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24 Nov 2008
Britain's biggest earners face higher taxes as Prime Minister Gordon Brown and Chancellor Alistair Darling attempt to reduce a borrowing bill tipped to reach close to £120bn next year.
The chancellor is expected to announce a new top rate of tax of 45% which will apply to those earning more than £150,000, The Times reports.
The new rate – which probably will come into effect immediately after the next general election – is expected to be among the deferred tax rises announced today to show the Treasury intends to rebalance the books.
The higher rate is said to affect almost 300,000 income earners and raise about £1.2bn. Borrowing is forecast to rise to record levels next year after Darling today in his pre-budget report cuts 15%, lowers income tax by £120 for those on the basic rate and postpones planned rises in vehicle duty and corporation.
Further reading:
Brown promises tax cuts, help to small business
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45% tax rate
This is in part to pay for a rumoured reduction in VAT which is intended to help stimulate the economy. The idea that a reduction of £2.12 on an item costing £100 will encourage spending is ludicrous - consumers wll wait and save 15% or 25% in the next sale. So public finances are worse off to the tune of £12bn this year - a spend which will have no impact on the recession - and we have to live with higher taxes and possibly further downward pressure on sterling to pay for this government's misguided efforts to get us out of the mess they in part got us into. Better pour money into construction and other infrastucture projects and small business support measures to reduce unemployment over the next few months.
Posted by: Geoff, 24 Nov 2008 | 00:00
45% income tax bands rise UK? Lower tax band ¼ less in Germany!
There is now a discussion in UK that the 45% tax band for the high earners is unavoidable, since the money system has not worked.
But what about the lower paid workers? They pay a quarter less in Germany in comparison to the UK. Why???
So, if we introduce new tax bands, we will have 3 tax bands at 20%, 40 % and 45% in the UK and high government debts.
Tax Rates UK 2008/9 (POUND):
Starting rate for savings: 10%* £0-£2,320
Basic rate: 20% £0-£34,800
Higher rate: 40% Over £34,800
Please compare this with Germany 2008/9 (EURO) :
O% Up to 7,664
15% 7,665-52,152
42% 52,153-250,000
45% 250,001 and over
http://www.worldwide-tax.com/germany/germany_tax.asp
As you can see, in Germany (concentrating on the middle class with lower government debts) the tax band for the low income earners is ¼ cheaper than here in UK.
Posted by: simple, 24 Mar 2009 | 00:00