£100k + earners in for a shafting next year?

[Kata]

It's amusing to watch all the jealousy towards high earners. "They are so greedy, it's obscene", etc. So if were offered two jobs, one at £25k, one at £250k, all the 'obscene' camp would be taking the 25k and feeling all good about themselves, I assume?

The job market is a market, that's all. If you have skills that are in high demand and low supply, you get paid more. You can increase your skills with experience and training; ie hard work. Some people are naturally more skilled and employable than others; sorry if it comes as a cruel shock to some people here that not everyone is actually 100% equal, but thats the way the world works.

I have left the UK, and now pay more in tax in my new base than many people in the UK earn gross. Interestingly, the tax rates here overall are slightly higher than in the UK; but they are spread a lot more evenly from 0 to 100+, and there is not the entirely illogical hatred and jealousy that a lot of the UK love to spout.

The UK has made it clear that they don't want that money, so I'm more than happy to take it elsewhere, where it is paying for a lot of peoples social security, health care, and all the rest. I applaud all the high earners who choose to vote with their feet; why should they sit around and get screwed when its obvious that the people who actually benefit from their presence (ie the low earners) don't even want them there.

[Saracen]

Post tax under the old system you would be earning 65k on 100k, 72k on 113k.

As to the new system, pass. You are effectively paying 40% tax on a further 6500, so you'd get to keep 3900 of that 6500. So, if my maths is correct, you'd be on 65k at 100k, 69.4k on 113k.

Under the new system, the allowance reduces by £1 for every £2 over £100k you earn. So to calculate the difference in Income Tax, take the difference between new pay and £100k, half it and deduct that from the £6475 PA.

i.e.

New pay = £113,000
Excess over £100,000 is £13,000.

50% of that (i.e. lose £1 per £2 earnings) = £6500 which is how much allowance you lose

And as allowance is £6475, and you lose £6500 of it, allowance is now nil.

So tax is :-

37400 at 20% = 7,480
75600 at 40% = 30,240

Total Income tax = 37,720

Or to put that another way, if you go from £100k to £113k (as the example asked) you'll pay 40% on that margin, leaving 13k at 60%, or £7800 increase in pay, after tax.

You then pay NI as well, on the £13,000 increase. i.e. you pay NI on what they're about to take in Income Tax. and so are double-taxed. But as this is way past the upper threshold, you simply pay the flat 1% on the extra, which is £130, leaving £7800 - £130 = £7670.

If you go from £100,000 to £113,000, the increase breaks down thus :-

Increase 13000
Extra NI (130)
Extra Income tax (5200)

Extra income received after tax and NI = 13000 - 130 - 5200 = £7670.

[SiM]

source: http://www.taxrefundcalculator.co.uk/

[dave87]

I've cocked up by using the figures for 2009/10 and simply taking off the extra tax on the 6500.

Completely forgot about NI to be fair.

But, how have SiM, you and me all got completely different figures?

[badass]

Yes i don't deny this.. i am sure they do give more as a percentage.

My council tax bill is almost 10% of my total gross wage. So tax and disposable income are all relative. So please stop moaning about TAX.

That's because you can't be bothered to get off you arse and get a better job than data entry. You'd rather moan about high earners on an internet forum than pull your thumb out of your arse and either learn something new or get another job. You can't use the recession as an excuse because you're been banging the same drum for several years.

That said, you like to think I'm a Thatcherite. I'll bet that through donations alone, I've raised more for charity in a year than you have in a lifetime and through sponsorship, more than you have in several lifetimes. This is because I actually bothered to use my own time for personal/career development which actually got me more time to help people that really need help, rather than some whinging communist that thinks the world owes him a living.

A thatcherite doesn't give a **** about anyone but themselves. A bit like you TBH. You just think the country should be run in a way that means you can dither around in a menial job without any responsibility and get the same benefits as everyone else.

[oolon]

Kata I think what people object to is paying to much for people who turn out to be a bit rubbish. I know the argument, you have to pay the best to get the best, however it is quite clear to me now that many of these people who think they are the best just arn't. What we need is to pay a desent salary for someone who can do the job required of them. I find it amusing bankers are demanding high bonuses as they did such a good job this year.... well my little self invested ISA also got those kind of returns, to I think I am gods gift? Nope! Infact I feel if I can do it any monkey could have. Now REALLY good people made a profit during a down year, few did that.

As a shareholder I find it frustrating, the major cost in many firms now is the people particularly bonuses, why do you need a bonus anyway? they should be happy they have jobs. How about a different motavational system for traders, bottom 5% lose their jobs, and a bonus for the top 1% only. Sales then to have that kind of system.

