Election 2019 - promises

Justapunter said:

We are lucky enough to earn above that. We work hard and pay just under 200k a year in direct PAYE employment taxes and employee NI. Plus, being as open as I can be on a forum, some tax efficient structuring to try to get advantage of tax allowances and breaks as well (not without risk). Plus employer NICs. We don’t burden the NHS particularly (private healthcare), we don’t use the state education system resources. We pay a lot of consumption taxes as well. We know we are on decent/ good/ great/ crackers money (delete as appropriate).

In return we rise at 0515, go to work before rush hour and return after, work until work’s done (through the night if needed) we work away, we take risk and responsibility for thousands of people and their livelihoods (and in her case, actually life or death...), we are on call 24/7 and during holidays - we work hard and have a lot of stress. At what point should we “have paid our fair share”? At what point in taxation do we feel that “do you know what, why bother, we’ll cut our effort to keep under tax brackets and cut our spending accordingly. See the doctors and them refusing to work as it just hits them via their pension cap and extra tax. If we did the latter, as I said before, we will spend less. So we would earn less, so less tax take, and we will generate less, so less corporation taxes and we will spend less, so less will trickle into the economy. How is that a net gain for anyone. It’s a short term take with potential long term negative consequences.

We fully accept we should pay a lot in tax. We do. But you can’t keep milking us. And just wasting the tax take on social welfare. Not investing and building the UK. And that’s the problem. Neither party spends our (and your) money wisely.

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Assuming the information you have provided is correct. I suggest you should stop working after the first 2 months every-year and give someone else a go. Trickle down economics (which seems to be the basis of your argument) has been proven to be bogus time and time again. If money is injected in the bottom 5% of the earnings structure it is spent time and time again on the essentials that people need to live and survive. If money is injected into the top 5% of the earnings structure it just gets syphoned off into private bank accounts, offshore tax havens, and frivolously spent on cars, yachts, massive mansions and other things that destroy the planet for the rest of us.

Mikey C said:

Worth remembering the 2% NI which is also charged, so 50% is really 52% and 45% really 47%

Personally I don't think it's morally right to have a tax of more than 50% on earned income. And it's academic with the super rich, as they have a network of companies and off shore bank accounts to shuttle their money around, or would relocate to tax havens anyway, so it wouldn't affect them

I also don't think the vast salaries and bonuses some people at the top are being paid are morally right either, but that's a separate issue.

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Not to mention the 13.8% employers NIC, especially unfair on personal service companies caught by IR35.

I agree, anything over 50% is unacceptable. It's why the marginal rate of 62% on those with incomes between £100k-£126k is doing so much damage (doctors etc). Taking home just 38% of the pay you get for the extra session/shift/day isn't worth it to lots of people.

We need a limit of 50%, and a linear/progressive line of tax/nic to get rid of these cliff edges, stupidly high marginal rates, etc. The marginal tax graph should be a sloping straight line, not a mountain range with peaks and troughs!

45107 said:

So this is not a EU problem. It is something completely within the complete control of the UK government ? We chose the VED ?

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Correct. To see how an alternative focused on HGVs, can work within the EU see the viatoll system being rolled out in Poland. There is now a legal requirement for all vehicles over 3.5 tonnes to carry an RFID box which registers when they go under gantries over the major roads. (This is on top of some other general toll sections for everyone that work like the M6 toll in the UK). Heavy vehicles which do the most damage to the road surface, therefore contribute more based on the amount of driving they do. Equally as the gantrys are over the major roads, it tends to targets those doing the long distance transfer of goods where other transport methods are available.

It is not perfect by any-means but it is a significant improvement on the flat rate VEDs applied in the UK.

underbank said:

Not to mention the 13.8% employers NIC, especially unfair on personal service companies caught by IR35.

I agree, anything over 50% is unacceptable. It's why the marginal rate of 62% on those with incomes between £100k-£126k is doing so much damage (doctors etc). Taking home just 38% of the pay you get for the extra session/shift/day isn't worth it to lots of people.

