Table updated April 2010.
Here's the table included in my earlier post, which I have now expanded to include the total marginal tax/benefit withdrawal rates faced by basic rate taxpayers who are entitled to Working Tax Credits and hence face the first and second withdrawal rates (i.e. withdrawal rates above and beyond 'normal' tax rates):
I have highlighted the rates for basic rate employees entitled to Working Tax Credits, because it is useful to bear these in mind when looking at the employment rates of married/cohabiting mothers with an employed partner; as against the employment rates of single mothers (to be covered in a subsequent post). This in turn shows the impact of high tax/benefit withdrawal rates on employment levels and helps us sketch out the Laffer Curve.
Dark thoughts
2 hours ago
2 comments:
As you know, Mr W, I am a blithering idiot. To prove it I must tell you that I do not understand the table. What has VAT got to do with anything? Please help, I wish to minimise my blitheringness.
TFB, politicians tell people that VAT is a tax on 'consumption'. This is a Big Fat Lie. VAT is a tax on production. It's a crude form of income or profits tax.
Ergo, for every £100 gross income that a VAT-able business has, the absolute maximum amount it can pay out as net salary to an employee is reduced accordingly. I did the workings in the earlier post.
Post a Comment