Anorak | The taxpayers should get what they ask for: good and hard

The taxpayers should get what they ask for: good and hard

by | 7th, December 2012

AN interesting idea from the US . OK, so there’s a fight going on over how to deal with the deficit. Some want to raise taxes to close it, others want to cut spending. Shrug , up to you which method you prefer.

But let’s just run through this for the UK for a moment. The deficit is some ghastly number over £125 billion a year. One side says we can’t cut spending at all, every single penny currently spent is vital. Mebbe: but let’s have a look at what that actually means for taxes. How much do we have to raise taxes then to pay for all of this?

Well, obviously, we can just take it all out of the hides of the rich, can’t we? Except there aren’t enough rich people and they don’t have enough money.

There are 2.5 million households in the top 10% of the population. The average income of each of those top 10% households is some £80k. So £200 billion in total. And they already pay some 40% of their gross income in tax (this is adding everything in, from income tax to  insurance policy tax via NI and VAT). Which leaves them with £120 billion a year: less than the deficit.

So, if we decided to take all the money off the rich, every last single penny they earn or receive in a year, we still wouldn’t have dealt with the deficit. Not to mention, if we try to have 100% tax rates (note, please, not 100% above some certain amount, but

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Posted: 7th, December 2012 | In: Money Comment (1) | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink