It is reported that the 45% income tax rate would apply to the "top one per cent" of earners (about 300,000 taxpayers) and raise an extra £2 billion per annum. The top one per cent of earners has an average income of (say) £300,000, so the extra tax per earner would be £7,500.
300,000 people x £7,500 each = £2.25 billion.
*sigh*
Let's assume that five per cent of them leave the UK (15,000 taxpayers) , and that those five per cent have average taxable incomes of £300,000. For each one that leaves, income tax receipts (not to mention National Insurance etc) goes down by £135,000. So we have to deduct those 'losses' from the expected gain.
15,000 people x £135,000 = £2.025 billion.
*/sigh*
About That Closet
5 hours ago
4 comments:
To every action there is always opposed an equal reaction.....
The much larger increase in revenue is the [partial] removal of personal allowance for those on over 100k. Much larger (x10+) group of people afected.
Anyway those in the UK on 300k have millions in bonusses as well. But the bonusses mostly don't go through the regular IT so unaffected by this 5%. Doubt many will leave.
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I'm intrigued at WebSite Program's assertion that bonuses "mostly don't go through the regular IT". Basis for this surprising statement, please? Seems somewhat at odds with the surge in tax receipts associated with the payment of bonuses.
WSP, that's a fair point on them clobbering the £100k plus people (there are more of them and they are less likely to emigrate) but this is even more evil that clobbering the £150k plus people.
And as Anon says, what makes you think the 5% doesn't apply to bonuses? Yes, there may be some evasion here, but there'll be all the more if there's 45% at stake not just 40%.
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