't coming from the rich. So it will be in the form of a continual decline in living standards, education, healthcare and everything else that our taxes are meant to go towards.

As soon as a major party wants to look at taxing assets (e.g. land) rather than productivity (income), they'll have my vote.

 

Anyone in that 40% tax band saying 'we're forgotten' or whatever need to get over themselves.

If they raise the personal allowance you're better off aswell so what's the big ****ing deal even if you don't get the 40% threshold raised.

I'll compare someone earning 25k a year to someone earning 60k a year to get some perspective going.

Current exc. NI
£25,000 - £10,000 = £15,000
£15,000 - 20% = £12,000
£12,000 + £10,000 = £22,000 post tax
Total tax paid = £3,000

£60,000 - £10,000 = £50,000
£50,000 tax rates equal £31,866@20% and £18,134@40%
£31,866 - 20% = £25,492
£18,134 - 40% = £10,880
£25,492 + £10,880 + £10,000 = £46,372
Total tax paid = £13,628

Proposed exc. NI
£25,000 - £12,500 = £12,500
£12,500 - 20% = £10,000
£12,500 + £10,000 = £22,500
Total tax paid = £2,500

£60,000 - £12,500 = £47,500
£47,500 tax rates equal £7,500@40% and £40,000@20%
£40,000 - 20% = £32,000
£7,500 - 40% = £4,500
£32,000 + £4,500 + £12,500 = £49,000
Total tax paid = £11,000

So the 25k earner is now 2% better off whereas the 60k earner is now 4.38% better off.

Rich richer poor poorer etc.

Wherever they're plucking this money from it should be used to up the personal allowance even more that way everyone is better off.

Although if they're insistent on helping these people who are already well off they should introduce a 30% tax band for people earning between the current 41k and the proposed 50k.

Or the government should be using the money to get more people into jobs, and I mean working for the council's and this money being used to pay them. Provided they pay say £7.00 an hour to a 40 hour a week job that equates to £14,000 of which they'll get £900 in tax anyways.

More money in actual people's pockets to help get rid of people on benefits and housing allowances etc. Gets people into work forces allowing them the opportunities for promotion and earning more money etc. If the £4bn posted above is correct I make that 285,000 extra people in work. Of the wages they'd pay out they'd get back £256m back which would more than cover to 6.1% pay rises on every single one of these jobs which is relative of course and the cycle would continue.

These extra people earning means more demand in the market and some more jobs there too, everyone is a winner.

 

I think your last calculation is wrong, by the way. I think it should be £11,500 tax paid, meaning that the saving is 3.5%. But your argument is still valid.

I have just worked out that if the £1.6bn cost of the higher rate tax saving was used to increase the nil rate band even higher, then the new band would be £13,214. At 20%, that equates to and extra £2.74 in the hand, or enough for a pint of beer, each week.

The middle earners have missed over the years, in many ways, and yes, some of it may be perceived. but, they also form a large part of the electorate. We all know that the Conservatives are better on the economy than Labour and so the price of a beer is well worth the extra votes the Conservatives will get, in the hope of a 2nd Conservative government.

Because, let us be frank here, the only chance of everybody being sustainably better off over the long term, is if we keep Labour away from the treasury.

Fortunately, the majority of our voters will agree with me, even if the majority on this Forum wouldn't.

 

Whatever the merits or otherwise of this policy, it's absurd to moan about increased economic activity and a boost to the high street which is obviously a positive. By your logic all recessions should be welcomed due to the deflationary impact.

 

A 2nd Conservative government? There hasn't been a first one yet. They couldn't even get a majority in 2010. And the coalition's management of the Treasury has matched Labour's previous efforts comfortably.

 

My thoughts after reflecting overnight is that if we were running a balanced budget then I'd definitely be in favour of this, but it seems reckless to endorse such a large tax cut while the country is not even close to paying for itself.

However, reading the small print I see Cameron has done the same trick that Miliband did with his minimum wage. by making these promises by the end of the next Parliament (i.e. in 6 years time). Why can't they just be honest about it?

 

You're not comparing eggs with eggs. Labour inherited a healthy economy and it was trashed by the end of 13 years, due to both their own ineptitude and outside influences. Conservatives inherited a huge deficit which they have made progress in reducing (admittedly disappointing progress). You can't really compare the two stewardships.

 

Economic history for 5 year olds. Now when exactly was 'Black Wednesday'?

The economy was recovering by 1997 and continued to do so under Labour for nearly 10 years. Government spending was not the reason for the crash - unregulated speculation was - and yes Labour should have curbed that.

But the Tories 'success' from 79-97 doesn't bear massive scrutiny. Many economic sectors declined, investment was moderate and 'wealth' was created by selling off assets and rogering the poor. A pool of unemployed was created that the country has never been able to tackle.

The Tories economic case is an enormous overstatement, which I expect you'd admit to when talking to like minded pals.

 

Public Private Finance Initiatives have continued unabated and they're the most crooked economic device going. Storing up debt and keeping it off the books. In fact Osborne souped them up. Unforgivable as far as I'm concerned at a time when standard borrowing for the government on the international markets has a historical low interest rate. They're all in it together and the sooner people realise it's all idealogical and neither is more fiscally competent than the other the better.

 

I'm sure you get what I'm saying.

At 41k you should pay more tax than those on 30k who should pay more tax than those on 20k and so on. But the Teachers, Senior Nurses, Sales Reps, Plumbers, Train Drivers etc who earn this amount should not be paying the same rate as people making 7 figures bonuses, or indeed the super rich.

In the South 41k isn't a huge amount once the cost of a mortgage/travel is factored in. I'm not boohooing I'm just saying it's not Roman Abramovich.

 

Moose - hate to let facts get in the way of your anti Tory rant but Labour borrowed £200 billion during a credit boom. By anybody's standards that is reckless. And that's before we even consider PFIs.

The Tories economic management prior to 1997 is littered with errors, but if you'd bothered to read my post you'd see I was addressing a poster who claimed that the Tories have done worse post 2010 than Labour did before them. The economic situations are incomparable. Personally I think the Tories have been disappointing in tackling the deficit, but they were dealt a dreadful hand by the outgoing administration.

 

Well I certainly agree with this on PFI. Dreadful dishonesty on behalf of government both Conservative and Labour.

 

Labour would have borrowed so much without the exposure of the banks? Do you think the Tories would really have let them fail either?