The wilderness zone of 100% (or more) tax

Posted on October 5 2010

George Osborne has succeeded in introducing a 100% (or more) tax rate in the UK tax system.

For a parent of two children tipping over £44,000 of income there is not a single extra penny of benefit they can earn from the next £2,970 they earn. All will be absorbed in tax, NI, and lost child benefit.

Now I know that for 90% of people in the UK earnings of £44,000 are just a dream. But they’re also about the sum made to a great many middle managers. And now they have no incentive whatsoever to earn bonuses, take a promotion or improve their position, unless the jump is really big.

So George: keeping people in their place so that his friends can stay in theirs is exactly what this looks like. And I doubt that’s accident.

But what a damning indictment of a party that claims to promote personal aspiration.

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One Response

Child benefit cut will encourage tax avoidance « The Hoganist says:

October 5 2010 at 5:43 pm

[…] abolition of child benefit for those in upper-income tax brackets, he has effectively created a 100% tax bracket just for families with children. This we knew. But that ‘cliff-edge’ phenomenon has […]