Cable Forum - Returning top rate tax to 40% mooted

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Returning top rate tax to 40% mooted

http://www.telegraph.co.uk/news/poli...son-urges.html

Quote:

The Chancellor has indicated in Treasury meetings that he might cut the 45p tax rate on earnings above £150,000, which the Liberal Democrats had blocked him from achieving in coalition.

Quote:

He will also use the Budget to raise the income tax threshold for those on low earnings and to make progress towards a £50,000 starting rate for the current 40p rate.

Not a bad idea, the 50p tax rate was, in a similar manner to the policy on legislating for a surplus, a poisoned chalice for a future government to repeal at their peril.

That said, I think that reversing some of the fiscal drag on the 40p rate alongside another basic rate threshold increase must take priority.

As the article and this one at Conservative Home suggest, if the Chancellor does go through with this it must be accompanied by extensive measures to replace the lost money, and some was lost as you can't just ignore the massive distortion from payments being deferred out of the 2010-11 tax year, either via improving the tax take via tax simplification and anti-avoidance or, perhaps, more council tax bands.

Our tax rates should be as low as they can be however it's essential to ensure we collect as close to every penny as possible, and that taxes are levied fairly. At the moment our ongoing property taxation is very low by international standards, and council tax quite regressive.

In before anyone flaming with rage over the prospect of a tax cut for £150k+ earners :)

I care about fairness, and the state getting the revenue it needs. Hammering the rich, if it doesn't bring in the cash, is pointless. Hammering the poor, without assisting them in mitigating the impact and allowing them a way to prosper, is cruel.