Do Labour Think Middle England Are Thick?

[youngmafbog]

Balls seems to think hitting higher rate taxpayers (those over 150K a year so not exactly millionaires) with a punitive tax rate will attract voters.

OK, tax of envy does go down with staunch labour voters, but like the Tories that is not who he is trying to attract.

On both sides the party faithful are there already it is middle England that giveth and taketh and the majority of them are not bought by taxing the, well not very, rich. (Lets remember the real rich will have good accountants and wont pay anyway, you just hit hard working entrepreneurs)

So, is this another Balls up?

http://news.sky.com/story/1201522/business-bosses-slam-labours-50p-tax-rate

[LazyGun]

LoL! Punitive!!

We are talking about hiking the rate on earnings above 150K a year from the current 45% back to 50%, where the Tories cut it from, despite not having any evidence one way or the other how much money it might save and despite needing to balance the books. They cut the taxes for the richest 1%, whilst cutting frontline public services that the less well off in this country are disproportionately reliant on.

And you call that punitive! What a joke.

[douglas9401]

Business bosses slam tax rates.
Bankers slam regulation and bonus caps
House builders slam planners
Middle England ignores the rest of us

There's an arrogance and selfishness about most pressure groups.

[AB Editor]

They did raise capital gains and increased the lower-end tax threshold LG - so it's not like the coalition is attacking one group entirely.

I personally think that the 50% tax rate feels punitive - not because these people can't afford it, but simply because it seems wrong that the government should take half of your earnings.

Youngmafbog - I don't know what Labour are up to, but it's certainly not good politics! They might be suffering from UKIP being seen as the "opposition" (i.e. biggest threat) to the Tories in the media narrative, and as such, they're getting entirely ignored.

[jno]

yes, I'd have made it 48% for the reason the Ed mentions. But I'm fine with it as I won't be paying it. I doubt many people in "Middle England" will.

[ToraToraTora]

The problem is that the left hate anyone doing ok so they must be taxed out of envy. Economics plays a poor second to their lets "shaft the rich" mantra. Sadly what they deem rich is basically anyone who has managed to get themselves an even semi comfortable life, usually through hard work. They have never grasped the basic fact that wealth needs to be created. however unplatable that may be, someone needs to provide them with the "other peoples" money they delight in spending.

[jomifl]

So Ed doesn't have an income above 150K like his socialist mates obviously.

[Gromit]

I am in two minds about this.

The 50% rate was introduced in Labour's 2009 budget as a measure to raise some quick money after the crash. It actually came in a month before the 2010 election which Labour lost. Whether the rise contributed to losing the election is debatable. It also resulted in Osborne raking in the higher yeilds for two years until 2012 when he lowered it. That was largely to put more money in people's pockets to help the economy.

I don't think it would be the end of the world to raise it again, but it does look like a bit of an own goal going into an election.

[AB Editor]

"yes, I'd have made it 48% for the reason the Ed mentions."

I can't tell if you're making fun of me or not - but regardless, I would be more comfortable with 48% rather than 50%! :)

"But I'm fine with it as I won't be paying it. I doubt many people in "Middle England" will."

This is true. Isn't this the point Youngmafbog is making? Those swinging voters of middle England really don't care?

I do think it's something to do with Labour feeling they lack identity currently.

[DTCwordfan]

Remember Healey days when earned max income tax was at 60% at >75k (I think) and 98% on the pound for non-earned >150k. The result, legitimate cheating was the name of the game - I went to Uni on one such loophole - and the brain drain.

When will Labour learn?

Drop it to 40% and continue to encourage further investment in the UK - increase the tax allowances by a 1000 or more a year and take more low income earners out of tax paying - if I was Osborne with the extra GDP tax benefits coming in, I would consider a £1500 increase this year.....everyone gains from this.

Look at what is happening in France re their brain drain to here (and elsewhere) Max tax there is now 75% - Messrs Balls and Miliband, the evidence is in the practice and history if you believe in history and your socialist counterparts in the States are realising that lower taxes do encourage the economy..

[Gromit]

// The highest rate of income tax peaked in the Second World War at 99.25%. (churchill) It was then slightly reduced and was around 90% through the 1950s and 60s (Attlee, Eden, McMillan, Douglas Home,Wilson).

In 1971 the top rate of income tax on earned income was cut to 75% (Heath). A surcharge of 15% kept the top rate on investment income at 90%. In 1974 the cut was partly reversed and the top rate on earned income was raised to 83%. With the investment income surcharge this raised the top rate on investment income to 98% (Wilson). //

It was under Thatcher and Blair that the well off were more favourably taxed.

[DTCwordfan]

Then there was Dennis Healey's famous comment. I paraphrase, 'If I could tax the wealthy at 10% in the pound, I would."

One of the major points is that wealthy folk spent a lot of their time (disproportionately) with accountants looking into ways to avoid tax, rather than actively encouraging new business, concepts, r & d, and marketing etc...... At least Thatch and Blair reversed that.....

[Gromit]

For people earning a lot of money, they would still employ ways to save ANY tax even if the rate was cut to 30% or 40% .

[emmie]

sometimes i think they do.

[jake-the-peg]

150K a year middle England!?!

That is the top 1% of earners in the UK

http://www.ifs.org.uk/wheredoyoufitin/

Exactly what is your definition of 'Middle England' ?

People Employing butlers but not running major multinationsl?

[emmie]

150k a year isnt a fantastic salary, my o/h earned half that and half of what he earned went to the government, to tax, NI, to VAT and so on.

[emmie]

interesting info

http://www.thisismoney.co.uk/money/news/article-2107031/UK-Budget-2012-Top-1-earners-contribute-income-tax.html

[jake-the-peg]

150K isn't a fantastic amount? - when you've got used to it and totally forgotten what it's like to be part of the other 99%

I'm sure a million a year seems modest after a while too.

Very easy to lose a sense of proportion wouldn't you think Emmie?

[emmie]

how many GP's work in UK, many are on that kind of salary i warrant you, they would be classed as Middle England, Middle Class, how many solicitors, how many white collar workers are on that kind of salary, more than you think. Pay more is usually how it works the more you earn the more you pay in tax, however there comes a moment when you think botox to this, giving my hard earned cash to a government that squanders it on frivolous matters, every pound you earn they take half, and as you know it doesn't stop there,

[emmie]

i never lose a sense of proportion, i don't have that kind of money, but if i earned 150k i would be paying a lot out of that in tax, insurance, likely private health care as the NHS is overloaded, and keeping many bludgers in the luxury they have become accustomed to