A 45p tax rate is not what's best for this country

Sally Williams

To the best of my knowledge the most vicious form of income taxation currently in place is that imposed on pensioners. Over a certain limit they suffer the clawback of £1 in every £2. That has got to be wrong, especially when savings are attracting almost no interest.

Tony S

Absolutely spot on Fraser. This country deserves politicians making a principled stand based on what is best for the country.

It is time the Conservatives cast off their fear of being radical and emerged from the shadow of lazy non-solutions to the problems Labour has piled onto this country.

Let us oppose any tax increases because it is right to do so, and treat Labour's response with the contempt it will deserve. Labour has no credibility and nothing to say worth hearing.

David

"There is a reason why the top rate of tax has been falling around the globe: governments get more revenues that way."

Only, of course, up to a certain point. Otherwise you seem to be arguing for a 1% tax rate. If even that high.

Screwtape

You sound angry and pissed off with the Pusillanimous Pair, Fraser, and not before time. You're joining a club with an already large and growing membership.

When is the penny really going to drop with Cameron cheerleaders like Tiberius and yourself and you finally accept that Cameron is not a supply side conservative in SocDem sheeps clothing but nowt more or less than a fully paid up old fashioned, One Nation Tory, tax and spend SocDem sheep.

CS

You may or may not agree with what he's done but I don't see that Osborne has fallen into Brown's "trap". If Brown has a tax line to push against the Tories, it's surely the age-old Labour one of the Tories slashing public services for the sake of tax cuts for the privileged few.

If there was a trap, therefore, surely it was to tempt Osborne to reject the 45p tax rate idea so that he could then be painted as the friend of the rich.

Otherwise, if the trap was to get Osborne to back the 45p rate, what benefit has that brought to Brown?

"Tories tax the rich to fund spending and reduce debt."

Not very palatable for the rich and for believers in the profit motive maybe but not a tabloid headline to stick the Tories with.

Indeed, one could well argue that the outrage coming from the apologists works well for Cameron and Osborbe in the country.

What the residents at No 1 Ivory Towers (i.e. Coffee House) never seem to grasp is that while lower taxes for the wealthy (though I'd be fascinated to learn what job is genuinely worth over £150K a year) may or may not be economically sound, no-one is going to vote for it other than the wealthy.

Unprincipled as it may sound, whatever tax policies the Tories announce today are going to have to be torn up the minute they win an election and get to see the full extent of public debt. So, if today's tax policy announcements are always going to be meaningless, why announce unpopular ones?

chris

This is all part of the election game. Who will existing Tories vote for if they don't like this? If I were the Chancellor after the election I would call a 'review' and then, about 18 months later, announce that the tax would not bring in any extra revenue, and kick it into the long grass.
Sorry this is negative, etc, but the other day I heard Yvette Cooper saying that removing income tax from savings would mean 1000s less apprenctices! Then went on to say that Tories were therefore against job training.
Why give them any ammunition at all? They are going to get chucked out anyway. If they don't then the country deserves what it will then get from these maniacs.

Donna

Do we like this 45p tax rate idea or not? It'll be talks of 'Tory Party split' if this goes on much longer.

Colin

Oh well, four more years...

Is that young Dave I see hopping about, having just blown part of his foot off?

AndyLeeds

Lord Lawson is quite right: the Tories shouldn't engage Brown in his silly games. This man has destroyed the States finances and much else asides. He is an idiot.

The Tories should stay stum, but behind the scenes they should be thinking radical on both taxation and spending policy. A Flat tax for one and radical cuts and privatisation's are a good start.

Tiberius

Look, there is no red or green button on this issue. Brown is good at this kind trickery - goodness knows he shafted Blair often enough.

Fraser - I know your thread is timed earlier than my post on Pete's, but I didn't see your reference to chess before I posted. The trouble with walking away from the chess game while your opponent still wants to play is that you forfeit. And as long as Brown is PM, with his media sycophants, he is the one who names the game.

David

Hang on, so, Osborne has prevented Brown from being able to portray the party as a "friend to the rich and service slashers" through accepting a tax rise that won't have any effect at all, and so therefore is, for all intents and purposes, not a tax rise.

Where's the loss?

Fraser Nelson

Tiberius, the nation isn't playing chess - just Westminster. You can' get too engrossed in the game.

Screwtape, I have leaned more towards your way of thinking and away from my better angel (that's you, Tiberius) but im not seller of Osborne stock. He's done great things, Cameron has done amazing things. It's just that their strategy can be exasperating at times.
Today is such a time.

