What should the highest marginal tax rate be for any personal income

[directhex]

To answer the question, if someone's success is gained through a means that benefits no one else, I wish them all good fortune in life. It's their success, I have no right to demand they share it with everybody.

[Spud1]

Taxation is a careful balance. You want to make sure that people are paying a proportional amount back in to the system to cover public services, whilst at the same time not penalising people for succeeding - after all the whole way our society is organised is to encourage people to want to earn more. If you put the taxes up too high at the higher end, the incentive to earn more reduces (or vanishes) and you end up stifling growth. That may be something some people want (i.e. a more socialist or perhaps even communist perspective) - and if enough people desire that sort of society then the "growth" issue disappears, but without that buy in from the majority of the population it causes problems. History shows as much and ultimately most humans are greedy...

Personally I feel that 50% is around the absolute most it should be, and ideally the target should be lower (towards the 40% mark) although that's not affordable for the country at present. I also feel that these figures should be the total personal income tax too - so including NI for example. Or alternatively, that income tax should be lowered and NI increased/changed back to it's original intention - covering the cost of healthcare and benefits for the country as a whole; effectively acting as an insurance policy should you ever need to use it. I'd favour simplification wherever possible however so the former approach would be better!

Punishing people for success is a really daft idea and all that does is push people into avoiding the tax, which is very easy to do once you hit a certain threshold. It doesn't end up benefiting anyone - it's better to have a fairer system imo where the principle is that you keep more of what you earn than you have to give to the tax man.

[ik9000]

high taxation is not punishment for success. That is a ridiculous way to talk about it. Indeed high wage is not a measure of success either.

[Spud1]

high taxation is not punishment for success. That is a ridiculous way to talk about it. Indeed high wage is not a measure of success either.

It is for a lot of people. We all know there is more to life than money, but in a hell of a lot of careers success and salary are very closely related.

It may not be the only measure, but in a capitalist society it pretty much is....

[peterb]

high taxation is not punishment for success. That is a ridiculous way to talk about it. Indeed high wage is not a measure of success either.

While it may not be 'punishment' it is certainly a disincentive.

[opel80uk]

While it may not be 'punishment' it is certainly a disincentive.

Perhaps for you, but not necessarily for the general population. It could easily be argued that by being taxed more, people are compelled to work more to maintain their current standard of living. Of course, it's a fine balance - tax everyone 100% and most wouldn't do anything, but I'm yet to see any serious study that found say, the increase to 50% from 45%, manifested itself as a discentive in any substantial way.

[BobF64]

high taxation is not punishment for success.

Logically, high taxation is punishment for having an inefficient government and/or an overly burdensome populace.

[peterb]

<snip---but not necessarily for the general population. It could easily be argued that by being taxed more, people are compelled to work more to maintain their current standard of living.---snip>

Well that is a loose comment. I have yet to hear of anyone offering to work harder for less remuneration, and as the news often reports people's standard of living is reducing, I see no reports of people offering to work harder or longer hours. And the European working time directive effectively prevents people working longer hours, so that doesn't hold water, unless you are on a piecework rate.

But those 'salaried' employees who don't have fixed hours and end up working longer for an employee aren't going to see their pay increase, and that is the group of people who are more likely to fall into the higher tax bands.

In fact the only people who might be able to work longer/harder are the self employed, and they are already penalised by the tax system as they pay NI but are excluded from claiming some benefits.

[opel80uk]

Well that is a loose comment. I have yet to hear of anyone offering to work harder for less remuneration, and as the news often reports people's standard of living is reducing, I see no reports of people offering to work harder or longer hours. And the European working time directive effectively prevents people working longer hours, so that doesn't hold water, unless you are on a piecework rate.

Or you work in the City, where European working time directives are effectively ignored?

[SeriousSam]

Or you work in the City, where European working time directives are effectively ignored?

I have yet to work anywhere where working time directives were anything more than a guideline when it comes to salaried staff. Though there has been a slow shift towards trying to balance things out with time in lieu. Oh and ironically multinational companies seem to be much better at monitoring work / life balance than anyone else.

[peterb]

I have yet to work anywhere where working time directives were anything more than a guideline when it comes to salaried staff. Though there has been a slow shift towards trying to balance things out with time in lieu. Oh and ironically multinational companies seem to be much better at monitoring work / life balance than anyone else.

Well that is true - it is just another tool for those paid hourly to reduce the hours worked without a cut in pay - or work overtime - with the risk that they'll fall into the higher tax bracket, be penalised, so won't bother. End result, productivity falls.

[badass]

high taxation is not punishment for success. That is a ridiculous way to talk about it. Indeed high wage is not a measure of success either.

Can you please explain how to:

Stop a large number of the people that would be hit by this 100% tax from taking their brains and their ability to pay tax to another country that values their brains and ability to pay tax.
Incentivise people just below the threshold to put that extra effort in when they will not get any more reward for it.

A 100% marginal rate is a punishment for success. What else can taking 100% of the extra money someone earns away be?

However of course a high wage is not on its own a measure of success.

[badass]

To answer the question, if someone's success is gained through a means that benefits no one else, I wish them all good fortune in life. It's their success, I have no right to demand they share it with everybody.

I and the rest of the population absolutely have a right to demand a share goes back to society.
The only reason that person can get paid so much money is that society exists. Society exists because of the work of thousands of previous generations that are long since gone working to better society. We all have a right to take advantage of the opportunities that society provides us, however to suggest that no one should have to give anything back both through the work they do and through paying income tax is extreme.

Even a "self made" super rich person is not at all self made. They could only get that way because we have infrastructure and systems and so on.

In fact that view is so extreme and blinkered I wouldn't be surprised to find out you like to bomb communist conventions in your spare time!

[SeriousSam]

"Demand" is too emotive a word for my liking, however I do agree from a "no representation without taxation" perspective.

Oh and communists should be ridiculed not bombed

[directhex]

If you want to see what a tax-free Libertarian utopia looks like, try Somalia.

[badass]

"Demand" is too emotive a word for my liking, however I do agree from a "no representation without taxation" perspective.

I couldn't agree more.

Oh and communists should be ridiculed not bombed

As above! Its just that I suspect Teepee is a little too extremist to merely ridicule those stupid enough to believe communism is a good idea.