Sunday, November 23, 2008

U.K. Government seeks urgent cash injection

Top earners face income tax rise

Darling is probably gooing to announce todat thatt for those earning over £150,000 per annum income tax will rise to 45%. Just as the credit crunch came in waves so to will the tax rises!

Posted by who stole my pension? @ 10:47 PM (1465 views)
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21 thoughts on “U.K. Government seeks urgent cash injection

  • Tax Bombshell just went off!

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  • I guess it depends how those earning over £150k get their money.

    You don’t want to deter entrepreneurs at a time like this, so he needs to capture those ‘recession proof’ careers doctors etc. But have a big release for entrepreneurs like a big reduction in corporation tax to say 15% for businesses with a T/O of less than 1-2 million for example.

    And soon – my year end is in December !
    Oh yes – and a big reduction in 4×4 road tax please Mr. Darling and I’ll go and spend some of my untaxed profits to help your economy along.

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  • planning4acrash says:

    Oh goodness, THE ANSWER TO 1984 SOCIETY is 1776.

    This will get rid of high earners who add wealth to this once fine country. It is total madness. The government are completely corrupt and bankrupt. We let this happen and they will go after all of us. We must do a repeat of the poll tax protests.

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  • When was it a fine country?

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  • “It’s OK low earners, you can go and spend the tax break in the full knowledge that those nasty, greedy top earners will pay in future!”
    Trouble is those tax breaks will give the public virtually nothing, unless of course you’re a nasty, greedy top earner who will spend anyway. What all this does though is gives HMG the licence to impose any taxes they like later, on the back of “we did give you breaks whe you needed it”. The fact that the later take will vastly outweigh the earlier give away will be lost on the sheople.

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  • The government should have been increasing taxes during the boom years, so they could reduce taxes during the tough years. Unfortunately they didn’t do this. A 5% reduction in VAT will do nothing because
    1. Prices have already been cut in many shops to try and get business during christmas.
    2. We have yet to see the price increases from the massive drop in the valuation of the £.

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  • The comments above are the principle reason why I stopped writing much in the forum. I don;’t know what posseses you, but if I were you, I would leave out the jungle juice.

    If… the high earners had even a scrap of entrepreneurial spirit, we would have already had a great boom in industry. For Gods sake, get a grip. The low taxes of the rich have accompanied a decline… in industrial output, the balance of payments, our competitiveness, our standard of education (see posters above), and business activity..

    Where this idea that these parasites somehow increase the wealth of this “fine country” comes from is beyond reason. You would be better off without them. They have done nothing but cause lawlessness, fraud, and poverty, and as long as they are given sanctuary here, they will cause more.

    What a pathetic forum this has now become.

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  • wasn’t income tax at an effective rate of 90% in the late 70’s?

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  • the [email protected] Yes I do recall that the top tax band was 90 or 95% in the 70s and that is why a lot of popstars etc became tax exiles.
    Re the proposed 45% band, Oz and NZ take approximately this amount at a MUCH lower income level, somewhere around $50,000 in their respective currencies, which is quite criminal. It’s a wonder they have any professional people who stay in the country.

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  • In case you haven’t seen them, major oil companies are currently running double page ads in the Saturday broadsheets, trumpeting their future relevance in a world where oil shortages are destined to become far more acute. This is because they know their shareholders aren’t fooled by the recent temporary windfall from oil prices, and fear that once declining discovery rates (marching on in lockstep with declining output – currently 9% pa) become generally acknowledged, there’ll be a rush for the doors. By this time, the global economy will be in tatters because, as the Hirsch Report points out, we should have been planning for the inevitable transition decades ago. The government knows this too, and expects some real problems as a result of inevitable dislocation and material shortages – which is why we have all those CCTV cameras in place, the ID card rollout (aka: your ration card), and now – taa-raa! – tasers for every police force in the land. So, to get back on topic, there won’t be all that many ‘top-earners’ around to tax, as just to survive at all, post-industrial nations are going to have to operate on a level of self-sufficiency akin to Cuba. .

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  • Most other European countries have much higher taxes for those they consider high earners and it generally kicks in well before £150,000! I think it is about time higher earners contribute their fair share to the economy. Do we want to get out of this mess YES or NO ?These high earners wont be all leaving the country at once, it is a myth.It is about time that someone looks at the increase gap between rich and poor, rather between the ever contributing middle class and the very rich. The alternative to raising taxes from the more well off is to print money.Not a great alternative I think.