David, do you think for a second that Brown now won't portray the party as a "friend to the rich and service slashers"? And when the UK is on the list of the highest marginal taxers in Europe and for now gain - well, that's the loss.

Alf Tupper

I'm trying to imagine what it must be like to earn £180,000, then to have the taxman take 45%.

Left with a paltry £99,000. I ask you, how do they expect us to manage on this money.

I just don't know where the next Range Rover is going to come from.

Peter Buss

Well, if anybody really thinks that having as a priority the reduction of the new tax rate on high earners, when we propose to slash public spending - including tax credits for some - will play well morally, let alone politically, with the electorate, then they truly are in cloud cuckoo land. But then again its very clear that some on this Site seem to think that there was nothing wrong with the old Tories anyway - it was just those "stupid electors".

I am only just one voice, but there are many people like me who used to vote Tory until 1997 and have returned because of the centre ground direction Cameron has taken the Party in.This Osbourne take on the tax bears all the marks of a man with some political sanity which so sadly deserted the Tories for so long.All the guy is saying is that it will be very difficult to lower this rate - and so it will be.

Denis Cooper

As of now:

"Disappearing Companies" - 1 comment.

"A 45p tax rate is not what's best for this country" - 11 comments.

Something not quite right there ...

Laura

So Fraser you accept that taxes need to rise but you want said rises to fall on low and middle earners. If the Tories go into the next election with that stance they will LOSE not to mention the fact that it is UNFAIR. I'm with Osborne on this and I am by no means his biggest fan. Have you also forgotten that top rate tax was 60% under Thatcher.

Stanley, UK

Ahh this is an example of the gulf between the commentariat (yourself) and the average person. You lot who earn over £150,00 are up in arms whereas everyone supports GO. Afraid to say it Fraser but the boy Ozzy has got it right this time.

David

"do you think for a second that Brown now won't portray the party as a "friend to the rich and service slashers"?"

And how will it stick, when the public know that the Tories are going to be retaining a 45% rate for the rich?

"And when the UK is on the list of the highest marginal taxers in Europe and for now gain - well, that's the loss."

Why? Because revenue will fall as they attempt to evade the new rate (will they? Don't rich people have an feeling of civic responsibility)? But you argue for tax cuts anyway, which would also result in less revenue.

I'm still slightly worried what you are arguing for is for the rich to pay as little as possible, leaving the burden of taxation on the middle classes. Who struggle enough as it is.

Bluebottle

At the rate this country is going down the toilet under Brown, the only ones left on salaries of over £150,000 and paying the 45% tax rate will be public sector fat cats.

And f*** them!

Fergus Pickering

But Alf, under George Osborne's new proposal the taxman doesn't take £81,000. He takes about £64,000, which is about £1,500 more than he takes now. So the fellow has £116,000 after tax, though probably a ot more than that ifhe has a good accountnt. Plenty of money for Range Toversand school gfees and holidays in Ibiza or wherever. I think Fraser needs to lie down for a bit. Oh, and Fraser, how much did you earn (before tax) in the last tax year?

Nick Kaplan

"accepting a tax rise that won't have any effect at all, and so therefore is, for all intents and purposes, not a tax rise."

It is true to say that the increase in the top rate of tax will have barely any effect on the public finances raising only £2billion at most. However when people read this they fail to understand that this does NOT mean that such a tax hike will not have a negative impact on those on whom it is imposed.

The maths is very simple. £2billion divided by 60million people is very very little, barely worth the effort. £2 billion divided by the few thousand people who earn over £150000 is a big loss to those people. Appropriating such a percentage of someone's income when the gains to the treasury will be minimal is called punitive taxation.... it is deeply immoral and based only on gratifying envy (i.e. the preeminent leftist motive).

Anyone who believes in the value of ambition, of hard work, of rewarding (not punishing) success, of incentives, of entrepreneurialism, of job creation and of wealth creation (i.e. any conservative) should be opposed to such punitive taxation. Anyone who genuinely believes in the morality and necessity of a smaller state and less coercion should favour tax cuts not tax hikes; for the many and the few, not one or the other. Gordon Brown’s false dichotomy (‘helping the many rather than the few’) is typical socialist class-war mentality and should be rejected for the out-dated, divisive nonsense that it is!

TrevorsDen

One again you talk pompous bollocks Mr Nelson.

The tax rise is in the pipeline - and your policy is to put the Conservatives into the election with the slogan 'less tax for the rich more tax for the poor'. And this at a time in our history when it is ESSENSIAL that we raise taxes.

