Fourth Ritchie of the day!

This is really just to remind us all of it.

I say: businesses don’t pay taxes. People do.

Ritchie says:

Rather curiously on NI I agree with Worstall.

Excellent!

So, R. Murphy says that it is individuals, not companies, that pay national insurance.

So, marginal tax rates are not in fact 40% at the top end. They\’re 40% plus what is it, 12% employees\’ NI and 13% employers\’ NI?

Ah, no, the NI cap on employees\’ NI is about or below the top end tax bracket, isn\’t it?

Right, so top end marginal tax rates are thus 53% or so.

But wait! we\’ve also got the upcoming rise in the top tax rate to 50%.

And guess what else? Ritchie thinks that we ought to lift that employees\’ NI cap. Everyone should pay it on all their income above the minimal threshold.

So the tax system he\’d like to see is one of 50% plus 13% plus 12%. A top marginal tax rate of 75%?

Don\’t forget, Ritchie says that individuals pay NI.

Umm, anyone think we might be going over the Laffer Curve inflection point here?

7 comments on “Fourth Ritchie of the day!

  1. http://www.independent.co.uk/opinion/commentators/dominic-lawson/dominic-lawson-back-with-a-vengeance-the-politics-of-envy-817245.html

    That is well worth reading , from a while back and in particular this section

    “The question then arises: should the very rich be taxed more, so that much greater sums could be allocated directly to the least well-off? The problem, despite the impression that you might gain from reading the Sunday Times, is that there aren’t enough of the very rich to make a big difference to that equation.

    Again, the Institute for Fiscal Studies has done the groundwork: as part of an investigation into how to help the poorest, it produced detailed research last week which warned that ratcheting up income taxes on those earning more than £100,000 would be counterproductive in the fight to relieve poverty through fiscal means.

    The IFS calculated that the Government would maximise the revenue it collects from those earning over £100,000 by imposing a marginal rate – the additional tax paid on each pound of increased income – of 55.6 per cent. This, however, is perilously close to the current marginal rate of 53 per cent charged when income tax, national insurance contributions and indirect taxes are all included.

    The IFS concluded that “there is not a powerful case for increasing the income tax rate on the very highest earners, even on redistributive grounds.” As the head of the IFS, Robert Chote, observed, “These findings have important and perhaps uncomfortable implications for would-be tax and welfare reformers of all parties”.

    Indeed

  2. Oh, worse than that. It’s nearing the point at which the buggers are running flat out of other peoples’ money.

  3. Consider how truly awful a 75% marginal rate is; when you buy something costing £1 (plus VAT at 17.5%) you and your company will have to have created wealth of £4.70 because the State will have trousered £3.70 of the worth you have generated.

  4. Brian, that was uncalled for, it actually reduced me to tears.

    Beer has duty tax on it as well, but I can’t bring myself to calculate how much I pay Darling whenever I order a pint of Best.

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