We need a limit of 50%, and a linear/progressive line of tax/nic to get rid of these cliff edges, stupidly high marginal rates, etc. The marginal tax graph should be a sloping straight line, not a mountain range with peaks and troughs!

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I personally think 50% is far too low. The top rate should be up to something like 75%. In fact I would argue a 100% tax rate over a certain amount would be significantly better for society as a whole. Yes you work for nothing over a certain amount - so what? - Either: people are so passionate about their method of earning a living that once they get over the magic threshold they are willing to do it for free as a hobby; Or they are only in it for the money, in which case after they have earnt the magic number they can step aside and give someone else a chance. What is absolutly dispicable is those at the lower end of society who are struggling to get by being expected to treat their job like a hobby and hang around unpaid at the beck and call of a boss where they might be able to scrape minimum wage at the drop of a hat. I gross about 30K and would be happy to have a 60% - 70% tax rate on anything more I earnt, if it means the lady around the corner and all else like her could feed their children and buy them a new pair of shoes.

45107 said:

So this is not a EU problem. It is something completely within the complete control of the UK government ? We chose the VED ?

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That's one way of looking at it. Outside the EU the UK would be free to choose its own VED rate and any other road use charges it desired.

notlob.divad said:

I personally think 50% is far too low. The top rate should be up to something like 75%. In fact I would argue a 100% tax rate over a certain amount would be significantly better for society as a whole. Yes you work for nothing over a certain amount - so what? - Either: people are so passionate about their method of earning a living that once they get over the magic threshold they are willing to do it for free as a hobby; Or they are only in it for the money, in which case after they have earnt the magic number they can step aside and give someone else a chance. What is absolutly dispicable is those at the lower end of society who are struggling to get by being expected to treat their job like a hobby and hang around unpaid at the beck and call of a boss where they might be able to scrape minimum wage at the drop of a hat. I gross about 30K and would be happy to have a 60% - 70% tax rate on anything more I earnt, if it means the lady around the corner and all else like her could feed their children and buy them a new pair of shoes.

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I note that your altruism only starts at any pay ABOVE what you already earn so it is a meaningless gesture.

Feel free to make voluntary contributions to HMRC from your existing earnings though!

DynamicSpirit said:

I think each point you make is largely correct (including the need for this to go in a new thread), but you're conflating a few different things.

Yes, being a billionaire means having an absolutely huge amount of money - the the point where it's hard to imagine how you could reasonably even begin to spend it all. And - without knowing the individual details of Mr. Ratcliffe's situation, going into tax exile seems a bit unethical. I would hope that some means can be found to subject whatever he continues to earn to income tax. I would point out though that, to the extent that he employs people, his company will be paying national insurance contributions etc.

However, the point that brought up this discussion is that some politicians are claiming things along the lines that billionaires somehow should not exist and that being a billionaire must mean you are somehow exploiting people, etc. And that seems wrong to me. If people become billionaires through setting up very successful businesses (and therefore, presumably, making and selling things that make other people's lives better), then, good luck to them. What would you do? Would you declare that, once they've made more money than they need, they should not be allowed to make any more money? It ought to be obvious that that would just probably stop those people from doing any more work, and so cause more harm than good.

No, by all means make sure that everyone pays a fair amount of tax on what they earn. By all means increase the top rate of tax back to somewhere around the 50% mark, and start looking into ways to prevent people avoiding taxes. But you can do all that without attacking rich people just for being rich, or making the kind of rather daft remarks that some politicians on the left have started making.

