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Cameron follows Boris: I’ll reverse Labour’s 50p tax
Paul Waugh24 Apr 2009
A Tory government would reverse Labour's 50p tax rate on the rich, David Cameron signalled for the first time today.
The Conservative leader said that while his first priority was to scrap National Insurance rises for those on modest incomes, he wanted to dump the super-tax too.
His remarks follow a call from Mayor of London Boris Johnson this week for his party to be more robust in opposing the Government's attack on the wealthy.
Deputy leader Harriet Harman said that a new Equalities Bill would seek to ban discrimination on grounds of wealth as well as race and gender.
It also emerged the Chancellor hid a further tax increase on the wealthy in the Budget small print. It aims to raise £2.9billion by taxing pension payments made to those earning more than £150,000 a year.
Mr Cameron has been careful to avoid falling into the trap of being seen to back the rich, but made clear that while his tax-cutting priority was the National Insurance hike for those on more than £20,000 a year, the 50p rate was also in his sights.
He told BBC Radio 4's Today programme: "We don't approve of the high marginal tax rates. But it's got to form its place in the queue of taxes we want to get rid of. How do we get rid of them? By getting to grips with spending now."
On the supertax, the Tory leader added: "It's a mistake. It's bad for Britain." He later told BBC Radio 5 Live that the 50p rise would boost Switzerland, where wealthy people could flee from London. Similar warnings were expressed by City leaders and economists today.
Downing Street was heartened by a Populus/Times poll showing that 57 per cent of the public support the new 50p tax rate for those earning more than £150,000 a year. It echoed focus groups taken by the Chancellor in recent weeks which showed voters believe the rich should be punished for the banking crisis.
Ms Harman, the niece of Viscountess Longford, today denied that she was seeking to wage "class war" in her new Equalities Bill. The Bill, expected to be published today, could lead to education authorities having a legal duty to encourage parents from poor backgrounds to apply for the best schools and health authorities to allocate money specifically for the poorest. Regional development agencies could also be forced to give more grants to deprived areas.
The Labour deputy leader said that as British laws already covered race, gender, age and disability, it was time that wealth was also included.
Ms Harman said equal societies were more efficient and peaceful. She added: "If society has huge divisions, if you have the super-rich behind the gates and people who are struggling to make ends meet, that does not make sense."
Reader views (39)
presumably rich bird harman means China s a good example of "equal society"
well lets start with class and privileged titles like "right honourable" and viscountess- how about it Harriet?
- John Graham, london UK, 14/05/2009 14:12
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Cameron would wouldn't he this affects 1% of people and look at all the bleating you'd think they were asking that they put their on the game for the Treasury
You all made excess profits in the good years dont squeal when you have to give some back. Complaining about this is pure greed.
If you earn £175000 a year what is your problem this will affect you on a marginal basis you al;ready paying 40 on it.
- Duncan, Kent, 14/05/2009 13:12
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Val Daniels, Mijas Costa, Spain - do you actually pay UK tax?? If not then please keep your comments to yourself. If you do then please make your comments sensible. That 1% of the population you're keen to keep hitting (a) already pay 23% of the total take collected by the HMRC, and (b) most of them are NOT bankers but are hard working business people who create jobs and income for others. Know your facts!!
- Malcolm, London, 14/05/2009 13:12
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Of course the 50p tax should be scrapped,why should those that can afford to pay a little more tax be singled out,far better the burden fall on the shoulders of those that cannot.
- Michael T Forbes, Luton, 14/05/2009 13:12
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Duncan & Kerry - wake up will you. This is NOT about the rich moaning. I don't earn anything like £100k let alone £150k. And I know that ALL parties will have to take more tax from us all, not just the wealthy. The problem with this change by Darling/Brown is that it simply WONT make any difference to the current problem. It's been done purely for political reasons. And get your facts straight about Cameron - what he's actually said is that his FIRST priority will be to reverse the increase in NI to 1.5% imposed by Darling from 2011 as this impacts ALL people earning over £20k. Only then would look to see if we can afford to reverse the 50% rate. WAKE UP before you drift into the same mistake you made at the last election PLEASE!!
- Malcolm, London, 14/05/2009 13:12
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This government should concentrate on the criminals who claim benefits using multiple and fake identities and are raking it in. But no, Nu Labour would much rather go after honest people that work for a living. Paying 50%
tax is bad but when you think of the people who benefit from Labour's largesse, its worse.
