{"id":14771,"date":"2012-03-23T14:49:36","date_gmt":"2012-03-23T14:49:36","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=14771"},"modified":"2012-03-23T14:49:36","modified_gmt":"2012-03-23T14:49:36","slug":"what-about-a-72-tax-rate-mr-osborne-thats-24-higher-than-you-think-optimal","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2012\/03\/23\/what-about-a-72-tax-rate-mr-osborne-thats-24-higher-than-you-think-optimal\/","title":{"rendered":"What about a 72% tax rate Mr Osborne? That’s 24% higher than you think optimal"},"content":{"rendered":"

George Osborne claimed to cut the top rate of tax in the budget.<\/p>\n

But he didn't. He made a new one.<\/p>\n

He announced that for families with child benefit with a person earning between \u00a350,000 and \u00a360,000 in the household 1% of the benefit would be earned for every \u00a31oo earned over \u00a350,000<\/p>\n

Child benefit is paid this year<\/a> at the rate of \u00a320.30 for the first child and \u00a313.40 for each additional child.<\/p>\n

Now let's take a family in this income bracket with two children. For each \u00a3100 earned they will pay \u00a340 in tax. And they will lose \u00a317.52 (on a 52 week basis) of child benefit. That's a tax rate of 57.5%.<\/p>\n

Try a 4 child family and the rate goes to over 71%.<\/p>\n

Of course some on around \u00a310,000 suffering\u00a0benefit\u00a0withdrawals\u00a0because\u00a0of the increase in the\u00a0personal\u00a0allowance will also suffer this sort of marginal tax rate as well. But ket's be clear, George did\u00a0not\u00a0get rid of the highest rate of\u00a0income\u00a0tax in\u00a0this\u00a0budget, he made a new one.<\/p>\n

Curiously, the IFS says 48% is the highest optimal rate of tax in the UK. Candidly, their logic is based on fantasy land maths, but\u00a0instinctively\u00a0I have a gut feeling anything much over 50% is high. However looked at a large swathe of\u00a0families\u00a0right in the 'hard working families' bracket where\u00a0incentives\u00a0to work are meant to have a big impact are now going to be suffering a rate much higher than that.<\/p>\n

Well done George! And all for the sake of your dogma driven wish to get rid of universal beenfits.<\/p>\n

They'll thank him even less when they\u00a0realise\u00a0that they now have to do tax returns and refund this case - which they'll have spent - at the end of each year too. Oh, what a fine mess George can make.<\/p>\n","protected":false},"excerpt":{"rendered":"

George Osborne claimed to cut the top rate of tax in the budget. But he didn’t. He made a new one. He announced that for
 Read the full article…<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[127],"tags":[],"class_list":["post-14771","post","type-post","status-publish","format-standard","hentry","category-budget"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/14771","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=14771"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/14771\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=14771"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=14771"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=14771"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}