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I don't believe I am conflating, there is a big difference to be drawn between someones personal wealth and the contributions that a they happen to own makes towards its employees well being. National insurance is supposed to be an investment in the state pension. It is a well recognised system in a developed society that if you require the time, labour and skills of an employee to enhance your business, you pay them not only their wages today, but also a contribution to provide them an income in old age, and the individual contributes too. In the state system the financial risks associated with the unknown life expectancy of an individual are pooled by everyone in the country, and today's contributions go towards paying for the income of today's elderly. Seeing national insurance contributions as a contribution towards the running of the state is therefore highly disingenious when it is a nationalised insurance policy to provide a sufficient income during the employees retirement. PAYE taxes are the contribution the employee makes towards the functioning of the state, the fact that a company may collect them pre paycheck on behalf of the inland revenue in order to reduce the administrative burdon on everyone, doesn't allow the company to claim they pay those taxes.

Yes, I would be very keen on a 100% tax rate above a certain earnings threshold. Once you as an individual are making so much money that you cannot possibly spend it within your lifetime, or even the lifetime of your children, then you really really don't need anymore. If you really don't want to earn more because you are fundamentally against funding the infrastructure and well being of the citizens of the country you live in (or even those of the wider world when we are refering to the billions), then absolutely that is your decision, don't work anymore, give someone else a chance to earn a half decent wage instead.

as for your line

presumably, making and selling things that make other people's lives better

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when it comes to the company belonging to the individual mentioned above, the industries that wealth has been accumulated in, the companies own ecological and environmental record, and the long term damage to the planet that has resulted, you would be hard pressed to say they are making the lives of the general population better. Particularly when you consider what could be achieved if a fraction of said individual's wealth was put into funding sustainable public transport.

LNW-GW Joint said:

I don't remember Harold Wilson and Barbara Castle being all that radical in the 1960s (and I voted for them then).
In fact Barbara Castle was a rather stern Minister and continued to cut the railway (though she did put rail on a better path forward by formalising subsidies).
For me it isn't the planned tax rates, it's the mega-borrowing which will come with every major Labour programme.

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You realise borrowing has been consistently higher under the Conservatives for decades?

LNW-GW Joint said:

It took Wilson little more than 2 years to reverse into austerity mode because of the extra borrowing (and poor performance of the economy in statist Britain, £ devaluation etc).

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Due to an ill-judged attempt to keep sterling at a fixed rate (all parties guilty of that at the time). He should have devalued as soon as he came into office.
Economic performance (in terms of GDP growth) from 1948 to the early 1970s was no worse than in the 1980s or 1990s, the latter being supported by oil revenues and one time only sales of public assets.

LNW-GW Joint said:

Denis Healey had to go begging to the IMF in the 1970s for the same reason when Labour returned to power (plus rampant inflation).

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He went to the IMF because the treasury overestimated predicted borrowing. As it turned out the loan wasn't needed. And Labour adopted a policy of cutting spending from 1976 onwards.

LNW-GW Joint said:

Labour has not thought through the consequences of massively higher borrowing.
If their proposals were staged over a decade, with progress (ie affordability) reviews every year, I would be more impressed.
That would mean setting priorities.
I think rail would not be top of a priority list, just as in 1997.

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I agree it looks like more than a one term programme.

furnessvale said:

That's one way of looking at it. Outside the EU the UK would be free to choose its own VED rate and any other road use charges it desired.

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Inside the EU, the UK is free to choose it's own VED rate and any other road use charges it desires.

If you want to apply road charging for HGVs for drivers from outside your country then you have to apply it to those in your own country as well. The UK chooses to extract a contribution to general taxation from road users through an annual taxation on vehicle emmissions applied at the point of registration. As a result it 'shoots itself in the foot' because it only applies to vehicles registered in the UK, not vehicles that use the roads of the UK. The UK government is well within its rights to change its method of collecting tax to extract and amount from the overseas drivers using UK roads, the only rule is that you cannot create a system that penalises EU competiton, for the benefit of your own haulage industy.

Skimpot flyer said:

Cue newspaper headline ‘New PM calls crunch meeting of first cabinet’...

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underbank said:

Not to mention the 13.8% employers NIC, especially unfair on personal service companies caught by IR35.