- Ab, London, 14/05/2009 13:12
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Andy - you're totally missing the point re the other tax increases he also imposed on the higher earners - i.e the removal of personal allowances. EVERYONE (including theose over £150k) pays 11% on the rfirst £45k. I suggest you read the post by John from Swindon (below) who shows quite rightly how the so-called unfairness of the current proposay is an illusion. In fact, the top 1% of the UK earners pay over 23% of the HMRC tax-take each year. And let me emphasise I don't earn anything like £100k, so I'm not whinging personally, I simply believe that the socialist view of squeezing the rich is a political step that doesn't bring any economic benefit). Raisinh marginal tax rates ALWAYS leads to REDUCTION in total tax revenues
- Malcolm, London, 14/05/2009 13:12
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Can someone please ask Cameron if he will also reverse this cursed trend of speed cameras, crazy low speed limits, road humps and actually consider raising speed limits so we can drive appropriately instead of under duress?
Guess it brings in too much money for any Govt to dump these hair-brained schemes.
- Chris Williams, Cardiff, 14/05/2009 13:12
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Dr Ashley
There is a tax free sum (I haven't seen anything to say that the nil rate band is being abolished)- approx £6,500 per annum then the first £150,000 thereafter will be subject to the usual tax rates of 20% and 40%. National insurance contributions stop being paid at about £45,000 per annum so between £45,000 and above the higher earners pay NO national insurance. Which (on income earned over the nil rate band) means between between £45,000 and £150,000 the person only pays 40% of his/her income in tax, from £150,001 and above the person pays 50%. For every additional £1,000 earned above £150,000 the tax payer (if he/she hasn't found a loophole to avoid paying tax) the tax payer will pay an additional £100 above what he/she currently pays.
50% tax makes nice news headlines but so many people don't seem to understand that it is only 50% on income earned above £150,000!
- Andy, london, 14/05/2009 13:12
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I think that Michael T Forbes, Luton has it spot on. It makes much more sense for the poor to have the burden of taxation not the rich. Stop picking on the wealthy for heavens sake! Holiday homes, posh schools and au pairs don't pay for themselves you know!
- John, Brixton, 14/05/2009 13:12
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Cameron follows Boris: I’ll reverse Labour’s 50p tax"
No he knows he can't reverse it and persuade us that he has the economic means to get the Uk out of the world recession difficultird we are in
- Keith Price, Luton, England, 14/05/2009 13:12
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Long time since I have commented and since leaving England. Comments supporting Broon's theft of hard-working entrepreneurs' money just confirm how dumb NuLab fellow travellers are. Broon, Darling, Harman and the rest have utterly destroyed the UK and all you NuLabists can focus on is a ridiculous act of meaningless populist sleight-of- hand economics. High taxes and labour are why I left - you will never see my more than £250,000 a year taxes again; and there are many more like me. BTW, I am not a banker.
- Andrew, Leaving the sinking ship England, 14/05/2009 13:12
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Andy of London: an informative comment, but you omitted to say that MP's do not earn £150k, thus will be exempt from the 50% Tax Band. MP's massive incomes are based on modest salaries plus MASSIVE expense claims, which of course do not attract Income Tax.
And we thought MP's were daft!
- Anil Chatterjee, Manchester, 14/05/2009 13:12
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Why am I not surprised. Did anybody seriously expect David Cameron to have regard for 99% of taxpayers, when the remaining 1% who earn £150k a year are whining about paying 50% tax on any income they earn ABOVE £150K. Of course he will identify with them, he obviously feels their pain, but is impervious to ours. We can all go to hell in a handcart. I have to say I am somewhat surprised that he is so subservient to the Mayor; doesn't bode well for the future, does it?
- Val Daniels, Mijas Costa, Spain, 14/05/2009 13:12
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Over a quarter of the government spend is on social services. (and their entertainment budget) the amount of money this government throws at scroungers is unbelievable, if you work hard you deserve to be rewarded, if you never lift a finger in your life then im sorry i dont see why i should fund you.
My sister was pregnant and claimed benefits for a short period, as soon as she went back to work she was worse off! how is that fair? its not about taxing the top earners its about giving it to people who dont deserve a penny!
- Graham, London, 14/05/2009 13:12
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The 50% tax rate is primarily to distract the electorate from noticing the enormous borrowing requirement that will mean we all suffer higher taxes and worse public services for many years. The higher rate will make a relatively small positive or negative contribution to the total tax take depending on what these people decide to do as a result of the change.
The major issue is the nightmare state of the public finances. This is caused partly by the bank bail outs - but also because this government was spending the money coming in from the city during the good times rather than reducing borrowing to have money for the bust that has now arrived. The tax take from the city isn't coming back in a hurry - so we are now clearly spending beyond our means at a very frightening rate.
So... Mr. Brown was right - No more Tory boom and bust. Just now it is Labour boom and super-bust spread out over many years.
