Clegg Middle Class Tax Squeeze

[Ignitionnet]

I don't see good news for anyone just a feeble politically motivated opportunistic act that isn't going to help relations with the banks whose lending the coalition are going to be increasingly relying on.

Typical of Osborne actually, transparent attempt to give himself some ammunition in today's debate with Balls and to hell with the consequences, which handed Balls the argument before it had even started.

[Chrysalis]

Originally Posted by Ignitionnet

Hmmm.

http://www.telegraph.co.uk/news/news...ick-Clegg.html

http://www.telegraph.co.uk/news/news...help-poor.html

Add that to the Child Benefit cut and it'll hurt some people quite grievously.

It's 'progressive' but also strongly anti-growth. Typical Liberal Democrat policy actually

Thoughts? Will anyone making around that sum notice the pain?

EDIT: This one could be phrased better but I largely agree - http://www.telegraph.co.uk/comment/c...stupidity.html

Shuffling money from one group to another isn't going to reboot the economy, increasing opportunities for everyone to keep more of their money and generate their wealth more easily will.

Calculating the impact all of this will have on this household it's far from inconsiderable, over 2,000 quid a year ignoring VAT rises, doesn't really make me feel overly motivated to go and work that bit more and make that bit more money when the government is eating 51% of a large proportion of it before I see it.

Whats wrong with it.

If you move into the higher tax band, your entire salary doesnt suddenly get taxed at 40%, its just the little bit above the threshold. So as a % of earnings the pain felt by those affected by this is significantly less than the pain would be to lower earners for scrapping the 10k threshold. So its shifting a burden onto a part of society with more ability to pay it. I think the article you linked to which rambles on about productive people is an insult to low earners, as who is to say someone on 45k a year is more productive than someone on 10k a year?

Also those only right at the threshold will probably balance out anyway as they also get the higher no tax threshold.

[Ignitionnet]

Originally Posted by Chrysalis

I think the article you linked to which rambles on about productive people is an insult to low earners, as who is to say someone on 45k a year is more productive than someone on 10k a year?

Err the people paying them the 45k a year are the ones to say someone on 45k a year is more productive. Most people are paid by their employer according to the value they provide the company.

---------- Post added at 08:44 ---------- Previous post was at 08:41 ----------

Originally Posted by Chrysalis

Whats wrong with it.

Redistributing wealth transparently through the tax system isn't the government's job. If they want people on lower incomes to pay less tax they can stop spending their money and reduce taxes on them without taking it from other tax payers.

---------- Post added at 08:47 ---------- Previous post was at 08:44 ----------

Originally Posted by Chrysalis

If you move into the higher tax band, your entire salary doesnt suddenly get taxed at 40%, its just the little bit above the threshold. So as a % of earnings the pain felt by those affected by this is significantly less than the pain would be to lower earners for scrapping the 10k threshold. So its shifting a burden onto a part of society with more ability to pay it.

It's yet another tax on higher earning people, part of a long series of taxes that make it less and less worthwhile to aspire to earn higher amounts. Again if the government wants to make the tax system fairer they can start spending it more wisely instead of having parts of the coalition obsessing over progressivism and other parts playing one-upsmanship with the opposition over who can tax the most and spend the most in some areas.

EDIT: Of course there's also been a load of regressive tax increases as well - our tax burden as a % of the economy has increased by 25% thanks to the previous government, public sector spending by 50%.

[Chrysalis]

On productivity tho it will always be a personal view, it is of course possible these 45k earners may well be more productive, however its not like comparing someone who works full time to someone who doesnt want to work, in this case we are comparing two sets of full time workers who are in different wage brackets. There can be various reasons for the difference in salary.