You great steaming twassock. My advice is to take up writing fairytales - give up on politics.

As a steaming raving loony right wing conservative - let me tell you something. As the Nation faces the greatest debt burden in history - I do not give a shit about people earning £150 grand a year.

Tax threshold for basic rate and 40p rate payers is much more important.

This post of yours brings into doubt your sanity Mr Nelson, having said that you are in good company.

Thank Christ for George Osborne I say.

Screwtape

Fraser, I sincerely hope you are insisting on coin of the realm and not allowing yourself to be fobbed off with rolls of wallpaper for all your Cliffordian efforts for Boy George.

If he has indeed "done great things" how come: a) the Pusillanimous Pair are never any more than neck and neck with Brown and Darling in the economic competence stakes and b) In the Jan/Feb YouGov poll of the marginals to the question "If the Conservatives won the next general election who would make the better Chancellor?" the answer came back, Osborne 15%, Clarke 39% and it don't come much more humiliating than that.

Face up to it Fraser, the voting public tuned Osborne out a couple of years back and his resuscitation would take more than the efforts of Max Clifford and yourself combined.

Moreover, by keeping him there Cameron demonstrates what a very poor leader he is by putting friendship and the Bullingdon before party and country.

As for what game Brown is playing, it's simple - he's playing puppet master to the Dave and Boy George marionettes.

Rick

Alf Tupper - anyone on a remuneration of £180K per year would not be paying the 45% tax. If they received £190K they would be paying 45% on the last £10K. Get your facts right.

Fraser - fresh thinking is required but unfortunately you've merely repeated this as a mantra without providing any yourself. If those taxed at 45% decide to avoid tax by paying a greater proportion of their "earnings" into a pension the "new thinking" is simple, remove the pension tax break for those who fall into this tax bracket.

Anyone "earning" £180K does not get paid hourly. They will work more or less regardless of the tax. If they decide to emigrate that is most certainly not a loss. If more of our £180K plus bankers had emigrated we would be much better off.

JohnAnt

Alf Tupper - according to my calcs, someone earning £180K, would pay, after the usual tax-free allowance, about £64,500 in tax, so would see £115,500 net of tax. The top 5% above 150K would bring in only an extra £1,500 in tax - 1% of his/her take-home pay. Not much of a difference for anyone with a salary at that high level.
Which makes me ask again: why are both Labour and the Tories engaging in this smokescreen argument, when the real problems will be faced by those fiscally dragged into paying 40% on the 40K or so that will - after inflation - be a challenge for a family to live on.

Verity

Peter Buss - We believe you. Millions wouldn't.

You're new in these parts, aren't you? None of us have seen this particular nomme de guerre before. Funny how all these previously unknown nommes des guerres skitter out of the woodwork on command.

Colin

I'd prefer to see every single pip of public sector fraud, waste and abuse, squeaking loudly, before there's any talk of tax rises - for anyone.

How about a full frontal assault on the public sector pension gold mine, for starters?

Susan Hill

It`s not how much they take from me it`s what they do with it....

Tiberius

Fraser - ok forget the chess. I do of course agree with your headline here, but we're fighting a dirty opponent.

There is clearly divided but honest opinion on this, which is exactly what Brown anticipated. You may disgree with the route that Cameron and Osborne have chosen, but surely you have to acknowledge they could turn out to be right. So it's hardly a reason, after all that has gone before, to cede ground to Screwtape.

I will say that my judgement on this could be wrong. But with the tax avoidance industry and all else that the country is enduring, I just don't see this as damaging the Tories politically, or the country economically.

A decided Tory position on this, however, could be politically damaging for them. I'm sure the BBC and Brown have outriders at the ready to plant specious lines of argument in such an instance.

Fergus Pickering

But JohnAnt, they won't pay 40% on the 40K. They'll pay 20% on most (all?)of it and nothing at all on some of it. I think they will manage to raise a family on that. No school fees, mind. And no Range Rovers. Second-hand Volvos perhaps. Good for the soul, are second-hand Volvos.

David

"Anyone who believes in the value of ambition, of hard work, of rewarding (not punishing) success, of incentives, of entrepreneurialism, of job creation and of wealth creation (i.e. any conservative) should be opposed to such punitive taxation."

Given the person concerned will still have a six figure income, it's hard to see how this is punitive.

