The 50 p tax rate

 

               We need to raise more tax from the rich to help cut the deficit. That much many people agree. The question is, how do you maximise the tax take from the rich.

             In the past when the UK has cut rates of Income Tax and Capital Gains tax the amount paid by the rich has gone up, and the proportion of the total tax paid by the rich has gone up. Today the Adam Smith Institute reinforces this message. They say the 50p rate will lead to lost revenue and slower growth. The expect more rich people to emigrate, and more to find ways of  avoiding tax legally.  Their Report is entitled “The Revenue and Growth effects of Britain’s high personal taxes”.

This entry was posted in Blog. Bookmark the permalink. Both comments and trackbacks are currently closed.

45 Comments

  1. lifelogic
    Posted March 10, 2011 at 7:18 am | Permalink

    This is all quite obvious.

    The rich are often looking to grow their money not to spend it on consumption them have enough for that already.

    With a 10% return (rather hard to find) and say 4% inflation and 50% tax you can just about preserve your wealth in the UK until you die and then they take another 40%. So why put it in the UK? You are just giving it away.

    If you do this for 20 years before death they have reduced your capital to just 61% (of what a no taxed return would have been) and reduced it in real terms to 73% of what you started with.

    And that is if you investment do well at 10% pa.

    Come to the UK and give your money away so the state to waste it for you. Perhaps on daft green energy schemes, HS2 and the like.

    This seems to be the general message.

    • oldtimer
      Posted March 10, 2011 at 9:38 am | Permalink

      Agreed. The arithmetic is compelling. Let us hope that the Chancellor can do the sums too.

  2. alan jutson
    Posted March 10, 2011 at 7:44 am | Permalink

    If ever there was a disincentive to work harder, it is a tax rate which takes a bigger percentage of your earnings (add in National Insurance), than a person gets for themselves.

    If ever there was a disincentive to save, it is a bonus/interest rate which penalised savers from saving for their future, where with inflation the value of those savings (which are again taxed) reduces with every year that passes.

    So why work harder to earn and save, when the result will be that you go backwards.

    Perhaps better for many, to get the work life balance right, and live for the moment.

  3. Javelin
    Posted March 10, 2011 at 8:34 am | Permalink

    I now work at a hedge fund. 50 of the highest earners moved to Switzerland to avoid the high tax rate.

  4. Brian Tomkinson
    Posted March 10, 2011 at 8:48 am | Permalink

    The government is reducing corporation tax from 28% to 24% to encourage business, enterprise and growth. They, no doubt, expect to collect more tax as a consequence. How strange that they don’t employ the same logic to personal taxation.

  5. Geoff not Hoon
    Posted March 10, 2011 at 8:59 am | Permalink

    Mr. Redwood, If someone chooses to live abroad that’s their choice and they get taxed in the country to which they have moved. What is galling is the number of very rich who come and go from the likes of Monaco under absurd but legal UK tax rules that mean they pay virtually nothing in tax compared to those living here. All the big accounting firms make it their business to ‘sell’ these schemes and earn a fortune in fee’s for creating the necessary admin. to make it work and it is time the loophole was plugged.

    • lifelogic
      Posted March 10, 2011 at 9:18 am | Permalink

      Plugging the “loophole” (non domicile rules etc.) would not really work the people concerned would leave or not come to the UK and just stay based in Monaco and Switzerland. The already pay a £30K each non dom tax on top of any UK taxes due. Far more than their actual share.

      The solution is a lower tax for all so that on balance the UK becomes a good base for all to live work and invest. Make a good start by getting out of the EU like Switzerland and get taxes down to circa 25% of GDP and simplify to reduce numbers of people working as tax advisers . This is quite enough to run an efficient state sector as many countries have shown.

      • Geoff not Hoon
        Posted March 10, 2011 at 12:35 pm | Permalink

        LL, we will probably have to agree to disagree over folk exploiting the loophole. We dont need folk in Monaco or Switzerland running UK based business’s we can do that from here as you say with a much lower tax regime. I posted last year as to what an appalling decision Osborne made in raising VAT to 20%. I suggested, but no one took up the point, reducing it would stimulate demand not stifle it which is what has happened now.

        • lifelogic
          Posted March 10, 2011 at 6:32 pm | Permalink

          The UK does however need people to invest in the UK – where ever they are based – we cannot afford to deter them. Businesses have to structure themselves to compete or they go out of business. If your competitors have cheaper Monaco/Swiss based finance or investing shareholders and lower tax dividend arrangements you may have little choice but to do the same or give up.

