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Thread: 110m bonus! Can an annual bonus of this size ever be justified.

  1. #51
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    Quote Originally Posted by Major Sinic View Post
    My apologies, it was not my intention to suggest that there was any stated Labour Party intent to introduce an 80% tax band although I accept it came over as that. My intent was that Labour intended to introduce and enforce tax increases at the relatively low level of income of 80,000, inaccurately referring to such earners as 'rich'. It is this I object to since junior hospital consultants, plumbers, chain store managers etc can hardly be described as rich.

    Now I know that your mistake in claiming that Labour has no intention in putting anyone's tax level above 50% was genuinely made, but if you examine the current tax tables you will realise that Labour's tax increase of 5% will put people earning between 100k-120k onto a marginal rate o 67% up from an already excessive 62%.

    It is the irst time that I can recall being accused of making a straw man argument, a tactic which indicates a lack of intellectual rigour in debate and one which I abhor. The pointing out of what you seem to acknowledge may not have been deliberate was sufficient; such as accusation has cut me to the quick!
    I apologise. I should have realised you are better than to use a straw man and that your inference was unintentional. Sorry.

    As for Labour's maximum tax rate of 50%, I acknowledge that this is Income Tax only. There is also a small NI rate of 2% at this level. So that the effective combined top rate might well be 52%.

    Certainly, where the current 45% rate kicks in, the rate will be increased to 50% excluding NI. But we also pledge requesting a little bit more from those earning more than 80k. There is as yet no clarity on how this is to be achieved and what form it might take, though I expect the Tories will force a focus on this if we ourselves are still not forthcoming with sufficient details in any election campaign.

    One possibility - and it is only that because I have no psychic portal into the mind of McDonnell - is lowering the threshold of the 50% rate to 80k.

    I believe that the high marginal rates affecting a narrow 20k band between 100k and 120k are the result not so much of tax rates, but the clawing back of thresholds. This is somewhat anomalous, and excessively punitive for only a narrow band. If the proposed 50% threshold were to be lowered to 80k, I would hope that as part compensation for that this punitive anomaly could be wiped out.

    But wasn't that introduced by George Osborne as chancellor, possibly under pressure from the Lib Dems to be seen to be taking something from the better off?

    Either way, McDonnell is in Mr Reasonable listening mode right now. If you have concerns about this, try and raise them with my party. If he were to do something to significantly increase taxes on those earning more than 80k, eliminating that anomaly at the same time would be great politics for him, enabling him to don the mantle of fairness to all, even from those he is taxing a bit more.

    Might start making that point in the party.

    If I were him? I'd raise the NI threshold to the same level as the Income Tax threshold and then merge the two. Then go for a combined tax rate of 32% - same as now with NI included - over 12.5k, 42% over 50k, and a maximum of 50% over 80k, but with the anomalous clawback abolished. I'd maybe be tempted to go for 60% over 1 million 70% over 5 million, and 80% over 10 million.

    But that is not Labour party policy. It is just what I would do.
    Thatcherism is an evil dragon. Let's be Saint George

  2. #52
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    Quote Originally Posted by Major Sinic View Post
    Too much! Too much! You defeat me under a mountain of words, irrespective of their quality. I will read this thesis when I have more time and respond as and when on the main thrust!
    LOL, Verbosity is my middle name. Never really got to grips with the less is more thing, lol
    Thatcherism is an evil dragon. Let's be Saint George

  3. #53
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    Quote Originally Posted by Borchester View Post
    Are we to assume that you are referring to direct income (ie wages ) as opposed to indirect (dividends and such)?
    We have the stated intent of closing all such loopholes and I expect McDonnell is already aware of that one.

    It's one of the better known ones.

    He may well look into taxing dividends and other indirect incomes at the same rate as direct income. I'd look into that if I were him.
    Thatcherism is an evil dragon. Let's be Saint George

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