And are you seriously arguing that we should tax people less the more they earn as an incentive?

oldtimer

I think the chess analogy is correct. Brown sees his move as a fork. If GO rejects the 45p he is criticised for protecting the rich. If GO accepts 45p he is criticised by the Tory party for putting taxes up. Either way, Brown captures an argument.

On an earlier thread on this topic I posted about 45p as follows:
It is is, on its own, an irrelevance if you believe, as I do, that taxation needs root and branch reform. Tinkering around the edges will not do. Reform is needed to simplify the impossibly complex and expensive system we now have, and to re-instate the incentives needed to motivate the nations`s wealth creators.

I`ve no doubt that, initially, the tax burden will rise. The key question will be where will it fall hardest - on wealth consumption or on wealth creation?

That is still my view. 45p belongs in the same category as the 10p fiasco - a Brown manoeuvre. Or if you prefer, more Brown stuff that is best avoided. Some people seem determined to step right in it.

JONNY

'This country deserves politicians making a principled stand'

If there are any Tony S, I haven't seen many of them around recently.
I think the introduction of focus groups in the 80's must have rendered the genre obsolete.
Which I agree is very sad.
Maybe it's a bit like poison gas in WW1 - if the enemy uses it you soon start squirting it yourself.

frank goddard

To all of you on this forum,try managing on £189-35 per week for twelve months as a pensioner!!GO is right on the 45p.To Fraser,stop worrying about DC,s thinking,he knows and so does everyone else,they cannot do anything until they see the books.They should concentrate more on ridiculing Brown on everything he says about the economy.
Frank G..English pensioner.

Susan Hill

@Fergus Pickering. 4th hand VWs are even better. Mine has been doing my soul good for the last 7 years.

Alf Tupper

Rick & JohnAnt.

If I understand you correctly, your view is that my (sarcastic BTW?) and admittedly wavering maffs, is in fact being too light on the highly paid?

Either way, my concern is that this topic, here as usual when it's raised in the media, always seems to make it sound as if it's essential for our success, that people who are very rich, get to pay tax at similar levels to those whose salaries just manage to pay the bills and not much more.

The highly paid are assigned the label of 'wealth creators', which implies that the rest of us out there working, are somehow dead weights. In reality it's the millions of people working at not much more than subsistence level, and those one rung above who manage them, who create the wealth of this country.

Their willingness to pay such a high proportion of their wages in tax and their contribution to the success of their companies constitute the real wealth creating engine.

Ian C

Dave & George should follow Lawson's advice to the letter and say as little as possible. Boris and Sir Norman should shut the f***k up and let the battle be fought as the leadership sees fit. To intervene now with such unhelpful comments can only weaken our best shot at getting a new government.

It might not be exactly the government we all want but it will be much better than the one we have.

The 45p is just a distraction for the 'village' to get excited about. Debt is the real issue.

Nick Kaplan

David, you clearly do not understand the word punitive, let me define it for you. A punitive tax is one whose main purpose is to punish. Whether a particular tax is punitive or not has nothing to do with how much money the person is left with after they are robbed, it is about the reason for the tax being taken. Thus one cannot asses whether or not something was punitive by measuring the ratio of what is taken to what is left. For example you would not argue that sending someone to prison for a year was not punitive on the grounds that that person would still have the vast majority of their life left to live freely. Thus your comment “given the person concerned will still have a six figure income, it's hard to see how this is punitive” is utterly ridiculous.

Since the new 45% rate will raise such a pitiful amount of revenue one cannot help but conclude that it is not really a revenue raising measure. Moreover since the top 1% of tax payers pay 25% of tax it cannot be motivated by getting the wealthy to pay ‘their fair share,’ as is so often claimed as the motive by the politicians involved. Such people already pay their fair share plus the fair share of 24 other people (if my maths is right).

Instead it is a vote gathering and hard left appeasing measure. The vote gathering element is about gratifying envy, the ‘left-wing appeasing’ element is about punishing those nasty rich people for no other reason than leftist hatred of success, ambition and self-reliance, i.e. spite. Tax policies motivated by envy and spite are punitive; ergo this is a punitive tax (and if not they are worse than punitive, for I am not sure whether spite is about punishment or simply about pure malevolent nastiness and hatred which is even worse).

Nick Kaplan

Alf Tupper;

How exactly are you measuring how much wealth "the millions of people working at not much more than subsistence level" are creating?

The only real measure is to look at the marginal value of labour (which in a competitive economy is roughly equivalent to wage rates).

The amount of wealth created need not correspond to the input of effort; it instead depends on the output i.e. what is produced. e.g. Two machines might use the exact same inputs but 1 could produce something that will sell for £5 while another produces something that sells for £50, the latter produces more wealth.

