Two thirds of the proceeds of the colossal £35bn pension tax relief goes to just 8% of savers, who would save anyway.
Incentives really do matter you know.
Two thirds of the proceeds of the colossal £35bn pension tax relief goes to just 8% of savers, who would save anyway.
Incentives really do matter you know.
Would be interesting to see the spread of income tax paid by pensioners. I expect that 8% of pensioners pay two thirds of that.
Polly, like Ritchie, has such a punchable face.
The drawback of course being that in both cases a good beating would make them more attractive.
“The Telegraph, Mail and even the Sun warred against this planned assault on “the middle classes” – which is what they call the top 15%. Those who stood to lose were on the 40% or 45% tax rate and not middling at all. The 85% of people paying no more than the basic tax rate would have gained.”
No Polly, just no. The group thay gains above all others is that which pays 40%tax on its salary but is only likely to pay 20%on its pension. And es, by any definition, thay is indeed “the middle class”.
And you simply don’t know what the 85% paying tax at 20% would have gained (or what democratic representation they would have had stolen from them according to Richie). That is unless you are a personal friend of Osborne and he told you what his plans were. Because we don’t know whether the intended flat rate was going to be 30%, 25%, 20% or, a Nil rate through the creation of a super pension-ISA.
But then not knowing shit never bothered you did it Polly.
“But then not knowing shit never bothered you did it Polly.”
A point that is repeated in the comments to her article, but it wont stop her spouting this crap.
Income taxation is regressive between 42k and 50k ( and usually higher if you have no children ). As the 20% jump in PAYE tax can be deferred but you can keep the 10% drop in employees NI.
That needs ironing out pronto – knocking the level of the simultaneous NI drop and PAYE increase up to 60k would straighten this out and get rid of the perverse incentives in this income range.
She’s a polemicist, as Monbiot lamely described himself. Or a Pollymicist?
Henry Marsh,
As I understand it, progressivity or regressivity is conventionally measured by the average rate of total deductions as total income varies. Arithmetically, It is perfectly possible for that to be monotonically increasing across the gap between the upper earnings limit and the sum of the personal allowance and the width of the standard rate band.
It is true that, as earnings rise, a tax payer with fixed outgoings can reduce his average tax rate by making progressively larger pension contributions and enjoying marginal rate tax relief, but that is a separate issue to that of the “kink”.
Furthermore, prior to Gordon Brown’s A-day changes the defined benefit pension tax regime had an age-related earnings proportionate annual limit which topped out at 40% for over 50s, so even that was far less of a problem.
Is there a subject Polly does understand and write about in such a way that shows she understands?