I agree, anything over 50% is unacceptable. It's why the marginal rate of 62% on those with incomes between £100k-£126k is doing so much damage (doctors etc). Taking home just 38% of the pay you get for the extra session/shift/day isn't worth it to lots of people.

We need a limit of 50%, and a linear/progressive line of tax/nic to get rid of these cliff edges, stupidly high marginal rates, etc. The marginal tax graph should be a sloping straight line, not a mountain range with peaks and troughs!

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I agree, the clawback of personal allowance above 100k is a nonsense bit of taxation policy, crazy to penalise earnings is a specific small band so much

Mikey C said:

Personally I don't think it's morally right to have a tax of more than 50% on earned income.

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I totally respect your view, but I don't feel as strongly as you do - but more of a problem I think is that I wouldn't like to suffer such a tax rate and will therefore go to great lengths to avoid it.
In other words, the existence of high rates of tax feeds through into actions people take to avoid paying it, and the higher the rate, the greater the effort in avoidance.
I spent my last ten working years avoiding paying 40% tax by putting more money into pensions, which I'm now living off, so in a sense that worked as "designed". The "Laffer" effect is overstated (reducing tax rates resulting in higher tax revenue) but it does happen.
I also once applied for a promotion, which I didn't get, but was pleased in the end because I had been seen to want to "get on" in the organisation, but didn't end up with a job with substantially more hard work (the sort I didn't like doing) but with very little more take-home pay because of the tax take.
So although I don't think it morally wrong to tax earned income at >50%, it's practically unlikely because it's unpopular, generally doesn't raise income from tax very much and incents people to do things to avoid paying it, both legal and illegal.

furnessvale said:

I note that your altruism only starts at any pay ABOVE what you already earn so it is a meaningless gesture.

Feel free to make voluntary contributions to HMRC from your existing earnings though!

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No, I would be perfectly happy to make higher tax contibutions on what I currently earn.

I have in the past contacted HMRC to find out how to pay some more tax on my earnings because I fundamentally disagreed with the way an accountancy company had dealt with earnings I recieved whilst overseas. HMRC were not interested. Only last year I trying to give HMRC some extra tax because I felt they had not correctly taken into account some of my income dervied from a rental property. (Instead they gave me a rebate back).

I would gladly pay more taxation for the upkeep of the country, and pay back tax on earnings I have made for the last 10 years, but only if that money was to be controlled and spent by a competent government, who didn't insist on lavishing it on tax cuts for the richest and lining the pockets of their wealthy backers.

jfollows said:

I totally respect your view, but I don't feel as strongly as you do - but more of a problem I think is that I wouldn't like to suffer such a tax rate and will therefore go to great lengths to avoid it.
In other words, the existence of high rates of tax feeds through into actions people take to avoid paying it, and the higher the rate, the greater the effort in avoidance.
I spent my last ten working years avoiding paying 40% tax by putting more money into pensions, which I'm now living off, so in a sense that worked as "designed". The "Laffer" effect is overstated (reducing tax rates resulting in higher tax revenue) but it does happen.
I also once applied for a promotion, which I didn't get, but was pleased in the end because I had been seen to want to "get on" in the organisation, but didn't end up with a job with substantially more hard work (the sort I didn't like doing) but with very little more take-home pay because of the tax take.
So although I don't think it morally wrong to tax earned income at >50%, it's practically unlikely because it's unpopular, generally doesn't raise income from tax very much and incents people to do things to avoid paying it, both legal and illegal.

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You make a very good point, but surely the solution to tax avoidence and evasion is not to give up and stop trying, but to close the loopholes that allow these things to take place. I don't mean pushing money into your pension, because by its very nature that is simply delayed taxation. You will pay tax on that once you draw it down in retirement.

