Isn’t this fascinating?

The Corporation began moving up to 100 of its stars onto staff contracts at the end of last year after MPs led criticism that it had been paying too many of them via “personal service companies”, which can be used as a legal way of reducing tax liabilities.

Those affected have been told that the starting points for negotiation are a 13 per cent pay cut if the presenters agree to become employees with only the statutory minimum conditions set down by law,

13% being, roughly, what the BBC will have to pay in employers’ national insurance contributions. We would therefore take this as proof of Ritchie’s contention that (correctly) most to all of the incidence of employers’ national insurance is upon the workers in the form of lower wages.

Which is fine: except that we now also need to point out that the starting rate of tax upon incomes is in the 40-45% level (income tax at 20%, employees’ NI at 11 or 12 %, employers’ at 13 to 14% on the gross sum) and top rate taxation of incomes is 55% or so (there being no employees’ NI at this level).

It’s therefore very difficult indeed to start claiming that the UK is a low tax country. And we’re also at or around that Laffer Curve peak that Diamond and Saez found in a tax system with allowances at that top rate.

In fact, just further proof that the UK has very high taxes indeed upon incomes……

7 comments on “Isn’t this fascinating?

  1. Will no stars seek to avoid a cut by trying other channels? Not like they can’t get jobs providing entertainment and interviewing etc on company contracts elsewhere. Just the BBC is targetted on such a thing.
    Now if the Guardian was targetted, or MPs…?

  2. *applause*

    The incidence of Employer NI falls wholly upon employees.
    The UK has not been a low income tax country since the mid 90s when the NI ratchet was clicked inexorably upwards and the DHSS. was not longer the exclusive beneficiary of it.

    It is now 10 %age points higher since then.
    Completely undoing all the headline drops in marginal income tax rates. NI is a very thinly disguised surtax.

    Yet we have the Milliboy f*cktard in parliament demanding ever increasing income taxation upon ‘the rich’

    Compare and contrast with my current abode

    http://www.ato.gov.au/Rates/Individual-income-tax-rates/

    The poor really are being f*cked over in the UK.

  3. Having argued the cretin into a corner where he created the straw man that those arguing for lower taxes on the poor (lifting many out of the ‘Curajus Stait’s maw) also advocated restricting the franchise to taxpayers- a position I don’t know anyone advocating, I notice his use of the term ‘civil society’ – which I’m taking as ‘people who agree with me’ – what a reprehensible piece of work he is- and God help the UK if he has the slightest influence over the Miliballs administration.

  4. Edward Lud, I advocate it too.

    The problem of government employees voting could simply be resolved by getting the state out of the health, education and broadcasting businesses. That would get the publicly funded voters down to a number where they wouldn’t make any difference anyway.

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