The marginal product of labour for high-rate tax payers is far higher than that of individuals 'working at not much more than subsistence level' thus they produce more wealth (regardless of the effort they put in). Moreover, such people are often entrepreneurial types who create jobs as well as wealth. They also pay far more tax.

Those 'working at not much more than subsistence level' not only produce less wealth, but when you factor in the cost of benefits such as health care, education etc are actually a drain on the economy; contributing less in tax than it costs to sustain those benefits. (NB. I still think we should provide these benefits to those who work hard, regardless of what they produce).

My point is merely that one should not cut off the hand that feeds you; I don’t want my future employer to not bother creating my future job because the government is too busy playing politics with the tax rates, I would imagine that deep down you feel the same way. If debt needs to be reduced then it is not just the rich who ought to pay for it, we all need to do so (there are not enough rich people to pay off the debt anyway). Thus we all face a choice of higher taxes or lower public spending, shifting the burden entirely on to others is selfish and immoral.

David

"Such people already pay their fair share plus the fair share of 24 other people (if my maths is right)."

Aww, bless, you can quote the West Wing.

Your definition of envy and spite appears to be anything which requires the best off to pay more so the less well off are relieved of a burden which for them is vastly more difficult to bear. A call a failure to do that punitive taxation.

Screwtape

This really all is very disturbing and disheartening underlining as it does just how the Left have been left to make and win the arguments over the last few years to the extent it seems that so many Coffee Housers now seem to be unable to get beyond social justice taxation arguments. The amount of envy and abuse generated in so many of the posts above is also very depressing.

Taxation should not be all about social justice, it should also be about promoting economic efficiency ie not providing disincentives to the real wealth creators.

The argument is all about the marginal so consider - even at 40% tax, a man has to pay himself £16,667 to get £10k in his hand, confiscatory enough, but to get hold of £10k at 45% he will have to hand over £8,183 to Brown/Cameron - why bother to work harder or take additional risk!

To make inroads into our vast national indebtedness, this country, just like the US, is going to need vigorous tax generating economic growth and the last thing that is going to generate such growth is disincentive taxation on its most dynamic business people. What would be far more economically efficient would be a cut from 40% and a cut in capital gains tax.

Cameron/Brown are dead wrong over here and Obama is even more misguided over there.

hadrian

Taxing anyone- however rich or poor- at over 10% is simply state theft, pure ans simple. Until this is recognised we'll keep sinking.

Nick Kaplan

David; I have never seen the West-Wing and have no idea what you are referring to. More importantly either your ability to read, or your mastery of the English language is somewhat lacking. Let me explain what I mean by envy and spite:

Someone is envious with regard to something (in the case we are considering; wealth) if the envious person would prefer the situation in which neither person had that wealth to the situation in which the other person has it and the envious person does not. At the same time the envious person would rather they alone had that wealth than that neither person had it. Since you have already conceded that this tax rise will not raise any significant revenue (re your comment about it not being a tax rise) and hence can be of no use to the less well-off, it must be the case that those that would vote for this policy would only do so out of envy (i.e a desire that neither person enjoy any benefit they themselves cannot enjoy) or ignorance. Which one best fits your position?

As for spite, the spiteful person would prefer that neither person had the wealth than that both persons had it in addition to preferring that the other person not have the wealth that the spiteful person does not have. The leftist desire to tax the wealthy regardless of whether or not it will help anyone else (including themselves) must be motivated out of this desire to prevent people enjoying benefits they arbitrarily define as ‘too large.’ Advocacy of such policies is a most ungracious quality.

It is obviously the case that a small number of less-well off people will struggle to raise as much revenue as the same number of well-off persons. However a very small tax on a large number of less-well off and well-off people will raise a large amount of revenue. If the government were serious about raising revenue they would do this, or they would cut public spending. As it is the 45% rate will not make any difference to the majority and consequently can only be motivated by a mixture of envy and spite against a wealthy minority.

If the policy were going to help the poor we would be in very different moral territory (although I still believe you would have a long way to go to justify such a tax increase on those already paying 25 times their share). As it is we are discussing a tax that is retributive and hence no better than theft and therefore clearly immoral.

Nick Kaplan

Screwtape; On the whole I agree with you, especially about how sad it is that even Coffee Housers have slipped into leftist envy politics.