- Tim, London, 14/05/2009 13:12
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andy - you're one of those gullible people who seem to believe what Brown & Darling tell you. At least you should get your fact right before posting comments. Firstly, as Dr Ashley says, NI is payable at 1% on ALL earnings & is NOT capped at 345k sas you suggest. Secondly, Darling announced that this will increase to 1.5% from 2010. Thirdly, in addition to imposing a 50% marginal rate above £150k he removed perssonal allowance on a sliding scale above £100k. This, combined with the 50% rate AND the 1.5% NI means that those on between approx £112,000 and £150,00 will actually pay a total of 61.5% in tax/NI on marginal earnings. As I say, if you're going to spout nonsense at least have the inteligence to base it on facts!!!
- Malcolm, London, 14/05/2009 13:12
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When Harriet Harman refers to "the super-rich behind the gates (whilst) people are struggling to make ends meet" does she include MP's with their noses in the expenses trough behinf the gates of the house of commons?? discrimination based on wealth - another wacky idea from Ms Harman sucking up to the left of the party
- Malcolm, London, 14/05/2009 13:12
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Paul
My apologies - NI is paid at 1% on all income after £45,000 but not the full 11% required upto £45,000. In my haste to correct the figure provided by Dr Ashley I forgot about the 1%. So from £45,000 up to £150,000 41% income tax is paid. From £150,001 51% is paid. What gets forgotten is that NI is a tax that impacts, proportionately higher on those on incomes below £45,000 than those with incomes above £45,000 - a less fair tax than income tax!
- Andy, london, 14/05/2009 13:12
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The reality is that the people creating the wealth are the ones who can make a difference to the future of this Country. Taxing the hardworking average wealth creators and recycling taxes on Civil servants does nothing for the Economy.
This is old labour and verging on Communism. Remember the party apparatchik have datchas (second homes)in London at taxpayers expense and no rules on nepotism to employ family members.
Try and buy a Family home on 3 times salary in London and see what you get. £100K may sound like a lot but to buy a house this salary is not out of the ordinary and you are hardly "rich". Another bankrupt labour policy that will only backfire.
- Stephen, Swindon, 14/05/2009 13:12
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Come on then, you are talking the talk lets see you showing that you can lead this Country by getting Brown out now never mind waiting until next election. For sure Labour will be out at next election but it will take at least the next 5-10 years just trying to sort the mess they left behind out so get rid of now. I HATE TO THINK HOW MANY £BILLIONS DARLING MAY FIND AT THE BACK OF HIS SOFA ETC PERHAPS THESE ARE WHERE ALL THE BLACK HOLES ARE?
- Mike, London England, 14/05/2009 13:12
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Andy, in addition to your mistake on higher rate NI,which increases to 1.5% in 2011, high earners are losing their personal allowances next year. And people's second state pension accrual is being capped.
- Ab, London, 14/05/2009 13:12
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Could it be that Harriet Harman meant Labour will remove wealth inequality by raising everyone's tax to 50%?
- Stuart, Basingoke, England, 14/05/2009 13:12
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Andy is like many who do not read the small print in Brown's budgets. NI is charged at 1% on all earnings above about£770 per week but provides no benefit of any kind so why it can be described as NI god knows.Under the new proposals personal allowances are withdrawn on £1 for every£2 above £100k so no personal allowances for those over about £112k. someone on £30000 at present pays about £4.8K tax someone on £150000 at present pays about £50k tax. To listen to Gordon it is not fair that at present someone with 5 times as much income pays 10 times as much tax and they should therefore in future pay away over 50% of their extra income. With that sort of understanding of reality it is not surprising that we are in such a mess.
- John, swindon, 14/05/2009 13:12
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Malcolm
Far from believing everything said by Darling/Brown I simply said I hadn't seen anything about the loss of a personal allowance - I am happy to be corrected.
You correctly say NI is on earnings above £45K is 1% (apparently to be changed to 1.5% above £45,000) which, as far as I am aware, from independent websites, is still less than the 11% NI that everyone earning below £45,000 has to pay.
- Andy, london, 14/05/2009 13:12
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Oh good that means he will be increasing the rate of tax for the lower earning population (the money has got to come from somewhere)!! Isn't it enough that those who earn high salaries/large corporations have access to tax avoidance loopholes which means the rest of us actually pay a higher proportion of our income in tax than the higher income earners. Of course Cameron is going to look after his traditional voters at the expense of the traditional Labour voters.
- Andy, London, 14/05/2009 13:12
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Andy, NI is not capped on the extra 1% Gordon added years ago. He promissed not to raise income tax so added 1% to NI and removed the cap. You can't believe a word these guys say. Whiter than white my a**e
- Paul, London, 14/05/2009 13:12
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Not a surprise,the rich mans party reducing their taxes.Will we go round in circles by voting for one of two parties every couple of years,if so we will be back to square one in another eight years.Need to be bold in the next election,a new party for a new dawn.If we the voter turn are backs on both these parties,politicians will soon start to listen to the people and serve our best interests,until then,we have only ourse.