Honestly, I really really don't understand the problem people have with being taxed, yes I understand the anger when that money gets given to shipping companies that have no ships and to settle legal bills because of the incompetence of ministers. But paying more taxes so that children can be educated and trained, so that disabled people can have a decent quality of life and those that have fallen on hard times are given a leg up to help them put their lives back together, or even just so that there is a bus for someone to get to work on. You should be proud to be asked to contribute more to these things, it shows that you live in a decent society where we help each other.

notlob.divad said:

Inside the EU, the UK is free to choose it's own VED rate and any other road use charges it desires.

If you want to apply road charging for HGVs for drivers from outside your country then you have to apply it to those in your own country as well. The UK chooses to extract a contribution to general taxation from road users through an annual taxation on vehicle emmissions applied at the point of registration. As a result it 'shoots itself in the foot' because it only applies to vehicles registered in the UK, not vehicles that use the roads of the UK. The UK government is well within its rights to change its method of collecting tax to extract and amount from the overseas drivers using UK roads, the only rule is that you cannot create a system that penalises EU competiton, for the benefit of your own haulage industy.

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Thank you for confirming that while a member of the EU the UK must conform with EU law and is unable to establish a bespoke system more suited to UK conditions.

Of course, we all know that and it applies to many areas of our lives.

notlob.divad said:

No, I would be perfectly happy to make higher tax contibutions on what I currently earn.

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Should your preferred colour of government be elected on the 12th I am sure your wishes will be fulfilled.

furnessvale said:

Thank you for confirming that while a member of the EU the UK must conform with EU law and is unable to establish a bespoke system more suited to UK conditions.

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So what you are basically saying is "a bespoke system for UK conditions" is one that screws over people who live everywhere else as opposed to applying a level playing field to all? Where does your hatred of our neighbours come from?

Wait until the Don has you subsidising US medicines then come crying about bespoke systems.

Won't Labour's train fare cuts reduce our fares to something like those in Italy? If Italy can do it, what is so different about the UK?

notlob.divad said:

Yes, I would be very keen on a 100% tax rate above a certain earnings threshold. Once you as an individual are making so much money that you cannot possibly spend it within your lifetime, or even the lifetime of your children, then you really really don't need anymore.

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Your logic appears to be that, because you feel that those people don't need any more money, they should be prevented (via a 100% tax rate) from earning any more money, even if they want to. In other words, getting into 'you can't have X if the Government decides you don't need X' territory. That seems like a pretty serious infringement of personal liberty to me. Would you apply the same logic to - say - people who have two tv sets, or two cars?

notlob.divad said:

If you really don't want to earn more because you are fundamentally against funding the infrastructure and well being of the citizens of the country you live in (or even those of the wider world when we are refering to the billions), then absolutely that is your decision, don't work anymore, give someone else a chance to earn a half decent wage instead.

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I think that displays a fundamental misunderstanding of the likely motives of most people who earn large sums of money. Using myself as an example, I'm self-employed, and currently working on a fairly big piece of work. Realistically, I don't need the money I'm going to earn from that work. My business does well enough that I can survive perfectly comfortably without it. But I'm choosing to do the work in large part because, even though I don't need to earn that money, I'd quite like to earn it. If you tax my earnings from this work at 50%, then, yes, it feels a bit bad when I pay the tax bill to HMRC, but realistically I'm happy to pay it because I want to live in a decent society and I know that requires everyone to contribute. If you tax me at 80%, I'll probably start to have serious doubts about whether it's worth my while doing the work. And if you tax those extra earnings at 100% on the basis that I don't need the money, then I can pretty much guarantee I would simply choose not to do that work at all - since I can have a much more enjoyable life if I just spend the time relaxing instead.

Apply that same reasoning to multi-millionaires and billionaires who have build up large companies, and who - when they work - tend to create large numbers of jobs for other people - and you can hopefully see where your logic is leading.

The two lessons from that are firstly: The fact that I'm not willing to work for no pay (after 100% tax is deducted) does NOT mean that I'm against funding infrastructure. It simply means that I'm not willing to work for no pay. And secondly - and perhaps more importantly: Tax me at 50%, and you get half of what I'll earn. Tax me at 100% and you get nothing because I no longer have enough incentive to give up my free time.