          Best just to get low tax small government in the UK though just needs a proper government to arrange this.

        • Jon Burgess
          Posted March 10, 2011 at 8:44 pm | Permalink

          Since when did it become wrong to legally seek to pay as little tax as you can? Surely this is everyones right and the sensible thing to do. I take my hat off to anyone who can wade through the now incomprehensible UK tax system and work out ways to legally keep as much of their own money as possible.

          Countries like Monaco exist because other countries tax too much. Ask yourself how Monaco makes ends meet when they don’t tax residents incomes? The wealthy spend locally and this filters down to the whole community. And what would Monaco spend tax revenues on? Gold plated road surfaces for the Grand Prix? Monaco’s model is something the UK should aspire to; Spend little, tax little, but I don’t see that happening on the Coalition’s watch.

          • Bob
            Posted March 11, 2011 at 2:13 pm | Permalink

            Try explaining this to a socialist – they just don’t understand. To a socialist it’s all about punishing success and rewarding failure. No wonder the immigration flows are from socialist states to capitalist states and not vice versa.

          • lifelogic
            Posted March 12, 2011 at 6:00 am | Permalink

            Agreed it is highly moral to reduce your tax legally and use the money wisely rather than allowing the state to take it and usually spend it badly on pointless or damaging things. It is better for all if you do.

          • lifelogic
            Posted March 12, 2011 at 6:08 am | Permalink

            Bob – you cannot explain to Socialists they just have a religious belief based on envy and emotion perhaps even written into their genes no amount of logic will move them. Any more than trying to tell a cuckoo not to lay its eggs in someones else’s nest will change anything.

            Is it inherited I wonder like the cuckoo?

          • Bazman
            Posted March 12, 2011 at 2:49 pm | Permalink

            Monaco is a tiny state in the South of France mainly populated by rich old people. Hardly something to aspire to. Britain will never be like this or Hong Kong as we have a large and diverse population and are a large country. The tax spent by governments is often used on the infrastructure of the country. Reagan tax cut just made the rich richer and little else. You will spend you tax rebate on a foreign car.
            The basis of most Socialist belief is ‘Social Justice’ Google it. Scotland for example has a strong natural sense of social justice which goes some way as to explaining why a Scottish Tory is such rare bird.

  6. zorro
    Posted March 10, 2011 at 9:11 am | Permalink

    Agreed Lifelogic, if they want growth and investment they must radically reduce taxation and work with human nature. The Laffer curve argument and historical analysis shows that lower rates bring more money in taxation and stimulates economic growth……

    Unfortunately, socialists do not understand this….their mantra is as Reagan stated, ‘If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.’

    Zorro

    • lifelogic
      Posted March 10, 2011 at 1:06 pm | Permalink

      “Unfortunately, socialists do not understand this” they tend not to work on understanding just “emotion” and “envy” and a total failure to understand human nature.

      They cannot even work out that taking money from in high taxes from people who manage it well and giving it to people who manage it very badly through the “equality” agenda is rather unlikely to make the economy better.

      • Bazman
        Posted March 15, 2011 at 9:34 am | Permalink

        The Reagan tax cuts just made the rich richer and little else. You presume that the rich will invest their money in something constructive. Envy does not come into it and you will find that very rich people are often the ones who think they are hard done by.

        • NeilH
          Posted April 5, 2011 at 9:54 pm | Permalink

          Bazman – Under Reagan taxcuts – Total tax revenues climbed by 99.4 percent during the 1980s. Once the economy received an unambiguous tax cut in January 1983, income tax revenues climbed dramatically, increasing by more than 54 percent by 1989 (28 percent after adjusting for inflation).
          The share of income taxes paid by the top 10 percent of earners jumped significantly, climbing from 48.0 percent in 1981 to 57.2 percent in 1988. The top 1 percent saw their share of the income tax bill climb even more dramatically, from 17.6 percent in 1981 to 27.5 percent in 1988.

  7. Euan
    Posted March 10, 2011 at 9:30 am | Permalink

    The real problem is that the UK government spends too much. Not just a little too much but massively, enormously, overwhelmingly too much. The Coalition has not even scratched the surface. At the rate we are going Sterling will be worthless and we will all be broke. If only some politicians had the courage to tell the truth and actually make people face up to the fact that government is not the answer to anything, but of course they wouldn’t do that. Too much self interest involved.