[j1979]

That's because you can't be bothered to get off you arse and get a better job than data entry. You'd rather moan about high earners on an internet forum than pull your thumb out of your arse and either learn something new or get another job. You can't use the recession as an excuse because you're been banging the same drum for several years.

That said, you like to think I'm a Thatcherite. I'll bet that through donations alone, I've raised more for charity in a year than you have in a lifetime and through sponsorship, more than you have in several lifetimes. This is because I actually bothered to use my own time for personal/career development which actually got me more time to help people that really need help, rather than some whinging communist that thinks the world owes him a living.

A thatcherite doesn't give a **** about anyone but themselves. A bit like you TBH. You just think the country should be run in a way that means you can dither around in a menial job without any responsibility and get the same benefits as everyone else.

can you READ the title of the thread?? learn to read, before you moan.

let me remind you "£100k + earners in for a shafting next year?"

we are not winging at all!

it's higher earners moaning about "poor them and their high taxes" ... poor people.. however will they cope..

[badass]

can you READ the title of the thread?? learn to read, before you moan.

let me remind you "£100k + earners in for a shafting next year?"

we are not winging at all!

it's higher earners moaning about "poor them and their high taxes" ... poor people.. however will they cope..

No it's not. It's people that aren't even on these kind of wages opining that people on higher wages are already taxed enough.

[j1979]

No it's not. It's people that aren't even on these kind of wages opining that people on higher wages are already taxed enough.

we are not winging at all!

it's higher earners moaning about "poor them and their high taxes" ... poor people.. however will they cope..

Don't get me wrong i don't begrudge someone higher wages, but when they complain about tax it just shows how greedy they truly are!

if person A, earns 20 times more than person B thats unfair

if person A, then thinks that higher tax band is unfair... it really is tough.. and that person can, after all, take the option of going on a lower tax band by taking a wage cut.

Again... i am NOT disputing higher wages, just not super high.... and people moaning about tax when they earn stupid amounts.

Ohh and if you haven't noticed.... im not the one complaining about tax.... Im just complaining about the people, complaining about tax! Usaully the same people that are nowhere to be seen when it's "their Round"

So please stop moaning about TAX.

So what if someone earning £100,000 gets a few quid less WHO CARES??

as you can see im not complaining about my wages, or higher earners than me, so please don't talk rubbish!!

high earners don't get 10% council tax bill

[scaryjim]

So if were offered two jobs, one at £25k, one at £250k, all the 'obscene' camp would be taking the 25k and feeling all good about themselves, I assume?

Depends on what the jobs were, who they were with, where they were based, and why one paid 10x as much. If the jobs were identical, I'd be even more suspicious of why one paid 10x as much - what exactly would you be expected to do for that extra money? Be sensible: you would never find two identical jobs with that kind of salary differential. I would no more select the £25K because it paid less than I would the £250k job because it paid more. I'd select the job I thought was most approprate to my situation, skills and aims in life. These do not include any particular concern about the absolute size of my salary.

And, even if I took the job @ £250k, I'd still consider my salary obscene. I'd almost certainly feel incredibly guilty about it, and I'd probably give vast amounts of money away to what I consider worthy causes. That's just the way I am.

[TooNice]

^ And indeed, I'd say that employers would most likely pay only as much (i.e. little) as they think they can get away with. Well, unless you are in a small company where you are mates/related to the boss anyway. But even if you are a boss of the company, your earning will be a function of how much your company makes, which is essentially how much your clients value your products/services.

I think that most people would opt for your answer regarding the 25k vs 250k dilemma. But the question then would be, how much would one donate. I am willing to bet that very few under those circumstances would give out 225k (and even fewer decline it). You may feel guilty enough not to buy a brand new Ferrari, but would you not treat yourself a little something you wouldn't have if you hadn't that raise?

Obscene, I am afraid, is very subjective. Those who earn under 8k may think that those who earn 25k is obscene. Those who earn 25k may think 75k is obscene. 75k may think 250k is obscene, and so on and so on. Of course, the voice get a lot louder as you go up the scale because so many more earn 25k than 250k. But if the average wage for a graduate is 18k (ish?), I can't possibly think how just over 5x that is obscene when it may still come with lots of string attached.

Kata I think what people object to is paying to much for people who turn out to be a bit rubbish.

Not really, that's a completely different argument, if read j1979's posts. He objects to people earning X amount regardless their abilities. I can go along with the point you are making, and if it was up to me, the costs of bankruptcy and/or losing a lot of money in an industry where you stand to make a lot of money should be much, much higher (risk vs reward). But then, those who promotes human rights would probably have something to say on my proposal [No murder in mind, but still several steps over the line]

Don't get me wrong i don't begrudge someone higher wages

I was going to give you the benefit of doubt when you made that post but you are making a really poor job disguising that.

so let me get this straight ..... you don't think there is a correlation between higher wages and the want for higher wages????

