Middle-class families are paying a 73% top tax rate and losing on average £1,300 a year
Under a pure flat tax everyone would pay the same rate
Experts say middle-class families are effectively paying more than someone on £150,000 might pay
Families where one or two partners earn £50,000 to £60,000 have lost all or most of their child benefit
By GERRI PEEVPUBLISHED: 00:28 GMT, 7 October 2013 | UPDATED: 00:32 GMT, 7 October 2013
Britain should introduce a ‘flat tax’ system to stop middle-class families from paying punitive rates, a leading business representative said yesterday.
The withdrawal of child benefit means that a single earner paid between £50,000 and £60,000 in a family with four children is hit with a ‘marginal tax rate’ of 73 per cent, according to experts.
This top rate of tax is worked out by treating the loss of child benefit as though it was a tax. Affected families have lost an average of £1,300 per year.
The withdrawal of child benefit means that a single earner paid between £50,000 and £60,000 in a family with four children is hit with a ¿marginal tax rate¿ of 73 per cent
Simon Walker, director general of the Institute of Directors, said that high marginal tax rates ‘degrade the motivation to work’ for many.
‘This is a huge disincentive as it is for beneficiaries on the lowest wages – some of them can be paying 70 per cent, 75 per cent,’ he told the Murnaghan Show on Sky News.
‘I would like to see that there is a level above which the tax take should never rise, so you should never pay more than 50p on the pound you bring in.
Read more: http://www.dailymail.co.uk/news/article-2447873/Middle-class-families-paying-73-tax-rate-losing-average-1-300-year.html#ixzz2h5Y9Mi1t
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