    • alexmews
      Posted March 10, 2011 at 10:35 am | Permalink

      Well, to be fair, euan, politicians are ultimnately responding to public demands on spending. the source for the demand for more spending / ringfence the NHS etc etc is The Public.

      There is seemingly no such thing in the UK as a broad-brush ‘taxpayer’ movement where the taxpayers of this country demand the government deliver value for money. The Taxpayers Alliance is doing a good job but it is hard to say they compete against the general media thread of ‘public sector spending = investment’ that was parrotted by the last government and apparently not reversed yet with the Coalition.

      it is easy to blame politicians – and I belive we do have too many, and too much government in general (in my case london & mayor; local council; national MP; regional MEP; Lords, Euro Commission) – but I do tend to try and look closer to home when the ‘something must be done’ crowd starts to bay. Why does somehting need to be done and – if it does – why with my taxes in the first instance?

      The review of Canada’s deficit reduction programme in 1980s / 90s before the elecion seems to have died. They (and i was there at the time) withdrew from entire areas of government activity to reduce deficit & debt (including a unified Armed Forces as opposed to Army, Navy, Airforce). Canda is now (amazingly to me having grown up there) a Low Tax Regime as compared to UK. Ditto Australia.

      Politicians will stop spending your money when we tell them decisively to stop spending our money. Too many people it seems to me like being bribed by government with their own cash.

      • alan jutson
        Posted March 10, 2011 at 11:14 am | Permalink

        alexmews

        “Too many people it seems to me like being bribed by government with their own cash”

        Wrong

        Too many people like being bribed by government with someone elses (who pays tax) cash.

        The above reflects Gordon Browns mantra of a social engineering policy, where the majority need to depend upon the state, (income support, tax credits, tax free benefits and the like) so they then never vote against the State, because it would cut off the hand that feeds them.

    • lifelogic
      Posted March 10, 2011 at 1:12 pm | Permalink

      “The real problem is that the UK government spends too much.” and most is spent very badly and often on pointless or even negative things.

      Worst of all much is spent on propaganda to persuade the mainly non tax paying voters of the need for even more state intervention at all levels of government and for more so called “services”. A tradition Cameron seems to wish to maintain.

  8. Scott Wright
    Posted March 10, 2011 at 11:08 am | Permalink

    lifelogic

    “Come to the UK and give your money away so the state to waste it for you. Perhaps on daft green energy schemes, HS2 and the like.

    This seems to be the general message.”

    This for me is the real crux of the debate. Not only are we charging far too much tax not just on the wealth creators but on the poor & middle income earners, this Tory government far from doing what Conservatives advocate which is low tax, small state help for the poor through NO tax & a sensible welfare system have actually taken one crap system to replace it with an even more complex even more expensive to administer system. Universal Credit is a joke and is being paid for by taking from those in the £12k+ salary bracket in order to encourage the unemployed to work part-time. What’s the point?

    There are far too many items of government expenditure which they simply have no business spending money on, the Labour party keep banging on about cuts but this Tory government aren’t even making ACTUAL cash cuts, they are only slowing the rate at which state expenditure increases and hoping (a fools hope with the 50% tax in place) that the economy grows faster than the state.

    Make some real cuts!!

  9. Robert
    Posted March 10, 2011 at 11:35 am | Permalink

    Sadly John where is the 80% cuts and 20% tax increases that this coalition indicated was the way forward to both cut the deficit ( which everyone keeps focusing on) and ultimately the total absolute amount of Government debt outstanding? More importantly this ‘Frankenstein coalition’ government is adopting socialist measures that squarely targets the middle class to pay for the price for Labour’s incompetence, far worse than that which the labour government had planned to do by effectively taxing the middle class to over 70% of their earnings (40% Income Tax + 12% NI Tax + 20% VAT + 5.1% RPI Inflation (inflation is a stealth tax that the population has been conditioned to view as beneficial when it is actually an earnings and savings purchasing power destroyer).The policies announced to date only pay lip service to spending cuts on an out of control welfare state with the largest budgets that deliver no output for additional resources such as the NHS being ring fenced for growth. The consequences of this is that government spending will NOT be cut and instead continue to increase every year from £680 billion for 2009-10 to at least £739 billion for 2014-15.

    Reply: I have always told my readers the strategy is based on increases in spending and in tax revenues.

