Why don\’t we run these figures backwards?

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.

3 thoughts on “Why don\’t we run these figures backwards?”

  1. 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.

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