However, just 1 important point. I would not concede to the left that punitive taxation or the desire to equalise has anything to do with Justice. Justice as originally defined by ancient philosophers meant the very opposite of equality, it meant ensuring people received their differing deserts and entitlements. The concept of ‘social justice,’ built as it is on the belief that nobody can ever deserve anything, far from being a type/ conception of Justice (here I mean original, without prefix of suffix, justice) is nothing of the sort, it is instead a rejection of the very concept.

Accepting leftist terms such as ‘social justice’ hands them, on a plate, a victory they do not deserve. When one asks ‘why tax people at 45%’ what better answer could one give than ‘justice demands that we do so?’ Of course neither justice nor efficiency demand this (quite the reverse!) and we on the right should say so, loudly and proudly.

Alf Tupper

Nick Kaplan.

Your future employer will set you on and pay you only if he can make more money from what you do, than he has to pay you. If that basic is not in place, then the job's knackered before it starts.

He's not an idiot, so he will buy the machine which produces the larger profit, and he will pay someone to operate it. If he pays too much then someone else will undercut him. Therefore we have to have people who will turn up every morning to operate - in my phrase - 'at not much more than subsistence level'. That's just the way it is.

You state that: "The marginal product of labour for high-rate tax payers is far higher than that of individuals 'working at not much more than subsistence level'" Surely this is wholly dependent on where that high-rate is arbitrarily set?

In my view it has for some time, been set to the advantage of those people who are rich. By rich, I mean those with enough money put by so as to be in no danger of losing their house should they lose their means of employment. To the vast majority of us, that definition, simplistic and perhaps humble as it is, about covers richness.

I would re-iterate that if we stay in your mindset which sees a situation wherein the 'wealth creators' are few and highly paid, and they are beset by muppets who don't pay their way, then we are doomed.

We need each other and for things to work, we need to be fair to each other.

Screwtape aka TGF UKIP

Yes, you're right of course, Nick Kaplan, and in the continuing absence of Nicholas who is so badly missed, your posts invariably bring some conservative intellectual heft to this site. Welcome back again.

David

"Which one best fits your position? "

Neither. You may wish to define the debate in closed terms, but I'm not going to play the game. I simply subscribe to the fact that the better off should shoulder the burden of tax, as they are better able to afford it. In this case, we are entering a period of increased debt which needs to be paid of. This will be done by cutting spending but to be fair, as of course the worst off very often depend more on public funded services' it must also be done by asking more of those who can afford it. It has nothing to do with envy, but everything to do with civility and responsibility. This may be a dirty word for the likes of you, of course.

Tim Carpenter LPUK

David: "And are you seriously arguing that we should tax people less the more they earn as an incentive?"

This "less" term is typical disingenuous Socialist clap trap. Even if the RATE is lower, the wealthier person would - tax loopholes aside - be paying more than the poor.

Not only do you want the rich to pay more, you want them to pay proportionately more.

Envy politics. Damnable stuff.

Osborne is a fool for going down the 45p route.

CS

***On the whole I agree with you, especially about how sad it is that even Coffee Housers have slipped into leftist envy politics.***

That contributes about as much to a sensible argument as someone saying that anyone taking the oppositu view has slipped into rightist slefish politics.

Perhaps we could refine the tax system to distinguish wealth creators from those on high income. Because they're nothing like the same thing. An actor or journalist or acocuntant or solicitor or political pundit who earns over £150K - exactly how are they wealth creators? Other than in the sense that they create wealth for their own pockets.

ChrisD

Osborne has not fallen into Brown's trap, he has simple refused to positioned on Brown's election strategy chess board.

And again, I think that unlike some here and on Conhom, Osborne is 2/3 steps ahead with his agenda for the GE campaign and the difficult decision he will face if the Conservatives win the next GE and he becomes Chancellor.

I could cheekily add, that despite being of a similar age to both Mr Nelson and Mr Montgomery...Osborne has managed to be elected to Parliament, rise to the position of Shadow Chancellor under two Conservative Leaders, he also managed a successful Conservative leadership campaign, was involved in helping Boris get elected to Mayor of London behind the scenes. He has been pivotal in strategy which has put the Conservatives at a consistent 40%+ in the polls after more than 12 years of flat lining at a heady 30/33% core box.
He could be the first Conservative Chancellor since Ken Clarke.
He managed to get the measure of Gordon Brown when he was still Chancellor and managed to get right up his nose in the process.

Not bad! I also suspect that his sources are telling him that he will need a stiff drink when the Treasury books are presented to him if elected, and a top up will be required when the off balance sheet stuff is added.