    • Scott Wright
      Posted March 10, 2011 at 4:03 pm | Permalink

      @ Mr. Redwood’s reply: Yes but you’re actually an elected MP from the party in government and in a prime position to kick up a stink about it and push for some actual cuts. You sir are a hypocrite for preaching to the choir instead of working with our more sensible party members and making young Mr. Osborne see sense and implement a budget based on economics and not political populism.

  10. Glenn Vaughan
    Posted March 10, 2011 at 11:49 am | Permalink

    John we don’t require the Adam Smith Institute to state the obvious. Arthur Laffer and his Laffer curve demonstrated the same points about incentives and disincentives over 30 years ago.

  11. English Pensioner
    Posted March 10, 2011 at 12:14 pm | Permalink

    Its time someone explained that even if the government taxed top earners at 100%, the money raised would be peanuts compared with the government’s debts; although they get a lot of publicity, the number of real hight earners is actually quite small compared with the overall population.
    When I was working, the top rate of tax at 40% was enough to deter me from seeking further promotion on the basis that the extra pay, after tax, just wasn’t worth the hassle. It was more sensible to remain in a post where I got home on time than work the inevitable longer hours with increased stress. It also meant that I was not too tired and had time to look after the garden rather than employing someone to do it So financially I broke even, the tax authorities and a gardener lost out.
    How many other people are going to adopt the same attitude? Is this what the country really wants?

  12. John B
    Posted March 10, 2011 at 1:38 pm | Permalink

    “We need to raise more tax from the rich to help cut the deficit. That much many people agree.”

    I don’t and I’m ‘people’ and I am not rich.

    Raising less tax would cut the deficit as Idiot Central would have less of our money to squander.

    It was Government awash with tax revenue that got us into this mess – and look at the spendthrift EU with its unstoppable tap of ever increasing Bounty.

    You don’t wean an alcoholic or druggie off their addiction by giving them more of it.

  13. startledcod
    Posted March 10, 2011 at 1:43 pm | Permalink

    A PARABLE FOR OUR TIMES

    Suppose that every day, ten men went to the pub, and drank exactly £100 worth of ale among them. If they paid their bill the way we pay our taxes, the breakdown would be roughly as follows:
    The first four men (the poorest) would pay nothing. The fifth would pay £1. The sixth would pay £3. The seventh would pay £7. The eighth would pay £12. The ninth would pay £18. The tenth man (the richest) would pay £59. So, that’s what they decided to do.
    The ten men drank contentedly together in the saloon bar until the landlord, meaning to be helpful, presented them with a dilemma. “Gentlemen,” he said, “you’re my best customers. To show you how much I appreciate your trade, I’d like to give you a discount. From now on, I’ll knock £20 of the total bill for your drinks”. Drinks for the ten men would now cost just £80.
    The group wanted to carry on splitting their bill in the way that we pay our taxes. So, obviously, the first four men, those least well off, would continue to enjoy free beer. What, though, of the other six? How could they divide the £20 discount in such a way that everyone got his fair share of the windfall? They realised that £20 divided by six is £3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink.
    So, the bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, following the principle of the tax system they had been using. This is how the bill now looked.
    The fifth man, like the first four, now paid nothing (100 per cent saving). The sixth now paid £2 instead of £3 (33 per cent saving). The seventh now paid £5 instead of £7 (28 per cent saving). The eighth now paid £9 instead of £12 (25 per cent saving). The ninth now paid £14 instead of £18 (22 per cent saving). The tenth now paid £49 instead of £59 (16 per cent saving). Each of the six was better off than before. And the first four continued to enjoy free booze. But, as they left the pub, the men began to compare their savings.
    “I only got a pound out of the £20 saving,” declared the sixth man. He jabbed an accusing finger at the tenth man,”Why should he get £10?” “Too right,” exclaimed the fifth man. “I only saved a pound too. It’s unfair that he got ten times more benefit than me!” “That’s true!” shouted the seventh man. “Why should he get £10 back, when I got two measly quid? The system is rigged in favour of the toffs!” “Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. It’s always the worst off who get neglected by the politicians!”
    The nine men dragged the tenth into the car park and gave him a thorough kicking.
    The next night the tenth man didn’t show up for drinks, so the nine sat down and had their beer without him. But when the bill came, they found that their money didn’t even cover half of it.

    Hattip – Daniel Hannan

  14. christopher
    Posted March 10, 2011 at 4:05 pm | Permalink

    It is never a surprise that wealthy people have no appetite to give money away and I can only imagine them clutching handfuls of cash jumping up and down in celebration of their greed. But I can also imagine the hardworking poor trembling in the cold dreading the postman delivering another bill.