For that reason I would argue that your idea of taxing at 100% when you think people don't need any more money is both immoral (because it implies you expect people to work for nothing, and because it harms individual liberty) and impractical (because it would end up losing, not gaining, tax revenue and leave the UK poorer).

notlob.divad said:

as for your line when it comes to the company belonging to the individual mentioned above, the industries that wealth has been accumulated in, the companies own ecological and environmental record, and the long term damage to the planet that has resulted, you would be hard pressed to say they are making the lives of the general population better. Particularly when you consider what could be achieved if a fraction of said individual's wealth was put into funding sustainable public transport.

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Once again you are confusing two different things. Sure, *IF* a particular company has a bad ecological record, then I'd probably be very happy to criticise them for that. And I'd be very happy to do whatever is required to prevent that company from doing any further harm to the environment. But causing harm to environment is NOT the same thing as earning lots of money. You take action because of the environmental damage, not because the company happens to be making large profits. If a company is making large profits, but not causing environmental damage, then there's no problem (at least in that regard) and therefore no reason to penalise that company.

notlob.divad said:

I personally think 50% is far too low. The top rate should be up to something like 75%. In fact I would argue a 100% tax rate over a certain amount would be significantly better for society as a whole. Yes you work for nothing over a certain amount - so what?

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I understand (from a Michael Moore documentary so make of it what you will) that in the USA in the 1950's the top rate of tax was something like 90%. The reason that this is now judged outrageous (including by many in this forum who no doubt regard themselves as reasonably independently minded) is that since the 1950's the message has been repeated over and over ad nauseum that society runs best on the principle of trickle down economics. And if you demolish that argument you will then be told that a high rate of tax will send everyone abroad. And just like an onion, when you peel back that argument there will be another one waiting underneath.

Remember that the economic theories used to justify billionaires as a positive development to society are just that: theories. They might always be because economics is just a social science at best and always hostage to human whims. Not a hard and objective science like, for instance, the climate emergency used to justify rail use over alternatives such as car and plane (dragging the thread back to railways!).

squizzler said:

I understand (from a Michael Moore documentary so make of it what you will) that in the USA in the 1950's the top rate of tax was something like 90%. The reason that this is now judged outrageous (including by many in this forum who no doubt regard themselves as reasonably independently minded) is that since the 1950's the message has been repeated over and over ad nauseum that society runs best on the principle of trickle down economics. And if you demolish that argument you will then be told that a high rate of tax will send everyone abroad. And just like an onion, when you peel back that argument there will be another one waiting underneath.

Remember that the economic theories used to justify billionaires as a positive development to society are just that: theories. They might always be because economics is just a social science at best and always hostage to human whims. Not a hard and objective science like, for instance, the climate emergency used to justify rail use over alternatives such as car and plane (dragging the thread back to railways!).

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The super rich never paid these sums though. There were always loopholes which they used, or they domiciled themselves elsewhere like all the British rock stars did in the 1970s. Or directed their income into a lower tax location like U2 did or indeed the likes of Richard Branson do.

As it is the "rich" pay a massive share of the UK's taxation already, putting their rates up significantly wouldn't increase the actual amount raised for the reasons given above.

squizzler said:

I understand (from a Michael Moore documentary so make of it what you will) that in the USA in the 1950's the top rate of tax was something like 90%. The reason that this is now judged outrageous (including by many in this forum who no doubt regard themselves as reasonably independently minded) is that since the 1950's the message has been repeated over and over ad nauseum that society runs best on the principle of trickle down economics. And if you demolish that argument you will then be told that a high rate of tax will send everyone abroad. And just like an onion, when you peel back that argument there will be another one waiting underneath.

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Oh what rubbish! There are going to be lots of people (including me) who regard trickle-down economics as a discredited political theory, but who nevertheless would regard a 90% tax rate as being counter-productive and morally wrong. So could I perhaps suggest that you try to make your point without making out that people on the opposing side of the debate believe things that they don't actually necessarily believe.

