Just cos I'm an accountant doesnt mean I have anything what-so-ever to do with tax, in fact I don't
Also you are wrong about those IR figures. What they have quoted is over and above the peronal allowance:
Peronsal allowance: 4615
Starting rate 10%: +1920 (OVER AND ABOVE 4615)
Basic Rate 22%: 1921-29900
Higher rate 40%: after 29900
This means you get:
4615 Tax free
Between 4615 and 6535 at 10%
from 6536 to 34515 at 22%
above 34516 at 40%
I had neglected to take into account the 1% decrease in 2002, my apologies Make sure you understand the tables before you quote them pls Thur
But yeah I agree NI is a charade, although I dont think anyone sees thru it. It's more tax, plain and simple... However, 'fiscal drag' is not such a great killer in my eyes. The 40% tax bracket is increasing in line with inflation - earnings are increasing at a greater rate... So what?
Why should the tax bracket increase with the earnings increase and not the inflation level - inflation reflects the rate our economy is increasing at, so why should the higher tax rate go up with the earnings and not inflation?
If the government were to increase the higher tax bracket in line with earnings ratios then higher earners would be getting a 18% tax reduction on certain percentage of their earnings while the people in the lower tax brackets see no benifit.
Likewise, if the government were to keep the higher bracket increase in line with earnings increase the higher earners would suddenly see a profit increase - this cannot continue over an extended period of time, things like this have to be kept in line with the economy's increase as a whole and not certain sectors whose income levels may fluctuate vastly over shorter periods of time...
You have 2 options, increase tax in line with earnings and create riched workers and a poorer economy, or increase in line with inflation and keep the level of earnings flat (well, not flat but in line with inflation) and put more money back into the country.
Edit: I know the tax figures make sense but not sure about the earnings bllx, pls correct me if I'm wrong but that is my impression of the situation
Also you are wrong about those IR figures. What they have quoted is over and above the peronal allowance:
Peronsal allowance: 4615
Starting rate 10%: +1920 (OVER AND ABOVE 4615)
Basic Rate 22%: 1921-29900
Higher rate 40%: after 29900
This means you get:
4615 Tax free
Between 4615 and 6535 at 10%
from 6536 to 34515 at 22%
above 34516 at 40%
I had neglected to take into account the 1% decrease in 2002, my apologies Make sure you understand the tables before you quote them pls Thur
But yeah I agree NI is a charade, although I dont think anyone sees thru it. It's more tax, plain and simple... However, 'fiscal drag' is not such a great killer in my eyes. The 40% tax bracket is increasing in line with inflation - earnings are increasing at a greater rate... So what?
Why should the tax bracket increase with the earnings increase and not the inflation level - inflation reflects the rate our economy is increasing at, so why should the higher tax rate go up with the earnings and not inflation?
If the government were to increase the higher tax bracket in line with earnings ratios then higher earners would be getting a 18% tax reduction on certain percentage of their earnings while the people in the lower tax brackets see no benifit.
Likewise, if the government were to keep the higher bracket increase in line with earnings increase the higher earners would suddenly see a profit increase - this cannot continue over an extended period of time, things like this have to be kept in line with the economy's increase as a whole and not certain sectors whose income levels may fluctuate vastly over shorter periods of time...
You have 2 options, increase tax in line with earnings and create riched workers and a poorer economy, or increase in line with inflation and keep the level of earnings flat (well, not flat but in line with inflation) and put more money back into the country.
Edit: I know the tax figures make sense but not sure about the earnings bllx, pls correct me if I'm wrong but that is my impression of the situation
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