And further, that the top rate is 60% or so.
Now, we know that the claimed basic rate is 20%. And that the top rate is 45%.
However, when talking about corporate taxation Ritchie tells us the following:
Companies do pay many taxes to government. In some cases, like the PAYE and national insurance they collect from staff and the VAT they collect from customers, the company simply acts as an unpaid tax collector for H M Revenue & Customs. That’s true of all sorts of national insurance by the way – even the part called ‘employer’s national insurance’ because all economists agree that this is really paid by employees who have lower wages as a result.
Thus the real income tax rates are not 20 and 45%.
They are, instead, 20% plus what is it, 12 ish percent employees NI, 13.8 % (?) employers\’ NI. For a combined rate north of 40%. And the top earners pay 45% income tax plus what is it, 1 or 2% employees\’ and then that further 13.8% employers\’ on top. Which is near 60%, not the claimed 45%.
It\’s very difficult to say that the UK is a lightly taxed country with these rates, isn\’t it?
Oh, and it also shows that we\’re over the 54% peak of the Laffer Curve that Diamond and Saetz calculated for a tax system that has allowances (the most important of which is being able to bugger off out of the tax jurisdiction).
When the Murphmonster next returns to what the income tax rate should be I wonder if he\’ll remember what he himself has insisted the real rates are.