There are many differences between the 1950s and today: A greater sense by many people of the importance of personal and economic freedom, a much greater economic understanding of how market economies work are two that come to mind. But also, very importantly, the World today is much more globalised, and moving both money and people around is much, much easier - which means that if you tried to tax the wealthy at 90%, they would be far more likely these days to simply move either themselves or their business activities abroad, making a 90% tax rate self-defeating even if it was morally justified.

squizzler said:

Remember that the economic theories used to justify billionaires as a positive development to society are just that: theories. They might always be because economics is just a social science at best and always hostage to human whims. Not a hard and objective science like, for instance, the climate emergency used to justify rail use over alternatives such as car and plane (dragging the thread back to railways!).

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That reads to me very much like an attempt to just ignore economics when it says something that you don't like. Cue 'had enough of experts'. Sure, economics is often not on as firm a ground as something like physics - that's both because the systems economics studies are much more complex and because it's much harder to conduct experiments in economics. That doesn't make economics worthless, or mean that there isn't now a huge amount known about how modern economies work.

squizzler said:

I understand (from a Michael Moore documentary so make of it what you will) that in the USA in the 1950's the top rate of tax was something like 90%.

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Obviously the Yanks were only playing at it. In the UK in 1975 under a Labour government, the top rate of income tax was 98%.

I would love to know the actual tax take achieved at that rate because anybody liable to pay that rate certainly wouldn't have left his money in the UK to pay it.

urbophile said:

Won't Labour's train fare cuts reduce our fares to something like those in Italy? If Italy can do it, what is so different about the UK?

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Italy has a high subsidy for local/regional fares, not so much for long-distance or any "express" services.
They have also spent huge sums on high speed rail in the last couple of decades, so FS has a similarly huge debt.
Generally central government is weak and hasn't managed to reform the railway structure.
At one point 45% of FS was going to be sold to help with the debt, but the present government cancelled the sale (as with Alitalia, also under a mountain of debt).
There is competition from Italo on high speed lines (2 operators on many routes), with regional lines facing competition in the near future.
Italy's economy is in trouble, and they break EU fiscal rules with impunity.

Here the UK government, of all shades and going right back to BR days, had/has a policy of passengers paying a greater share of rail fares, rather than the taxpayer.
It used to be 50/50 but is now something like 75/25 skewed to the passenger.
RPI+1% (sometimes RPI+3%) clocks up over the years - the formula was invented by Labour.
Meanwhile Network Rail has a £40-50 billion debt.

notlob.divad said:

In fact I would argue a 100% tax rate over a certain amount would be significantly better for society as a whole. Yes you work for nothing over a certain amount - so what?

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Do you really think someone is going to work an extra shift or longer hours if they're not going to end up being paid for it??

Look at the current fiasco with doctors and dentists who are actively cutting down their hours to get their income under £100k to avoid the 62% marginal tax rate, going down from 5 to 4 working days and refusing to work additional shifts.

How do you propose forcing people to work more but not get paid for it? I thought slavery was abolished?

furnessvale said:

Obviously the Yanks were only playing at it. In the UK in 1975 under a Labour government, the top rate of income tax was 98%.

I would love to know the actual tax take achieved at that rate because anybody liable to pay that rate certainly wouldn't have left his money in the UK to pay it.

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It was well publicised at the time that "rich" people who could, just upped and left the UK, in particular the likes of the creative industries such as book authors who didn't actually need to be in the country to earn their income. Huge numbers of authors moved abroad to avoid penal UK tax on their book sale royalties. Same with actors, musicians, etc - it's how they started moving to Switzerland "for creative reasons" and planning their world tours to avoid being resident in the country. More recently, David Frost famously flew into London on a Sunday morning, did his TV programme and flew out again the same day to avoid becoming UK tax resident. Likewise large numbers of people "living" in the Isle of Man but commuting by air to London (or living in France and commuting by Eurostar) for the maximum number of days they can to avoid UK tax residency.

