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50P Tax Rate "likely" To Be Scrapped Next Year

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http://www.telegraph.co.uk/news/politics/georgeosborne/8699915/Osborne-drops-broad-hint-he-will-scrap-50p-income-tax-rate.html

Osborne's rich chums must be glad...

The Chancellor said there was "not much point" in having taxes that raised little money and drove businesses out of Britain. He added that he did not see the levy, introduced under Labour, as a "lasting rate."

His remarks in a radio interview echoed comments by Lord Lamont, the former Conservative chancellor, in an article for The Sunday Telegraph last month. The peer branded taxes in Britain "too high and too uncompetitive" and said the 50p rate could probably be abolished "without any effect on revenue."

Mr Osborne is under pressure to do more to encourage growth in the economy - a point he acknowledged in his interview yesterday. He told Radio 4's Today programme: "Sadly growth in Britain is not what all of us would have hoped."

Business leaders are among those calling for the 50p rate, which affects earnings over £150,000, to be abolished to encourage enterprise. Doing so, however, would potentially open up a serious split between the Conservatives and their Liberal Democrat coalition partners.

HM Revenue & Customs are currently reviewing the rate to see exactly what sort of revenue it brings in - with their findings expected in the spring. The Chancellor said: "There's not much point in having taxes that are very economically inefficient.

"I've said with the 50p rate I don't see that as a lasting tax rate for Britain because it's very uncompetitive internationally, and people frankly can move.

"What is it actually raising? It's only been in operation for a year this tax, put in place by the last government."

He added: "But I would just say - because it will lead people to say 'are we making sure that better off people in our society make a contribution?' - we have increased capital gains tax, introduced for the first time in our history a permanent bank tax and I'm taking very tough action on tax avoidance."

Nevertheless, Mr Osborne could find it politically difficult to scrap the 50p rate while most public sector workers are having their pay frozen. For this reason, many Tory MPs expect he will announce next year, following the HMRC review, that the rate will be scrapped from April 2013. Danny Alexander, the Lib Dem Treasury Chief Secretary who is Mr Osborne's deputy, has said supporters of abolishing the 50p rate are living in "cloud cuckoo land."

Meanwhile Vince Cable, the Lib Dem Business Secretary, has said if it goes it must be replaced by another imposition on the wealthiest - possibly a "mansion tax" which would hit the owners of the highest-value properties. Ed Miliband, the Labour leader, has said he believes the 50p rate should stay as a "point of principle." Ed Balls, the shadow chancellor, has said the party should have "discussions" about bringing it in for incomes above £100,000. Mr Balls has also called for a temporary cut in VAT to try to boost the economy - and the reintroduction of last year's tax on bank bonuses which his party introduced when it was in power.

Edited by Dave Beans

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I doubt it matters if they make the rate 95%, the rich arn't going to pay it - Tax is just for the hard working peasants who can't afford tax avoidance advisers

Edited by mason

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I doubt it matters if they make the rate 95%, the rich arn't going to pay it - Tax is just for the hard working peasants who can afford tax avoidance advisers

And why are governments always held to ransom by the rich who will otherwise move to a different country, why don't they f**k off to a different country then? I'm sure there is people who would happily take their place!

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And why are governments always held to ransom by the rich who will otherwise move to a different country, why don't they f**k off to a different country then? I'm sure there is people who would happily take their place!

Yes it's a strange mentality that bleats about 'big government' and' high taxes' in the UK, when these same people could easily relocate to the state free zone of their choice- Somalia being one that springs to mind- and thus avoid both state interference and taxation.

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Yes it's a strange mentality that bleats about 'big government' and' high taxes' in the UK, when these same people could easily relocate to the state free zone of their choice- Somalia being one that springs to mind- and thus avoid both state interference and taxation.

What happened to entrepreneurship? If you take 52% (incl NI) of someone's hard earned money, it not much of an incentive is it? :ph34r:

The only way out of this financial debt hole is growth. The 50% tax rate doesn't raise extra revenue, so let's get rid of it and try get some businesses set up and working.

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So we can expect more to trickle down then when they cut this tax.

Cutting it won't make any difference, the rich still won't pay.

You can expect more (some) growth and more tax revenue collected overall. Whether it will trickle down to the lazy looters in this country is more a question for them.

Anyone on PAYE, surgeons, lawyers etc will pay it. People who think taxing the rich will get us out of this hole are deluded. We need to get everyone working, creating real value for the economy. 200bn of our spending goes on benefits. If people on benefits worked and supported themselves instead the problem is solved. :)

Dump the non-jobs and no-jobs, and start the real jobs.

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The people who pay this tax will not be "the little people", i.e. most of us, but a lot of us are probably employed in private businesses where the top people make far in excess of 150k.

If the business is of the type that can be relocated to another country, then surely it's good to remove that incentive to relocate, seeing as when they do, some of us little people will be unemployed?

I don't earn anywhere near the 50% tax bracket, but come on, the state taking more than half of someones earnings is totally out of order.

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I don't earn anywhere near the 50% tax bracket, but come on, the state taking more than half of someones earnings is totally out of order.

Hear hear.

As soon as we take away more that half of someone's earnings that sounds like communism to me.

We should address why public spending is 52% of GDP. That's the problem. Even communist China is only 23%!