  15. Gary
    Posted March 10, 2011 at 5:06 pm | Permalink

    That is a great story. Here is the HMRC statistics on income tax paid by income percentile groups:
    http://www.hmrc.gov.uk/stats/income_tax/table2-4.pdf

    In 2009/10, 54.3% of income tax was paid by the top 10% earners and 25.1% by the top 1% earners. The lowest 50% of earners contributed 11.4% of income tax.

    We already have an extremely progressive tax system.

  16. A.Sedgwick
    Posted March 10, 2011 at 6:06 pm | Permalink

    This falls into the category of government choosing to ignore the blindingly obvious. There are numerous instances of these blind spots and it is one of the mysteries of our democracy why this should be the case.

  17. REPay
    Posted March 10, 2011 at 7:03 pm | Permalink

    The 50% tax was a political ruse by Labour on their way out of office. If the Tories repeal it they will cry foul! The fact that the damages public finances is nothing to a party whose role is to damage public finances and then sit on the sidelines and complain until crredit has been restored and the voters give them a kicking for the kootz…Except this time there are any apparently, even though they have made it look like there are. Brilliant!

  18. DisgruntledTory
    Posted March 10, 2011 at 7:20 pm | Permalink

    As the Adam Smith Insitute points out, the effective marginal rate of income tax is actually 60% at an income level of £100,000 due to the aggressive clawing back of the personal allowance.

    Nigel Lawson recognised that a tax rate of 60% was counter-productive. It is regrettable that George Osborne cannot.

    The absurdity of having a higher marginal rate at £100,000 than at £150,000 could be simply addressed by reducing the rate at which the personal allowance is lost (say £1 per £4 earned over £100,000 rather than £1 per £2 earned ) which would go some way to reducing the disincentive at marginal cost to the Treasury but alas this seems beyond the wit of the present incumbent of No. 11.

  19. Jon Burgess
    Posted March 10, 2011 at 8:31 pm | Permalink

    ‘We need to raise more tax from the rich to help cut the deficit. That much many people agree.’

    I honestly would never have expected this from you, Mr Redwood. Why should the rich pay more tax when they already pay by far more than others? The whole point of a flat rate of tax is that those on higher incomes pay more in total tax already than those on low incomes. The amount in tax as a percentage of income might be lower, but the total amount is more.

    Incidentally, who do you regard as rich? Those now caught paying higher rate income tax because your government has reduced the higher rate tax threshold for the first time in living memory? Those on MPs salaries with wonderfully extavagant allowances?

    How about CUTTING SPENDING and reducing taxes? That would be the conservative thing to do. Maybe you’re spending too much time getting cosy with your coalition partners.

    • Bazman
      Posted March 11, 2011 at 3:34 pm | Permalink

      It’s called Civilisation. Another flat tax fantasist. You seriously think it is not fair that the rich should pay more tax?

      • Jon Burgess
        Posted March 11, 2011 at 8:37 pm | Permalink

        They do pay more tax, that’s the point. But tax them too much and they go somewhere else – tax revenues go down, then who benefits? This was a lesson learned from 98% super tax 40 years ago.

      • lifelogic
        Posted March 12, 2011 at 6:28 am | Permalink

        Fair would be if everyone paid a fixed fee for the services they actually get. A flat tax mean higher earners pay perhaps 20+ times more than they get back. Increasing rates with income shift this to perhaps 40+ times.

        Flat tax is already discriminates against the higher earners quite enough.

        • Bazman
          Posted March 12, 2011 at 2:34 pm | Permalink

          How did these high earners get this money? That’s right? from the infrastructure and education of the work force of this country in most cases.
          Where would the shortfall of tax came from with all these tax cuts? Manufacturing could not cover it and a lot of the tax that was not taken would be spent on foreign made goods instead of the infrastructure of the country.
          What if you do not have the money to pay a fee for services? Do without? See how far that one gets you..
          Do you not think it is fair the rich should pay more? Justify why they should not. Most 50p tax payer do not have the resources to leave the country and the Super rich and their tax havens need pursuing like pirates which is what a lot of countries are beginning to do.

          • Jon Burgess
            Posted March 12, 2011 at 8:12 pm | Permalink

            You don’t seem to be reading what I say.

            The rich already pay more than the poor, by the simple fact that a higher tax rate on a larger sum means more in tax. What is it about this that you do not get? So, no, I don’t think the rich should pay more because they already pay more than anyone else.

