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Time To Rasie The Threshhold For 40& Rate?
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I think Lamont has a point the 40% rate is fast becomming the basic rate. I remember way back when I started work the 40% bracket seemed a long way away now most earners seem to be in it. personally I'd abolish the band alltogether and just have one basic rate. Well actually I'd abolish direct taxation full stop but that's another story!
I think Lamont has a point the 40% rate is fast becomming the basic rate. I remember way back when I started work the 40% bracket seemed a long way away now most earners seem to be in it. personally I'd abolish the band alltogether and just have one basic rate. Well actually I'd abolish direct taxation full stop but that's another story!
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The tax-free allowance for everyone has been raised, LG. In 2009-10 it was £6,475. In the coming year it will be £10,000, an increase of some 54% when inflation over the same period was about 13%
Meantime, in 2009-10 those earning more than £43,875 would pay 40% tax whereas next year a salary of more than £41,866 will attract the higher rate. If the higher rate threshold kept pace with inflation it would now be around £49,500 and if it had risen the same as the basic allowance it would stand at around £68k.
There isn’t much point in raising the basic tax free allowance if the higher rate threshold is to be lowered. Unless, of course, the aim is “wealth redistribution”.
Meantime, in 2009-10 those earning more than £43,875 would pay 40% tax whereas next year a salary of more than £41,866 will attract the higher rate. If the higher rate threshold kept pace with inflation it would now be around £49,500 and if it had risen the same as the basic allowance it would stand at around £68k.
There isn’t much point in raising the basic tax free allowance if the higher rate threshold is to be lowered. Unless, of course, the aim is “wealth redistribution”.
"There isn’t much point in raising the basic tax free allowance if the higher rate threshold is to be lowered. Unless, of course, the aim is “wealth redistribution”"
So raise it again, if you are determined to offer a tax cut at a time when we are "all in it together" and the primary objective is supposedly to "pay down the deficit". Raising the tax free allowance further would aid all taxpayers, rich and poor alike, rather than raising a threshold to aid the 1 in 6 taxpayers that currently pay tax on some proportion of their earnings over £41K.
So raise it again, if you are determined to offer a tax cut at a time when we are "all in it together" and the primary objective is supposedly to "pay down the deficit". Raising the tax free allowance further would aid all taxpayers, rich and poor alike, rather than raising a threshold to aid the 1 in 6 taxpayers that currently pay tax on some proportion of their earnings over £41K.
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