Edited by no accountant

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And why are governments always held to ransom by the rich who will otherwise move to a different country, why don't they f**k off to a different country then? I'm sure there is people who would happily take their place!

There are plenty of people happy to take their place - and live off benefits in free housing provided by the state

THIS IS THE PROBLEM

:blink:

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Yes it's a strange mentality that bleats about 'big government' and' high taxes' in the UK, when these same people could easily relocate to the state free zone of their choice- Somalia being one that springs to mind- and thus avoid both state interference and taxation.

I've got a fantastic left wing idea for you

why not put an extra £1 duty per litre on petrol

This would raise billions in extra revenue which could be used to eradicate child poverty.

Even a five year old could understand the flaw in this idea.

When the state takes the majority of wealth that people create THEY STOP CREATING WEALTH

and EVERYONE is worse off as a result.

:blink:

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There are plenty of people happy to take their place - and live off benefits in free housing provided by the state

THIS IS THE PROBLEM

:blink:

That isn't the problem.

It is the fact that there are people in power that will give them this money.

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They should onlhy reduce corporation tax. It should be reduced to a level where britain is the best place to business in the world. Corporations should have to sign up to certain guarantees to be able to base themselves here.

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Why do the 'rich' need a carrot and the 'poor' a stick?

On a related matter, why do top 'officials' in every Government and Council Department, CEO's bankers, university principals, hospital administrators etc etc need to be incentivised, otherwise they will go elsewhere? Once all their salaries have been pegged at a proper level, where will they go?

Call their bluff!

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Lower taxes are the neo-liberal response to all ills.

I expect that if the dead were to rise from the graves to devour the living in a Zombie Cannibal Apocalypse then Osbourne would claim he could fix it by reducing the top rate of tax for the rich.

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So we can expect more to trickle down then when they cut this tax.

Cutting it won't make any difference, the rich still won't pay.

Would probably make more sense to tax expensive property in progressive bands. Property taxes are much more difficult to avoid than income.

No exemptions for Oligarchs and City spivs.

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All earnings by employment or un-earned income over £100k should be taxed at 90% in the pound IMHO. ;)

I tend to agree...thousands wouldn't....look they are saying they may remove the 50p tax, that is not good news for basic rate tax payers and pensioners, it will only push prices higher for others not so fortunate to be in the higher tax band...it will push up wages, therefore pushing up prices and inflation for the rest of us.......who is to say the rich will not then take more of their money outside the country, who is to say they will spend it creating jobs....who is to say they will spend more in the shops.....they may buy gold. who will benefit from that? ;)

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Would probably make more sense to tax expensive property in progressive bands. Property taxes are much more difficult to avoid than income.

No exemptions for Oligarchs and City spivs.

Not sure about that, but they should certainly tax worldwide income for all UK residents - pretty much every other country on earth does this already.

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The 52% top tax rate (65% if you include employer's NI), makes no sense as it raises very little money and is high enough to put some people at least off earning more or to make the effort to avoid it altogether. The problem is that, whilst you have people earning multi-million pound bonuses working for state run companies (I'm thinking RBS World Markets mainly here) and legions petty bureaucrats earning more than the Prime Minister, it's very hard to make a moral case for cutting it. The follow-on problem is, of course, that RBS (and to a lesser extent Lloyds) has to pay that kind of money otherwise parts of its business would collapse and UK taxpayers would end up worse off as a result. Personally, I think it's gone beyond a simple fix and requires a major set of changes, some of which will be loss makers in the short term. Something like:

- sell or shut all the capital markets operations of the state run banks within 6 months.

- mandatory pay cuts for all state employees earning more than 100K.

- drop the 50% tax rate and the 2% NI band.

- tax worldwide income of all UK residents from the day they enter the country.

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Not sure about that, but they should certainly tax worldwide income for all UK residents - pretty much every other country on earth does this already.

When I worked in new Zealand I paid tax to the nz gov

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http://www.telegraph...e-tax-rate.html

Osborne's rich chums must be glad...

while at the same time:

http://www.ft.com/cms/s/0/e97a4ac8-c662-11e0-bb50-00144feabdc0.html?ftcamp=rss#axzz1V0rsoOlq

Lib Dems press for ‘son of mansion tax’

By Kiran Stacey, Political Correspondent

Senior Liberal Democrats are pushing the government to consider a tax on the wealth of the richest homeowners as a trade-off for repealing the 50p top rate of income tax.

Amid growing signs that George Osborne, the chancellor, does not believe the 50p rate raises significant revenue and will repeal it later in this parliament, Nick Clegg, the deputy prime minister, Vince Cable, the business secretary, and other Lib Dem ministers are telling him the price to pay for removing the tax will be extra taxes on the wealthiest.

this is just to balance the disfunctional housing market - nice

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When I worked in new Zealand I paid tax to the nz gov

Yep, and when I worked in France and the USA, I paid tax on my worldwide income to those governments - same now that I'm in Canada. The UK is one of the few major countries that don't do this. The only other one I can think of is Japan where they give you 5 years before you start taxing you on stuff earned outside the country.

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Lower taxes are the neo-liberal response to all ills.

I expect that if the dead were to rise from the graves to devour the living in a Zombie Cannibal Apocalypse then Osbourne would claim he could fix it by reducing the top rate of tax for the rich.

indeed, because then said zombies may well settle down into comfy venture capitalist jobs and give the graveyards a miss

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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