Its no longer sharing the proceeds of growth, its going to be sharing the pain of Labour's debt that will be the story after the next GE. And that means painful public spending cuts and tax rises for all.
Sorry, but the rich did bl**dy well under Brown, its was the middle and lower earners who felt the brunt of his stealth taxation.

And as for the 45p tax, it was classic Brown positioning - either oppose it and be seen as the party of the rich, or don't and watch the fireworks in hope of a Tory split. If anything, Osborne will be quite happy to allow this tax hike to stand right now, it sends out a strong political message for a party seeking power. Lets face it, its coming in if Labour win the next GE, it might not be a huge sum of money in the grand scheme of things, but it ain't going to amount to a row of beans for the rich in contrast to other countries compared to the debt we will have to tackle if we don't the whole nation to be seen as basket case like we were in the 70's.

No, Osborne didn't fall into the trap, just the usual suspects on the right here and elsewhere. But then, they don't have to make and justify their tough decisions from their comfortable armchairs.
I am not going to see public services slashed across the board while those that can afford the choice of private on health and education etc get away without even a tax rise like the rest of us.

TrevorsDen

"how sad it is that even Coffee Housers have slipped into leftist envy politics."

Let me repeat screwtape - I do not give a toss about people on £150+k a year.

Neither do the electorate. Do you really think pensioners will be sanguine about tax gifts to the rich whilst they struggle with low savings rates and rising inflation??

This extra 5p tax will be in place in the pipeline when we hope Tories take power. Its got to be minimally important in the scheme of thinks to go around saying it will be repealed.

There are LOTs and LOTs of other issues re. tax, not least the 20p threshold and the 40p band too.
Changes here are worth arguing about and how to fund.

You dumb asses need to wake up big time. Sod your intellectual/political purity. Your rallying call to get the entire Nation to step up to the plate will be 'Here's more money for the rich'?
You will be demanding its a priority to repeal foxhunting next.

oh, BTW if you are interested in long term aspirations I am in favour of one rate of tax 15p, with tax threshold at £15K.

But check out what happened to Merkels poll lead when her idiot finance spokesman started peddling that one ...

Nick Kaplan

Alf Tupper;

The marginal product of labour (MPL) is not "arbitrarily set" because it isn't set by anyone for it is not the same as a wage rate but is what wage rates are based on.

Essentially the MPL is the extra productivity a company gains by employing one more unit of labour. The MPL of CEOs is far higher than that of a cleaner’s or a machine operator’s for CEOs make decisions and choices that can cost, save or bring in tens of millions of pounds, hence their MPL is much bigger and so they rightly get higher salaries.

It is a common mistake to think that these salaries come at the expense of lower paid employees, but this is not true as without these individuals the companies concerned would get none of the money. The situation is the same with actors. Nobody argued that the salaries of the actors in the sitcom ‘Friends’ (who were, by the end, paid $1 million per episode) reduced the wages of the soundmen, technicians, make-up artists etc, because without these actors there would have been no show and no jobs for those lower down. The same is true of CEOs, without them making the decisions that save and bring in millions of pounds, millions of pounds will not be saved/ produced and the employees lower down in the company will be no better off, and quite probably worse off, for there would be nothing extra to give such people and quite probably less.

Your point that a company will not hire a worker unless he produces more than he costs is true, it is also, in general, true of CEOs.

There is of course a big issue about who should set these wage rates since if one sets one's own wages there is a huge temptation to pay oneself more than one produces. However these difficulties do not change the fact that CEOs produce far more than do lower level workers, although as you say, both jobs are essential.

Screwtape/ TGF, why the name change? I hope you aren’t giving up on UKIP just before the European elections; they will be getting my vote in those elections, although not in the general election.

David; I’m not defining the debate in closed terms, I am using the actual meaning of the terms ‘envy’ and ‘spite’ and spelling out their implications for what you have said about tax policy. As far as I understand the meaning of those words, and what you have so far said, then you must admit that your motivation is either envy, spite or ignorance, there does not seem to me to be another option.

I agree that the better off should pay both a larger amount and a higher percentage of tax (although only on practical not on moral grounds), but as I have said, they already do, they pay their own way and that of 24 others. The 45% rate will not actually reduce the burden of anyone else because, as you already admitted, it will make barely any difference to the treasury, it is therefore a punitive measure. I cannot see how you can deny this.

