Tel. +44 (0)20 7287 4414
Email. info@brugesgroup.com
Tel. +44 (0)20 7287 4414
Email. info@brugesgroup.com
The Bruges Group spearheaded the intellectual battle to win a vote to leave the European Union and, above all, against the emergence of a centralised EU state.
The Bruges Group spearheaded the intellectual battle to win a vote to leave the European Union and, above all, against the emergence of a centralised EU state.
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Bruges Group Blog

Spearheading the intellectual battle against the EU. And for new thinking in international affairs.

Burden of Taxation

tax-6596101_128_20240124-115756_1 Tax Disincentive

Why have the Conservatives increased the burden of taxation on individuals earning between £100,000-£150,000, whilst at the same time reducing the burden on those earning over £150,000? Is this, yet another example, of how Conservatives have become out of touch with their key supporters?

Under the last Labour Government taxable income between £100,000-£150,000 was taxed at an average rate of 42.2%. The Conservatives have increased this figure to 52.5% during their term in office. During the same period, the Conservatives have reduced the rate of tax on income over £150,000 from 50% to 45%. Jeremy Hunt recently reduced the threshold for paying 45% from £150,000 to £125,000.

The real story, which tends to be neglected, is how the Conservatives have cynically exploited the 60% stealth tax introduced by the last Labour Government. When this tax was introduced, the personal allowance was £6,475. The Labour Government reduced this allowance by £0.5 for every £1 earned over £100,000. This meant that income between £100,000- £112,950 was taxed at an effective rate of 60%. For every £1 earned between £100,000-£112,950, £1.5 was subject to tax at 40% - hence the effective tax rate of 60%. However, taxable income from £112,951-£150-000 was taxed at 40%.

During the Conservatives period in office the person allowance has increased to £12,570. By maintaining the Labour Government's stealth tax, income between £100,000-£125,140 is taxed at an effective rate of 60%. And now, as a consequence of the change made by Jeremy Hunt income between £112,951-£150,000 is taxed at 45%.

The Conservatives have made the tax system regressive in that the more you earn the lower the rate of tax. 


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Director : Robert Oulds
Tel: 020 7287 4414
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The Bruges Group
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KEY PERSONNEL
 
Founder President :
The Rt Hon. the Baroness Thatcher of Kesteven LG, OM, FRS 
Vice-President : The Rt Hon. the Lord Lamont of Lerwick,
Chairman: Barry Legg
Director : Robert Oulds MA, FRSA
Washington D.C. Representative : John O'Sullivan CBE
Founder Chairman : Lord Harris of High Cross
Head of Media: Jack Soames