Hundreds of millionaires working in Britain\’s banks will receive an average tax cut of almost £54,000 when the top rate of tax is abolished this weekend, according to figures compiled by the Labour party.
The changes mean that 643 bankers, each earning more than £1m, could get a combined tax cut worth at least £34.6m.
OK.
The tax cut is from 50 p to 45 p. A 10% cut in hte rate therefore. If a 10% cut in the rate leads to a £34 million cut in the bill then the total bill must be £340 million then, yes?
It is at least vaguely possible to put forward the idea that gouging £340 million in tax out of only 643 people is enough tax to be gouging out of only 643 people.
And is still more than they were paying right up until the last month of the last government.
nope. think about this for another minute and you’ll see why it’s wrong.
Luis
I though so too, but then I did a back of the envelope calculation:
The 340 million is just the tax take from the income above 150K. So the above 150K income tax was 680 million. Taking 5% of this does give the tax take reduction of 34 million. Income tax between 10K and 150K is roughly 33 million on total income of 96 million. (643 x 150,000)
As it happens after the tax cut, the total income tax from this group (assuming the numbers above are correct) is roughly 339 million, whereas before it was 373 million.