Around 25,000 people earn more than £1m a year. Raising their tax a little could let Rachel Reeves end the policy so many in Labour hate.
The economic picture that [Rachel Reeves](https://inews.co.uk/topic/rachel-reeves?ico=in-line_link) painted in her first financial statement as Chancellor was a grim one – warning of a £22bn black hole in the UK’s finances and the tough decisions that would result from that.
Her statement included cuts to infrastructure investments and the [winter fuel payment](https://inews.co.uk/topic/winter-fuel-payment?ico=in-line_link), among others, and in subsequent interviews she confirmed that some tax rises are likely to be introduced this autumn to address the gulf.
But with the [cost of living crisis ](https://inews.co.uk/topic/cost-of-living-crisis?ico=in-line_link)continuing, and many households already struggling to make ends meet, there is one group that many in the country would like a Labour Chancellor to target – the wealthy.
It might seem like an obvious option – this group are among the top 2 per cent of earners. But there’s close to a million of them and these days state school head teachers and NHS doctors can fall into the bracket.
Breaking your election promise not to raise income tax for such a vocal and empowered group could be far from a political picnic for Reeves.
# French politicians are calling for a 90% top-rate tax, just 50% could help Reeves
But what about the *really* high earners? Couldn’t the ultra-wealthy be made to pay a bit more? What would happen if the Chancellor sought to fill some of her black hole by going – not to Britain’s wealthiest 1 per cent or even the top 0.1 per cent, but an even more select group – those earning more than £1m a year?
She could argue she has good reason to. Coming at a time when the leftist bloc that won the most seats in France’s parliamentary election in July has been calling for a 90 per cent rate of income tax on high earners, the contrast with Labour’s position seems stark.
Official income tax statistics from HMRC analysed by **i** show that the UK’s tiny fraction of ultra-high earners already pay a significant amount of tax – but that in theory at least, quite a bit more could be raised.
These figures reveal the UK has 25,000 people who earned more than £1m in 2021-22, the latest year for which figures are available, (22,000 of them were men). These people earned an average of more than £2.8m each, and together they paid more than £28bn in income tax. That’s significantly more than the £26.9bn in income tax raised from the 18 million taxpayers earning £30,000 a year or less**.**
Any-Competition3770 on
Like fuck are they going to use it in the things we want…
The money will go to pad pockets and egos. Same as always
H7H8D4D0D0 on
Are these £1m earners really that mobile? Most of them would have moved to the USA or low tax countries already. Most of them are in the executive merry-go-round of UK companies so I suspect you wouldn’t have too big a fall in tax receipts.
GMN123 on
*Provided no one changed their behaviour as a result of the new tax rate…..*
That’s not how the world works though, is it?
Taking 45% of someone’s earnings is enough. After NI (both sides), VAT on purchases, excises, inheritance tax, council tax etc these people are contributing a lot already if they’re doing it by the book. Maybe instead of sticking it to those who are playing by the rules we could go after those who aren’t.
Automatic_Sun_5554 on
If France have a 90% top tax rate, we might see even more people arriving in boats
meandering_fart on
Yes let’s totally drive away all the high earners that support our economy and create jobs to more favorable tax jurisdictions. This is the fucking problem with people that have socialist tendencies – they see someone with wealth and success then plot ways to undo it for everyone. To me it’s like the kid that’s losing at football and so they grab their ball and go home.
Everyone loses because of one loser.
bduk92 on
The frustrating thing about this is that those earning £1m will also more than likely possess the means to rearrange their finances to get around this.
Closing loopholes, or altering how we tax high earners needs to be a priority, otherwise the only realistic lever the government will have to actually raise tax revenue will be hitting middle earners who dont have an accountant on speed dial.
Asleep_Mountain_196 on
I’d rather spend 2.5bn on more deserving things such as more GP’s or nurses, rather than bailing out peoples third+ child. You could fund an extra 15,000 GP’s salaries with this amount of money.
Labours free breakfast clubs plan already provides additional sustenance and childcare which free’s parents up to work the extra hours to support their family choices.
AcademicIncrease8080 on
I have several friends already considering leaving because of high taxes + getting very poor and overwhelmed public services in return, further tax increases will just push more people over the edge especially in a globalised world where it’s fairly easy for skilled labour to move around.
One doctor friend has gone to Canada already for a quadrupled salary, a coding friend is going for big tech jobs in America again to at least quadruple their salary (with much lower taxes too).
Difficult-Broccoli65 on
Why on earth should this end the child benefits cap?
If you can’t pay for them then don’t have them. There’s NO excuse for having more than 2 in this intance.
Put it towards things that will benefit the majority – not just the scroungers
not_who_you_think_99 on
“Provided no one changed their behaviour as a result of the new tax rate”
Whoever wrote this is either ignorant or in bad faith.
If you earn a salary > £1m there isn’t much you can do. But how many people earn that?
