Tag: Rich

Would you want to give away more than 50% of you earnings to the tax man?

Would you be happy to give away more than half your salary in Tax? No…of course not, no matter how much you earn!

I find it amazing that politicians and the media continue to mislead people in the UK about how much tax richer people pay. Even if there was not a tiered tax scale a percentage of salary…means you pay more tax the higher your salary. Simple!?

However, as the UK has ever increasing tax bands, people who get paid more…get taxed even more!! These pie  charts (thanks to http://www.thesalarycalculator.co.uk) illustrate this.

Remember, this is just the tax we all pay before spending our money on VAT ‘able item. Which will add another 20% tax. As wealthier people generally spend a greater percentage of their earnings on VAT ‘able luxury items, (i.e. basic groceries and non-VAT ‘able items are a smaller fraction of their spending than less well off people) again the percentage of salary paid in VAT is greater.

Put simple anyone earning over about £100,000 is looking at forking out half their earnings in Income Tax, NI and VAT!! No wonder people try so hard to find ways to get out of this.

Not to forget all the other taxes, such as alcohol (~48p per pint of beer), petrol (~58p per litre), insurance premiums (between 4% and 20%…yes you get taxed when you insure your car or dishwasher!!!) etc..

Low Salary

Total Taxes: 8.5% of salary

UK average Salary

Total Taxes: 21.4% of salary

Member of Parliament Salary

Total Taxes: 31.5% of salary

Prime Ministers Salary

Total Taxes: 39.6% of salary

Seriously Rich Guy

Total Taxes: 44.8% of salary

RBS Chief Exec

Total Taxes: 46.5% of salary

Footballer salary

Total Taxes: 48.8% of salary