Not everyone who wants higher wage gets it. Given that most people probably wouldn't mind a raise, yet considerably fewer are getting it, I'd say that the correlation is as poor (if not poorer), than a correlation between lower wage and laziness.

No they should not.... they signed the Hippocratic oath!

Where in that oath does it say that they must not earn more than what you think they should earn for a living?

Besides if i am ever unlucky enough to need a Neurosurgeon i pray that he/she did not become one based on the money they could earn.. i hope they took that career path because they want to help the human race.

If a neurosurgeon ever save my life or a loved ones, then I frankly don't care how much s/he earns or whether s/he chose that career path based for the financial stability it provides. You may think that's their job anyway, but I have an issue with taking anything for granted.

I mean seriously, I read your post before I went out to get some food shopping done, and on the way back I just can't get the following scenario out of my mind (I was tempted to make this into a stick figure comic but I've got some work to do).

After 18h of delicate surgery:
Surgeon: I am happy to say that the operation was a complete success.
j1979: Oh thank God!
j1979: By the way, doc, how much do you earn?
Surgeon: Well, it was originally 75k but I was recently offered a 50k raise for coming up with this brand new procedure that I am in the process of teaching other surgeons.
j1979: You took that raise?
Surgeon: I didn't ask for it, but since I am doing a lot of overtime training other surgeons, I thought it would be nice to be able to putting money aside and travel the world and have a comfortable retirement when my hands are too old to hold the scalpel steadily haha.
j1979: You greedy <explicit>! [*Goes rant about how surgeons owe their service to humankind*]
Surgeon: ...

[dave87]

Here's the rub.

How many high earners actually use the things they pay for? Ok, Police, Ambulance, Fire Service etc, but what about healthcare? education? etc.

A large number of higher than averagely paid workers will have private healthcare, send their kids to private schools etc - they are paying more in tax, and taking less out of the system. In effect they are paying twice, or to put it another way, paying for someone elses operation, kid to be in school.

However do you see them complaining about this? Not majorly so? However they talk out against an even higher tax burden for potentially no return, and some have argued they shouldn't be able to say anything because they earn 'obscene amounts'. That annoys me.

[scaryjim]

A large number of higher than averagely paid workers will have private healthcare, send their kids to private schools etc - they are paying more in tax, and taking less out of the system.

Even where that's the case, it's their choice to do that. They know they are helping to pay for state education and national health care, yet they choose to not use it. That doesn't give them a very strong platform to argue against having that tax "burden" increased. If they really couldn't cope, then they could send their darling little ones to the local state school instead, saving themselves thousands a year in school fees.

No? Not so much of a tax burden after all then, maybe...

[TooNice]

^ That's hardly a real choice though. I don't think anyone would appreciate if I take half their wage (assuming it's significant enough) and tell them that they can freely eat in my shop (Heinz beans and toast - a feast for those who would go hungry otherwise!).. or eat wherever they feel like it and forfeit that half of their wage.

[j1979]

at the end of the day some people do good things for free..

like the invention of hypertext and the birth of the web, Sir Tim Berners-Lee may well be rich, but he did not ask for money to share his invention with us all. He did it at first to help himself and fellow employees! He could after all have had the mindset of bill gates and demanded money.

now i will say it again, i don't think anyone here, thinks that paying people more than others is a bad thing, but, when people complain about getting ripped off by tax when they are super high earners, it's a bit rich


so back to the tax


so here is a low earner. total deductions about 19.5%. but this low earner may have a council tax bill of £1500 about 10%. so total is closer to 30% tax



looking at the 1st earner here, i will use the £100,000 (easier to work out the percentage).
35% assuming the high earner is in the same council tax band £1500 thats a total of 36.5% tax.

so £15,500 (30% TAX) £100,000 (36.5% TAX) .... if you now think that increasing the TAX for the higher earner is unfair, then i give up!

[Saracen]

^ That's hardly a real choice though. I don't think anyone would appreciate if I take half their wage (assuming it's significant enough) and tell them that they can freely eat in my shop (Heinz beans and toast - a feast for those who would go hungry otherwise!).. or eat wherever they feel like it and forfeit that half of their wage.

It's more of a choice than those on low or even average wages get, because they can't afford private schools or, in many cases, private health care.

Put it this way .... everyone pays for state provision of services like roads, healthcare, education and so on, and everyone can call on them. Those that don't use them because they'd prefer to pay for private provision choose to not use them, which is a choice many of us would like and don't have.