Wasn’t the reason that those who could postponed a big part of their income? Eg not taking dividends from their companies, not realising capital gains, etc?
sober_disposition on
Why has THIS of all things become this season’s morality barometer?
exileon21 on
At some point politicians will have to admit we have a spending problem not a revenue problem, but I’m not banking on it happening before there is absolutely no other choice
ShockingShorties on
Why do we only talk/ think about income tax?
What about all the tax loopholes that companies and individuals exploit?
MuthaChucka69 on
Moving the deck chairs around on the Titanic, we are late stage capitalism and it’s only going up get worse.
annonn9984 on
Keep the cap. Can’t afford more kids, don’t make them.
donalmacc on
There are an awful lot of temporarily embarassed millionaires in this thread…
WitchesBravo on
UK lets you put up to £20,000 a year in tax free ISA. In Canada the equivalent tax free account only lets you put $6000 (£3400) a year. Maybe start there. Most people do not have 20K to put in tax free savings every year
knotse on
Couldn’t we end the cap anyway? We are already running a ‘deficit’ and it’s only increasing. Plus, if there is worth in funding a child, why not more children? Or is it seriously proposed that the marginal utility of children decreases significantly after the second?
Hot-Red-Take on
Excellent idea, anyone over £1m should defo pay more tax…
Talentless67 on
In order to give to someone who hasn’t earned it, you have to take it from someone who has.
HeadPage6783 on
Or how about we downsize the government, lower taxes across the board and that way people can keep the money they earn?
general_00 on
Why stop at 5%? A 10% income tax raise could pay for this and also something else /s
LCFCgamer on
True
But they rarely model changes of behaviour in these rises
Eg. Scottish high earners paying tax in England instead when Scotland raised taxes
Kitten_mittens_63 on
Is the government actually talking about this or is this completely made up by this newspaper?
Mtarfa102 on
This income tax is not unprecedented – we had a 50% income tax rate during the recession! All this talk of “they’ll run away to Mars and set up offshore accounts is flawed” is based on a small amount of real data extrapolated to oblivion.
Bring it on. If anything, income tax isn’t the primary way to tax these people.
Bicolore on
Its going to be really easy for me to avoid this tax.
AlexT301 on
Better yourselves so you can pay for someone else’s kids
BoneThroner on
Do you know what else could end the child benefit cap? The current tax regime after a few years of **economic growth.**
Mistakenjelly on
Nice of the I to assume all of us want an end to the child benefit cap.
Cross_examination on
We should absolutely tax rich people more and we absolutely should stop supporting professional breeders.
31 Comments
Around 25,000 people earn more than £1m a year. Raising their tax a little could let Rachel Reeves end the policy so many in Labour hate.
The economic picture that [Rachel Reeves](https://inews.co.uk/topic/rachel-reeves?ico=in-line_link) painted in her first financial statement as Chancellor was a grim one – warning of a £22bn black hole in the UK’s finances and the tough decisions that would result from that.
Her statement included cuts to infrastructure investments and the [winter fuel payment](https://inews.co.uk/topic/winter-fuel-payment?ico=in-line_link), among others, and in subsequent interviews she confirmed that some tax rises are likely to be introduced this autumn to address the gulf.
But with the [cost of living crisis ](https://inews.co.uk/topic/cost-of-living-crisis?ico=in-line_link)continuing, and many households already struggling to make ends meet, there is one group that many in the country would like a Labour Chancellor to target – the wealthy.
Results from polling for **i** last week revealed that [a narrow majority of voters want Reeves to raise income tax for high earners](https://inews.co.uk/news/politics/tax-hikes-most-popular-voters-reeves-budget-3219387?ico=in-line_link) in the Autumn Budget – those on the top rate earning more than £125,000 year.
It might seem like an obvious option – this group are among the top 2 per cent of earners. But there’s close to a million of them and these days state school head teachers and NHS doctors can fall into the bracket.
Breaking your election promise not to raise income tax for such a vocal and empowered group could be far from a political picnic for Reeves.
# French politicians are calling for a 90% top-rate tax, just 50% could help Reeves
But what about the *really* high earners? Couldn’t the ultra-wealthy be made to pay a bit more? What would happen if the Chancellor sought to fill some of her black hole by going – not to Britain’s wealthiest 1 per cent or even the top 0.1 per cent, but an even more select group – those earning more than £1m a year?
She could argue she has good reason to. Coming at a time when the leftist bloc that won the most seats in France’s parliamentary election in July has been calling for a 90 per cent rate of income tax on high earners, the contrast with Labour’s position seems stark.
Official income tax statistics from HMRC analysed by **i** show that the UK’s tiny fraction of ultra-high earners already pay a significant amount of tax – but that in theory at least, quite a bit more could be raised.
