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Letters: Thoughts on the pay and tax of the rich from Bernie Evans, Chris Hughes and Martin Lunt. The fact […]
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Letters: Thoughts on the pay and tax of the rich from Bernie Evans, Chris Hughes and Martin Lunt. The fact that more than 3,500 UK-based bankers earn over €1m, at a time when callous austerity policies are still causing hardship and the numbers of homeless and food bank users increase daily, is appalling ( Thousands of UK bankers paid €1m-plus a year, report reveals , 12 March). With their average pay over €2m, “skewed by huge payouts at the top”, it is clear nothing has been done since the 2008-09 crash, either to remedy the obscene payments or create a “socially useful banking industry”, largely because the Tory governments have obviously been quite happy with the situation.
Relying on the highly-paid’s sense of fairness, or even on their embarrassment, doesn’t have any effect, so an obvious solution is to raise taxation. Labour has promised to increase top income tax levels for those earning over £123,000 to 50%, but this will only encourage bankers and their ilk to demand more. As a temporary measure, to prevent inequality increasing further, perhaps taxes are in need of further incremental increases, reaching 95% when income goes over £1m, and 100% over £2m? The right-wing’s invention, the Laffer Curve , no longer has economists’ support, while the ideas that high taxes both decrease aspiration, and encourage the rich to emigrate, are Tory party propaganda.
If a fair society is ever to be achieved in the UK, drastic measures have to be taken, and where better to start than with tax?
Perth, Western Australia
• Nice juxtaposition of an article on the collapse of care homes ( Collapse of care homes firms ‘could force patients into hospitals’ , 12 March) with one on bankers’ bonuses in the same edition. What a great idea it was to outsource care for the elderly to uncaring equity management companies, serviced by equally uncaring bankers. Thank goodness the core NHS was spared the neoliberal treatment.
• Patrick Collinson is quite correct when he advocates that the rich should pay more on their capital via a wealth tax ( Actually, the rich pay lots of tax. But only on income, not wealth , 9 March). However, his statement that a relatively small number of rich people pay a very high proportion of income tax needs to be placed in context.
Income tax accounts for approximately 27% of the total tax take; national insurance and VAT each account for about 18% – 36% in total and thus more than income tax. National insurance and VAT are regressive taxes.
A person on the UK median salary of £27,000 pays 8% in national insurance; a person on £150,000 pays 4.4% in national insurance. And VAT is the same regardless of income – so £1,000 spent on VAT-incurring food items is £200 for everyone. The result is that the percentage paid of gross income for all taxes does not greatly differ between high earners and median earners – about 32% in total.
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Topics Banking Tax and spending Tax Pay Work & careers Family finances Food banks letters