            The risk with increasing the income tax burden on the rich is that they will find ways of legally avoiding it, and/or move somewhere more tax friendly and take their disposable income with them. Granted not all of them will go, but enough of them will to make a difference. So what you end up with is in fact, lower tax revenues from higher tax rates; this was comprehensively proved when the UK had 98% income tax rates.

            So, there’s a simple lesson for you: lowering tax rates actually increases tax revenues – it encourages people to earn more. Increasing tax rates reduces tax revenues.

            Of course, there’s also the other missing part of this equation: If the Government spent less, they’d need less tax revenue. So, as I think I said earlier, the Government needs to really cut spending. Simples.

  20. Bazman
    Posted March 11, 2011 at 4:14 pm | Permalink

    All in it together except if you earn more than average? It would be nice for the average earner who pays out a far larger percentage of their earnings as tax than most 50% rate payers to avoid some tax than wealthy people pontificating about tax whist paying as a percentage very little. It’s like that fat git Mr Judgemental in the pub boring everyone who is struggling in one form or another, about how hard his life is and could only afford three holidays a year and can now only afford a new BMW every two years instead of an Aston martin every year not to mention his five kids, ex-wife, mistress, girlfriend, and employees demanding pay rises. Miserable git Daly Malle joins in bleating about the price of beer and how can crisps be the price they are when you think about how many potatoes would fit in a crisp packet.
    The 50% rate may or may not bring in more money, anything by the Adam smith institute is going to have a right wing bias. The 50% rate was a political decision to send out a message that the rich should pay more. Which they should at least in principal personally should. Conservatives. believe this I’m sure.
    Instead of hiding, perhaps some of the contributors could enlighten and entertain us by explaining why the poor and middle income tax payers should pay more tax than more wealthy people, which they do. You know as soon as you crawl out from under your stones you will get squashed.

    • Jon Burgess
      Posted March 12, 2011 at 8:17 pm | Permalink

      I smell the reek of envy on you Bazman.

      The 50% rate may or may not bring in more money…

      Well, if it doesn’t bring in more money, what’s the point of it then? Oh yes, as you say to send out a message to the successful that you are not welcome here. Lord help us.

      • Bazman
        Posted March 13, 2011 at 10:01 pm | Permalink

        Envy or social Justice? It’s called morales Jon. I’m’ sure you’re big on them and very little else. I’m a 40 something who wants to take the hypocrites and their church down. Love peace and appiness that don’t exist..

  21. Lindsay McDougall
    Posted March 12, 2011 at 1:52 am | Permalink

    Not only is the 50p income tax wrong but all of the income tax rates and thresholds are a complete and utter shambles. Here’s how to reform income tax and NI in order to achieve a bit (not a lot) more revenue and reduce the burearcratic overhead in collecting them.

    (1) If the threshold at which any income tax is paid rises to £10,000 then the standard rate has to rise.
    (2) The threshold at which the 40% income tax rate kicks in has been steadily reduced in real teams, under both parties, since Norman Lamont’s 1993 budget.
    That process should be stopped, then steadily reversed.
    (3) Get rid of the 50% rate – as JR says, it is counterproductive.
    (4) Now that the contributory principle for state pensions is being more or less abandoned, why retain NI or the bureaucrats who run it? Consolidate NI into income tax.
    (5) Recognise that is grossly unfair that households receiving income from one earner pay much more income tax than households receiving a similar income from 2 earners, and introduce transferrable allowances.

  22. christopher
    Posted March 13, 2011 at 3:17 pm | Permalink

    The rich are still jumping for joy and the poor are jumping up and down to keep warm. Tax on receipts for the rich are large, large houses, fast cars and wonderful holidays are still on the agenda. The wages for the low paid are taxed and small houses, rented rooms and no holidays where luxury is a hot bath once a week.
    We can all strive to do better and aspire to earn more but the most necessary jobs required for society to function are low paid and reliant on dedication with a commitment to a low wage. This is when common sense should prevail and the tax burden levied on those that after tax has been deducted are still able to fully enjoy their life.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

  • John’s Books

  • Email Alerts

    You can sign up to receive John's blog posts by e-mail by entering your e-mail address in the box below.

    Enter your email address:

    Delivered by FeedBurner

    The e-mail service is powered by Google's FeedBurner service. Your information is not shared.

  • Map of Visitors

    Locations of visitors to this page