As for civility and responsibility; I think responsibility to shoulder the burden of increased state borrowing should not be placed entirely on the shoulders of the well-off, lest Atlas Shrugs (as in Ayn Rand’s great novel) and we are all left without a job. And, I ask, what exactly is civil about coercing a group of high achievers to give up 45% of their income because the rest of us don’t want to make any sacrifices ourselves and thereby accept that we cannot have everything we want, courtesy of other people? I cannot see the connection between civility and appropriating, by force, 45% of someone else’s income.

There is of course a big issue about who should set these wage rates since if one sets one's own wages there is a huge temptation to pay oneself more than one produces. However these difficulties do not change the fact that CEOs produce far more than do lower level workers, although as you say, both jobs are essential.
Screwtape/ TGF, why the name change? I hope you aren’t giving up on UKIP just before the European elections, they will be getting my vote in those elections, although not in the general election.
David; I’m not defining the debate in closed terms, I am using the actual meaning of those terms ‘envy’ and ‘spite’ and spelling out their implications for what you have said about tax policy. As far as I understand the meaning of those words, and what you have so far said, then you must admit that your motivation is either envy, spite or ignorance, there does not seem to me to be another option.
I agree that the better off should pay both a larger amount and a higher percentage of tax (although only on practical not on moral grounds), but as I have said, they already do, they pay their own way and that of 24 others. The 45% rate will not actually reduce the burden of anyone else because, as you already admitted, it will make barely any difference to the treasury, it is therefore a punitive measure since it will not help anyone else. I cannot see how you can deny this.
As for civility and responsibility; I think responsibility to shoulder the burden of increased state borrowing should not be placed entirely on the shoulders of the well-off, lest Atlas Shrugs (as in Ayn Rand’s great novel) and we are all left without a job. And, I ask, what exactly is civil about coercing a group of high achievers to give up 45% of their income because the rest of us don’t want to make any sacrifices ourselves and accept that we cannot have everything we want, courtesy of other people? I cannot see the connection between civility and appropriating, by force, 45% of someone else’s income.

Fergus Pickering

Susan Hill, I have to say I don't hve the Volvo NOW. My chilren were so ashamed of it I had to drop them a quarter of a mile from school. Mrs Pickering and I tootle about in a little second-hand Korean automatic, at least I think it's Korean. But my daughter has a real grizly bear of a tenth-hand French number that she drives around Kent like a reincarntion of Ayrton Senna. Brrrm-brmmm! I did once have a VW by I totalled it long ago. Hit a Volvo head on. The Volvo was unscathed. So...

JohnAnt

Fergus, Perhaps I didn't spell it out clearly enough. The 40% kicks in at (36K + personal allowance). When I wrote 'fiscally dragged into paying 40% on the 40K or so that will - after inflation - be a challenge for a family to live on' I meant that at £40K+ or just over, i.e. just at the point at which (after severe cost inflation and other incidental tax rises including council tax) someone living in London gets a salary rise that makes them think they can start to get by, they will be taxed on everything they earn that at twice as much (40% instead of 20%). To many who pass that 40% threshold, even at the best of times it comes as a sharp surprise. And it will be even more of a shock - for 40K will not be the 40K of today, it'll buy much less; but fiscal drag will leave the threshold where it is - it's one of Brown's little wheezes for increasing tax take without making overt tax rises. You say - rather complacently -
"I think they will manage to raise a family on that." I doubt it. For the cost of basics such as food and energy - quite independently of whatever the B of E or RPI or even CPI will tell us - will rise. You may do OK with your mortgage, but that's only because the government and the B of E have decided to help borrowers and get the taxpayers to pay for it.
£45K, even 50K, will not look like much in three years' time. But the tax thresholds will not rise, and that will provide the demotic pressure for tax cuts that is now lacking.

JohnAnt

typo alert - I meant to write 'over':
"they will be taxed on everything they earn over that at twice as much

Nick Kaplan

CS;

You should distinguish between selfish and self interested. Wanting to keep more of the money you earn is self-interested not selfish for it is not done at the expense of anyone else. Wanting other people to pay more taxes so you don't have to, is both self-interested and selfish for it is done at the expense of others. My position is neither selfish nor self-interested seeing as I am nowhere near to being affected by the 45% tax rate. Moreover self-interestedness is not immoral.

As for my description of the change in tax as Leftist envy politics, as far as I understand the meaning of the word envy and the circumstances under which the tax has been proposed, that is exactly what the situation is. If you think otherwise then it is up to you to show either that my definition of the word envy is wrong or that I have misunderstood how much revenue (or more accurately, how little revenue) will be raised. Banally asserting the opposite, without providing any argument to the contrary will not do.