The Budget, Lib Dem nonsense and the 50% rate

Posted by thisistibi PM | on Mon, 05/03/2012 - 10:48 1087 14 comments | report

I've been reading with great interest the latest publication from the Institute for Fiscal Studies, which gives lots of food for thought:

Quote:

In 2011–12, out of an adult population in the UK of around 49 million, an estimated 29.9 million individuals will be liable for income tax. This is a reminder that attempts to use income tax reductions to help the poorest in the country are likely to fail, since less than two-thirds of the adult population have high enough incomes to pay income tax at all.

Based on this evidence, how can the Lib Dems possibly justify increasing the personal allowance to £10,000 - thereby removing even more people from the charge to income tax? Is that really the objective - to get remove half of the UK from the income tax net? Can someone please remind me what exactly is "fair" in all this?

Quote:

Table 15 shows that the top 10% of income taxpayers now pay over half of all the income tax paid, and the top 1% (most of whom face the additional 50% marginal tax rate) pay 28% of all that is paid.

Based on this evidence, is the 50% income tax rate really "fair"? It seems that the top 1% of income tax payers already make a disproportionate contribution to the country.I kind of knew that the statistics were skewed in this direction, but I find the actual numbers pretty astounding. Why should so few support so many?