But don't the richest 1% have roughly the same proportion of the UK's wealth? AND that's the wealth that's known - the poor tend not to have accountants and schemes to hide their wealth and income - the wealthier you are the more is spent on protecting that wealth and hiding it from the tax man.
I hadn't realised that about NI. It does seem unfair that the better paid lose proportionately less of their income to NI, although they do pay twice as much tax on higher earnings which does balance it out somewhat.
I'm no economist, but I don't see what's unfair about our tax system. Yes, better paid pay a slightly lower NI rate, but they don't get a higher state pension than anyone else or cost the NHS more. They pay a much higher tax rate (and so they should) which is much more significant than NI.
As an example (in England): Mrs A earns £200k per year. She pays £69.9k income tax and £7.9k in NI, a total of £77.8k. Mr B earns £20k per year. He pays £1.5k income tax and £1.25k NI, a total of £2.7k.
In other words: Mrs A earns 10 x more than Mr B. She only pays 6 x more NI than him. But she pays 47 x more income tax. Her total tax + NI burden is 28 times higher.
I'm no economist, but I don't see what's unfair about our tax system. Yes, better paid pay a slightly lower NI rate, but they don't get a higher state pension than anyone else or cost the NHS more. They pay a much higher tax rate (and so they should) which is much more significant than NI.
As an example (in England): Mrs A earns £200k per year. She pays £69.9k income tax and £7.9k in NI, a total of £77.8k. Mr B earns £20k per year. He pays £1.5k income tax and £1.25k NI, a total of £2.7k.
In other words: Mrs A earns 10 x more than Mr B. She only pays 6 x more NI than him. But she pays 47 x more income tax. Her total tax + NI burden is 28 times higher.
And Mrs A is still considerably richer at the end of the year, whilst not necessarily working any harder then Mr B, just lucky enough to be able to do a more highly paid job
Unless I've missed it. It doesn't explain WHY there's a drop in percentage at £50K
I’m no tax historian but from what I gather, it started as a flat rate. Not a percentage. Everyone paid 4d whatever the hell that is.
In 1975 it became a percentage with an upper limit to how much anyone could pay.
Then they increased the percentage.
Then they introduced an upper rate around 2003.
So higher earners have been contributing increasing amounts since its inception.
I appreciate what you're saying, but it still doesn't answer the question of why income over 50K is charged at 1/6 of the income earned below that. Why 50K, and not, eg 40K or 60K?
If it was 2003 then it was a Labour Government who capped payment but I'm sure they'll try to find a way to blame Boris :-) He's mucked up enough things without taking the blame for other people.
I agree @punkdoc ..... and anyone who is retired doesn't pay any NI on their pension/s. So a whole sector of the population will not be contributing to the social care costs.
If income tax was being used then the burden would be borne by all of us ... with the richest people contributing the most. Seems fairer to me.
Good quality social care for all who need it should be affordable in this country ... we are not a poor nation. Bee x
Gardener and beekeeper in beautiful Scottish Borders
A single bee creates just one twelfth of a teaspoon of honey in her lifetime
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As an example (in England):
Mrs A earns £200k per year. She pays £69.9k income tax and £7.9k in NI, a total of £77.8k.
Mr B earns £20k per year. He pays £1.5k income tax and £1.25k NI, a total of £2.7k.
In other words:
Mrs A earns 10 x more than Mr B. She only pays 6 x more NI than him. But she pays 47 x more income tax. Her total tax + NI burden is 28 times higher.
In 1975 it became a percentage with an upper limit to how much anyone could pay.
Then they increased the percentage.
Then they introduced an upper rate around 2003.
So higher earners have been contributing increasing amounts since its inception.
Why 50K, and not, eg 40K or 60K?
When you don't even know who's in the team
S.Yorkshire/Derbyshire border
If income tax was being used then the burden would be borne by all of us ... with the richest people contributing the most.
Seems fairer to me.
Good quality social care for all who need it should be affordable in this country ... we are not a poor nation.
Bee x
A single bee creates just one twelfth of a teaspoon of honey in her lifetime