GUEST COMMENT: I am more than happy to pay 50% of my income in tax

21 June 2010

3 minute read

GUEST COMMENT: I am more than happy to pay 50% of my income in tax

Right, I'll come out of the closet and say it. I work in investment banking and I don't mind paying high income taxes.

Don't get me wrong, I'd love to be back at 40% or at the 15% that somewhere like HK levies but that's just not viable now and possibly won't be for some time to come.

Firstly, if you know now that you will be earning the 150k+ needed to tip you into the new top band, then you are in the top 0.6% of salaried people in the UK according to ASHE (The Annual Survey of Hours and Earnings) based on 2009 data.

To repeat, that is the top 0.6% of the salaried population, excluding all those people who are out of work. According to the same survey, the median gross full time salary is 25,123 and this number excludes the huge, and largely female, chunk of the work force who work part time. So there's some perspective - 0.6% of the population

As a result of being in that elite club (where the amount of tax we pay massively exceeds the average wage, again just to be clear), we can largely exempt ourselves from some serious day-to-day concerns.

We send our children to private schools with playing fields, small classes, lots of extra curricular activities and, even more importantly, the high expectations we send with them that they will do well. We pay for private health insurance, gym memberships and nice food (although that isn't always a positive for long term health).

We have holidays, books, Sky TV, dinner parties and days out. In other words, we are extremely fortunate - even if we only have 50% of what we are paid to live on, we're still exceptionally lucky.

I will pay my taxes to support the public sector in the wake of the deficit so that other people's kids can go to nicer schools, with interested teachers and a wide scope of learning. I will pay them to protect the amazing NHS and the people who work for it, as well as those who depend on its services.

I will pay them despite knowing that there are levels of administration, reporting and bureaucracy that waste the very money I'm talking about and take it away from those who need it largely because I don't have any better ideas about how to run things.

I will also pay it knowing that some people will always take a mile when given an inch and will choose benefits as a way of life rather than as a last ditch option when things get bad. They are a minority not the norm and they probably needed someone to expect more of them and offer them more opportunities along the way.

I will also pay my taxes despite the fact that they are not always spent to my taste or on things I value. I will make sure I vote for the things that matter to me and for the issues and causes I hold dear, but I will live with what is offered and if I can't I will vote against it, demonstrate, write letters, be involved.

What I can't possibly do, under any circumstances, is complain that, as one of 0.6% of the population, I'm being taxed too heavily on my salary. Capital gains tax, however, well that's another story.

AUTHORAnonymous

Insider Comment

AB
A Banker
23 June 2010
To all the individuals boasting about leaving the UK to pay less tax... Good riddance. Clearly your greed knows no bounds to the point where you're willing to uproot and disrupt your family to pay less tax. It's a lifestyle choice. I'm happy to pay 50% tax to live in the UK. Lastly..... 50% tax does not mean 'half' of anyones salary. It means 50% on the amount you earn above 150k, which is completely different.
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Mi
Michael Tee
23 June 2010
Agree with your comments; through 0.6% is not factually correct as that is only for salaried individuals. It does not count consultants and own businesses who including bonus have average wages of around 100K in the city and canary wharf. That is average, so based on that a much higher % then 0.6% would be over 150K.
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Ge
George O
23 June 2010
I am sick and tired of people ranting on pointlessly about taxation and public spending. It's mainly vacuous drivel tinged with self-interest. Fact. Most taxes deter things which should be encouraged. This is because there aren't enough bad things to tax (although a creative chancellor could do more with taxes on pollution, speeding, litter, dog crap, obesity and bankers). Fact. Most public spending is on things which many of us consider worthwhile and in an ideal world would like to see more of. Fact. Public services, just like any business, could all be run a little better.
Now if you want to discuss taxes, you have to do so in terms of trade-offs. And if you want to discuss public spending, come up with worthwhile efficiency savings suggestions.
And keep it brief.
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IR
IR35 exile
22 June 2010
Sorry - I make over 150K, but I'm a little old-fashioned as my wife doesn't work and I have 3 kids in private school.
The only thing the 50% tax rate is good for is making people who can earn a lot of money look for another country to work in. It worked for me - IR35 gave me an effective top tax rate of 54% when you include having to pay employer and employee NI contributions, and that was back when the top tax rate was still 40%. - It made me leave the UK 10 years ago - how many people will the new top rate make leave...
(Taxing the rich to help the poor is a "nice idea" - but eventually high-earners work out that forever being squeezed isn't fun, and they eventually leave for greener pastures - or have politicians forgotten the "brain drain" of the 70s)
P.S. I'm now employed in Hong Kong, where the top tax rate is actually 17%. (only singletons, or couples where both are working and have no kids yet, pay the flat 15% as those with kids are better off taking the tax allowances for the dependants.)
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Fi
Financial Genius
22 June 2010
Total taxation for the wealthy -- income taxes plus consumption taxes -- tops out around 65% in the UK. Let me repeat, 65% total tax burden. Anyone who thinks it is acceptable for a human to steal two-thirds of another human's possessions is quite clearly bonkers.
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