I thought this thread, as it's on the UK Railway Discussion forum, was supposed to be about how the election would involve the railway, surely if you all want to start yet another political bunfight then the General Discussion forum would be the appropriate place, 6 year old links to Mo Farah and his tax arrangements are well past the final straw

notlob.divad said:

Correct. To see how an alternative focused on HGVs, can work within the EU see the viatoll system being rolled out in Poland. There is now a legal requirement for all vehicles over 3.5 tonnes to carry an RFID box which registers when they go under gantries over the major roads. (This is on top of some other general toll sections for everyone that work like the M6 toll in the UK). Heavy vehicles which do the most damage to the road surface, therefore contribute more based on the amount of driving they do. Equally as the gantrys are over the major roads, it tends to targets those doing the long distance transfer of goods where other transport methods are available.

It is not perfect by any-means but it is a significant improvement on the flat rate VEDs applied in the UK.

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The problem with HGV's isn't the damage that they do to the road surface (which can be replaced overnight), but rather the damage they do to the sub structure (whilst cars do none, or as close to none as makes no odds when it comes to designing the thickness of the road) as you have to dig the whole road construction out to replace it.

LNW-GW Joint said:

Italy has a high subsidy for local/regional fares, not so much for long-distance or any "express" services.
They have also spent huge sums on high speed rail in the last couple of decades, so FS has a similarly huge debt.
Generally central government is weak and hasn't managed to reform the railway structure.
At one point 45% of FS was going to be sold to help with the debt, but the present government cancelled the sale (as with Alitalia, also under a mountain of debt).
There is competition from Italo on high speed lines (2 operators on many routes), with regional lines facing competition in the near future.
Italy's economy is in trouble, and they break EU fiscal rules with impunity.

Here the UK government, of all shades and going right back to BR days, had/has a policy of passengers paying a greater share of rail fares, rather than the taxpayer.
It used to be 50/50 but is now something like 75/25 skewed to the passenger.
RPI+1% (sometimes RPI+3%) clocks up over the years - the formula was invented by Labour.
Meanwhile Network Rail has a £40-50 billion debt.

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Given that there's a net spend on rail of £6bn and there's a gross spend of £18bn then it's 33% of government support.

However about £2bn of that is spending on HS2 it could be argued that it's 25%. However I'd you're saying that major improves like HS2 shouldn't be included then there's an augment that some/all of the £4bn spent on rail enhancements should be excluded too.

If you exclude all of those enhancement costs then the passengers are covering >98% of the costs of the day to day running of the network.

The reason for highlighting this is because how many of you would consider making an improvement to your house and expect to recoup ask the costs in the same year as you pay for it? Chances are you'd be happy for the new boiler to have a 10 year payback period, or the solar panels to recover their costs after 12 years.

If so why should the railways be any different? As if they were able to recoup the costs of all the improvements being made in just twelve months then it's likely that those improvements should have been made a long time ago.

Mikey C said:

Worth remembering the 2% NI which is also charged, so 50% is really 52% and 45% really 47%

Personally I don't think it's morally right to have a tax of more than 50% on earned income. And it's academic with the super rich, as they have a network of companies and off shore bank accounts to shuttle their money around, or would relocate to tax havens anyway, so it wouldn't affect them

I also don't think the vast salaries and bonuses some people at the top are being paid are morally right either, but that's a separate issue.

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It should also be noted that with a 12% NI rate (paid on anything earned on between £166 and £962 per month, or £8,632 and £50,024) then there's a lot of people paying 32%, as such the gap between that and 52% isn't as big as the 20% to 50% income tax rates imply.

In fact for £23 of their income higher rate tax payers are already paying 52% before it then drops to 42% (as the 40% rate kicks in at £50,001 and the drop to 2% isn't until £50,024).