Initially, I read with bemusement the news that George Osborne may reduce the rate of higher tax to 40%. I am hoping that he will do more to raise the threshold at which we start paying tax, as this will be a benefit to me. I thought that if he reduces the top rate of tax, there will be no room to increase the threshold at which we start paying tax - on the grounds that he would be reducing the tax take at both ends.
But I'm thinking that reducing the top rate of tax may increase the tax take. I know it sounds strange, but let's think about it for a moment...
If the top rate is reduced to 40%, fewer people might move abroad, and fewer people might take action to avoid paying taxes. So the %age of tax take may increase, and the overall amount taken in tax may increase. Let's see...
It won't have a big impact any way, as the number of people earning over £150k are few and far between - and I'm not one of them :(
TTFN.
No comments:
Post a Comment