- David, london, 14/05/2009 13:12
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The people creating the wealth distribite it? where does that Myth come from? the only spend it on themselves and creat more wealth for themselves, the govt is right by taxing those higher on what they earn over 150,000, the rest of you who are bleating on there behalf, how much of there money do you see? by not collecting the revenue they should rightly be paying our schools hospitals armed forces etc etc the list goes on and on would suffer, these are the services that you, the ordinary person needs, but hey just keep worrying about the fat cats paying a bit more and allow an cutter like Cameron in to hammer and cut public services so he can give his rich buddies more cash for that big yacht they need.
- Brian, Wiltshire, 14/05/2009 13:12
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This here 50% top rate is, when the other income tax of national insurance plus loss of tax free allowance, a tax of 63.8%. When a government takes more than half of what anyone earns, that is just criminal. I don't care how rich a person is or how much they earn, taking more than half is totally evil. It's a political sop to the class warriors of the left.
- Dr Nick Ashley, Huntingdon England, 14/05/2009 13:12
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The Tories are revealing their true nature every time that Cameron or another speaks. They are all the time electioneering. I usually vote Labour only to try and keep the Tories out though I am disappointed up to now with my cxhosen partys,performance.
T H Leeds
- Thomas Hayes, Leeds UK, 14/05/2009 13:12
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Looks like Boris is becoming an increasingly influential figure in tory HQ.
might not be a bad thing either, he seems to have a genuine feel for his electorate.
despite the ramblings of a few red never do wells.
- Scotty, london, 14/05/2009 13:12
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Jobs are only incidental to business as a shopkeeper or other needs someone to do the actual work. Creating a job is not his or her priority but these entrepreneurs are in it because they want to get more money than they would get working for someone else. Ask the ex pats in Spain etc, where they got their money to splash out on villas and the luxury lifestyle.
Awesome Geronimo Leeds
- Thomas Hayes, Leeds UK, 14/05/2009 13:12
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We all have two choice's at the next General Election,we can vote,Tory,or Tory,take your pick,by the way Scott,say goodbye from me to all those thousands leaving because they will find it a struggle trying to live on £3,000 a week.
- Gerry Gordonstone, Highgate, 14/05/2009 13:12
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Malcolm do you understand economics? Your rabid tory views just show you believe what any Tory says because they are a Tory.
I on the other hand believe all politicians are born liars and will say anything and I mean anything they think will get them in power.
So explain to me why Cameron is any different his pasts tends to suggest he is a right winger of the Redwood variety out of touch with reality. The man doesn't understand day to day life he is privilidged always has been always will be.
His view on inherutance tax are another fine example of his etos of the rich will get richer under a Tory government the poor poorer.
If you really want that then vote Tory and see the man who truly believes that Thatcher was is a God and let him in power say goodbye to our way of life and hello serfdom.
- Duncan, Kent, 14/05/2009 13:12
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The rich get richer and the poor poorer, why shouldn't the rich pay more Taxes?
- Stan White, leeds, 14/05/2009 13:12
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Already I know of several people looking to leave, and these aren't just knee-jerk comments.
57% of the public may support this, but the reality is the tax-revenue will deteriorate further once the inland revenue lose the revenue accrued from the basic rate and 40% rate of the '1%' of the 'superrich' population who are affected.
I'm a long way off from earning 100k, but I've got my eyes open and can see the damage the brain-drain will cause.
It happened in the 80s, it will happen again (especially taking into account that emigrating is much easier now than 20yrs ago).
With technology you no longer have to be based in London. The hardware can be here, but you don't have to be sitting here.
We've been absolutely destroyed by this Govt and the freeloaders who jumped on their bandwagon.
- Scott, London, 14/05/2009 13:12
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Val Daniels, Mijas Costa, Spain - do you actually pay UK tax?? If not then please keep your comments to yourself. If you do then please make your comments sensible. That 1% of the population you're keen to keep hitting (a) already pay 23% of the total take collected by the HMRC, and (b) most of them are NOT bankers but are hard working business people who create jobs and income for others. Know your facts!!
- Malcolm, London
Dear Malcom, London,
Opinions are like a**holes, everybody's got one!
Regardless of whom, where, what they are, I still believe they have a right to an opinion, whether we agree with them or not.
Malcom, you have the right to disagree with what they have to say, but not their right to say it!
I have opinions on what happens elsewhere in the world, like many others, and, like many others, it is just an opinion, and in all probability my opinions will anger other people! That's what free speech is all about!
GERONIMO
- Geronimo, LONDON MIDDLESEX, 14/05/2009 13:12
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Actually i used the budget calculator to check what my income will be with the new arrangements and it seems I will be £400 a year better off. Only the the very rich will "suffer" (although they never do), however, the Tory bloggers will be foaming at the mouth, and i see cameron is going to reverse it. Think of your rich friends first Dave.
What idiots the British public are.
- Kerry, Purley, 14/05/2009 13:12
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