Charging national insurance at 12% on all employees, including those earning over £50,000 a year, could raise £14 billion of extra tax a year
That would put us well over the peak of the Laffer Curve. Which, in that Saez and Diamond paper was put at 54% in taxes paid upon employment income. Note the careful description there. Not income tax, but taxes paid upon employment income and as the paper says, that includes employer paid employment taxes.
40 or 45% income tax, 12% employee NI, 13.8% employer NI – we’re well over 54%, aren’t we?