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  • Wontgetfooledagain says:

    Would like to support “Panda said…” with his comment about so called entrepreneurs and their right to low taxes and also his comments about the majority of posts. Fjcruiser, however, demonstrates that not everyone is a rabid right wing conspiracy theorist. In reply to str 2007 said… you have been listening to the government spin to much, not many NHS doctors earning over £150k / year!!!!

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  • Given that the tax burden in this country falls disproportionately on the low paid, it is a disgrace that the highly paid are not paying more tax. As for the highly paid contributing to the wealth of the country, what do the low paid do? Who adds the most value? The man who sweeps the streets or the banker who breaks his own bank? I’ve always thought the notion that the high paid contribute most to the wealth of the country something of a myth. Even if they do there is no reason they should not pay a fairer proportion of tax. The rich have had a good time of it this last decade. How well off are we now?

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  • With this it seems the government is acting true to form in the interests of ‘keeping Labour in power’ rather than the country. I think this is a complete red herring, 45% take on those earning above £150, BIG DEAL, that’s going to raise what, £1bn, probably much less. Labour is saying ‘Ok we have a huge government deficit and it’s going to rise massively in the next few months, but don’t worry 99% of the population, we propose to tax the rich which isn’t you, so enjoy the tax give away and vote Labour, oh and don’t worry about the massive bill (£5,000 per household?) falling due in 2010’. Reality check – if we are heading into a full blown depression, which we probably are, then we are looking at a £200bn+ deficit, in which case Labour’s ‘tax rise’ will cover about 1/2% of it. Wonder where the rest of the money will come from? Guess.

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  • The way we see it is that in a simple model of the economy “Where one person works for one company and buys everything that they need from that company, and that person produces everything that the company needs.” In THEORY it does not make any difference where a tax is imposed on the economy, but it makes a huge difference to how those people vote in an election. So buy taxing high earners who represent a small part of the population, in THEORY the majority will be in favour.

    Unfortunately this does not work in REALITY.

    Both the VAT tax giveaway and the tax on high earners is purely a political manoeuvre and do little to benefit the economy as a whole. This is a classic miscalculation and is fraught with consequential problems.

    In PRACTICE the tax stimulus should be applied to SME businesses. This group employs both the vast majority of the population and stimulates a recovery, and gets entrepreneurs back into productions and (its the old leverage again) leverages growth in employment, tax revenue, and savings off the dole queue, housing benefit, etc.

    Sorry GBH and my little darling, you got it wrong again.

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  • expect high end houseprices to plummet now……

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  • @ Mark – house prices might fall, but only the rich with savings, etc., will be able to afford them. Joe Blogs will be out of work.

    The last thing we need is a rate reduction that is due soon. It will just drive debt and foreclosures way up when the rate rises in the latter half of the new year. We are forecasting an Election in late summer, before it gets worse than it already is.

    Get ready for the “Auction Houses” having a bumper sale this time next year. Your BTL landlord is going to have a field day, we are moving rapidly into a rental society, good or bad, the housing sector is destined to decline as a driver of the economy.

    Messing with interest rates like this is short term; show me a politician who can think more than 2 years ahead, business has to think 5 years ahead at least.

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  • I think you are discussing something that will not happen, the headline 45% tax for high earners is simply there because Labour are still on the ropes and they know it, the policy will be forgotten about and not implemented.

    Yes there will be tax cuts now but the lowest to middle income earners will pay the tax back if at all in this soon to become Mickey Mouse economy.

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  • They should have introduced the new tax a couple of years ago that’s for sure when alot of people were actually making £150k+

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  • @ Andrew, too true. As any businessman knows, you make far more profit (and more reliably) by targeting the majority of the population with cheap good offering good value-for-money. It’s a modification of the old adage “where there’s muck there’s brass”. Lots of small reliable profit (i.e. SME Businesses) is better than one off big sales (i.e. car manufacturing, etc., where the tap quickly gets turned off).

    This is why Buy-to-Let is good business, lots of small reliable profit. But house building is bad, big one-off large sales.

    Like it or not we are motoring very fast into the rental society, with it’s associated Debt Collectors being the next growth industry.

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  • p4ac. ‘This will get rid of high earners who add wealth to this once fine country. It is total madness. The government are completely corrupt and bankrupt. We let this happen and they will go after all of us. We must do a repeat of the poll tax protests.’

    Correct. Engineers, not ‘entrepreneurs’, make your lights and tellys work and your cars run. America appreciates this, does not skin them with taxes, and will take any who will go.

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