Is 50/50 fair?
It\’s possible that it could be.
However, that\’s not the tax system we have so it\’s not a question we can ask about the tax system we have.
Employers\’ NI is payable at 13.8% on such sums, employee\’s at 2% when such incomes are earned through the PAYE system. The system which Richard Murphy states covers the majority of those earning such sums.
Second, I argue that the scope for revenues to fall as a result of the use of this rate is far smaller than claimed by many, especially since almost 60% of those paying this tax rate are employees for whom avoidance opportunities are, to be candid, often quite limited,
Yes, employers\’ NI is indeed, at the very minimum in large part, in reality probably in whole, a deduction from wages received (again, R. Murphy has stated so).
Thus, in order to have a 50/50 marginal tax rate we need to have an income tax rate of more like 40% (the exact rate is left to the reader to calculate).
If our conclusion is that 50/50 is indeed fair then we need to lower the top income tax rate.
As Ritchie has QED\’d for us.