These figures reveal the UK has 25,000 people who earned more than £1m in 2021-22, the latest year for which figures are available, (22,000 of them were men). These people earned an average of more than £2.8m each, and together they paid more than £28bn in income tax. That’s significantly more than the £26.9bn in income tax raised from the 18 million taxpayers earning £30,000 a year or less**.**
Like fuck are they going to use it in the things we want…
The money will go to pad pockets and egos. Same as always
Are these £1m earners really that mobile? Most of them would have moved to the USA or low tax countries already. Most of them are in the executive merry-go-round of UK companies so I suspect you wouldn’t have too big a fall in tax receipts.
*Provided no one changed their behaviour as a result of the new tax rate…..*
That’s not how the world works though, is it?
Taking 45% of someone’s earnings is enough. After NI (both sides), VAT on purchases, excises, inheritance tax, council tax etc these people are contributing a lot already if they’re doing it by the book. Maybe instead of sticking it to those who are playing by the rules we could go after those who aren’t.
If France have a 90% top tax rate, we might see even more people arriving in boats
Yes let’s totally drive away all the high earners that support our economy and create jobs to more favorable tax jurisdictions. This is the fucking problem with people that have socialist tendencies – they see someone with wealth and success then plot ways to undo it for everyone. To me it’s like the kid that’s losing at football and so they grab their ball and go home.
Everyone loses because of one loser.
The frustrating thing about this is that those earning £1m will also more than likely possess the means to rearrange their finances to get around this.
Closing loopholes, or altering how we tax high earners needs to be a priority, otherwise the only realistic lever the government will have to actually raise tax revenue will be hitting middle earners who dont have an accountant on speed dial.
I’d rather spend 2.5bn on more deserving things such as more GP’s or nurses, rather than bailing out peoples third+ child. You could fund an extra 15,000 GP’s salaries with this amount of money.
Labours free breakfast clubs plan already provides additional sustenance and childcare which free’s parents up to work the extra hours to support their family choices.
I have several friends already considering leaving because of high taxes + getting very poor and overwhelmed public services in return, further tax increases will just push more people over the edge especially in a globalised world where it’s fairly easy for skilled labour to move around.
One doctor friend has gone to Canada already for a quadrupled salary, a coding friend is going for big tech jobs in America again to at least quadruple their salary (with much lower taxes too).
Why on earth should this end the child benefits cap?
If you can’t pay for them then don’t have them. There’s NO excuse for having more than 2 in this intance.
Put it towards things that will benefit the majority – not just the scroungers
“Provided no one changed their behaviour as a result of the new tax rate”
Whoever wrote this is either ignorant or in bad faith.
If you earn a salary > £1m there isn’t much you can do. But how many people earn that?
Didn’t Labour raise very little when it hiked the marginal tax rate from 45 to 50% about 15 years ago?
https://commonslibrary.parliament.uk/research-briefings/sn00249/
Wasn’t the reason that those who could postponed a big part of their income? Eg not taking dividends from their companies, not realising capital gains, etc?
Why has THIS of all things become this season’s morality barometer?
At some point politicians will have to admit we have a spending problem not a revenue problem, but I’m not banking on it happening before there is absolutely no other choice
Why do we only talk/ think about income tax?
What about all the tax loopholes that companies and individuals exploit?
Moving the deck chairs around on the Titanic, we are late stage capitalism and it’s only going up get worse.
Keep the cap. Can’t afford more kids, don’t make them.
There are an awful lot of temporarily embarassed millionaires in this thread…
UK lets you put up to £20,000 a year in tax free ISA. In Canada the equivalent tax free account only lets you put $6000 (£3400) a year. Maybe start there. Most people do not have 20K to put in tax free savings every year
Couldn’t we end the cap anyway? We are already running a ‘deficit’ and it’s only increasing. Plus, if there is worth in funding a child, why not more children? Or is it seriously proposed that the marginal utility of children decreases significantly after the second?
Excellent idea, anyone over £1m should defo pay more tax…
In order to give to someone who hasn’t earned it, you have to take it from someone who has.
Or how about we downsize the government, lower taxes across the board and that way people can keep the money they earn?
Why stop at 5%? A 10% income tax raise could pay for this and also something else /s
True
But they rarely model changes of behaviour in these rises
Eg. Scottish high earners paying tax in England instead when Scotland raised taxes
Is the government actually talking about this or is this completely made up by this newspaper?
This income tax is not unprecedented – we had a 50% income tax rate during the recession! All this talk of “they’ll run away to Mars and set up offshore accounts is flawed” is based on a small amount of real data extrapolated to oblivion.
Bring it on. If anything, income tax isn’t the primary way to tax these people.
Its going to be really easy for me to avoid this tax.
Better yourselves so you can pay for someone else’s kids
Do you know what else could end the child benefit cap? The current tax regime after a few years of **economic growth.**
Nice of the I to assume all of us want an end to the child benefit cap.
We should absolutely tax rich people more and we absolutely should stop supporting professional breeders.