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Nick Clegg calls for wealthy to pay additional 'emergency tax'

John Fitzsimons on 29 August 2012 |

33 comments

Nick Clegg thinks the wealthiest should pay extra tax for a limited time. Is he right?

Nick Clegg calls for wealthy to pay additional 'emergency tax'

Nick Clegg, the Deputy Prime Minister, has suggested that for a limited period the wealthiest people in the country should pay extra tax.

Speaking to the Guardian, Clegg said a “time limited contribution” from the most well off was needed for the sake of fairness and to ensure we remain a “cohesive and prosperous” society.

He is quoted as saying: “If we are going to ask people for more sacrifices over a longer period of time, a longer period of belt tightening as a country, then we just have to make sure that people see it being done as fairly and as progressively as possible.”

Opponents have accused the Deputy Prime Minister of being a hypocrite as he voted in favour of cutting the top rate of tax from 50% to 45% for those earning more than £150,000 a year.

Is he right? Should the wealthiest pay more in tax? Cast your vote in our poll below.

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61

Chorlton1 said

Maybe if the goverment spent the taxes they received more wisely things might improve quicker instead of taxing the people who have done well in this country to prop up the able bodied people who have no intention of looking for a job.

Report on 29 August 2012 | Love 6 loves
22

Susanne said

Should the wealthiest pay an 'additional' tax?? How about taxing them in the first place? If you're paying tax in this country, you're making less than £100,000 a year. Guaranteed. I would love to see Simon Cowell or Elton John or billionaire bankers taxed at a higher rate than I am on my 5 figure a year-salary. It'll never happen. Supposedly letting all of those people spend their time in their private planes or yachts watching their toenails grow props up the economy, or something. I'd argue that it's our taxes doing that. I really don't see why anyone who is super-rich should be exempt.

Report on 29 August 2012 | Love 2 loves
13

tonygogo said

Maybe if the government also closed all the big ticket tax avoidance loopholes and collected what should be paid, they wouldn't need to think up unworkable stunts like this. Can anyone see MPs and their Lordships voting this one in?

Report on 29 August 2012 | Love 2 loves
12

JRTL said

Unfortunately there are not enough rich people to make a difference. It's always the middle class who really pay the lion's share. Very often (not always) the so called "rich" are innovators and wealth creators, we need to find a way to allow those people to keep more and take a fairer share from the over paid bankers etc.

Report on 29 August 2012 | Love 4 loves
67

r said

I agree with @Chorlton 1. Absolutely!
@Susanne: Most of these people do not make all of their money in the UK. I agree that those that do should pay tax. However, statistical studies have shown that when tax rises much above 40%, it starts to become self-defeating; it follows the law of diminishing returns. This is why the people you mention do not reside in the UK.
Another point of view is that tax is OUR money. Any government (or council) should not be able to tax indiscriminately. Tax is primarily intended for the benefit of the country so, if you look at Government expenditure figures, you will find that a massive amopunt of this tax is not spent on the benefit of the country nor on the country at all.
We have all been brainwashed into thinking that successive governments need more and more so that we get more and more benefits but that is not the case. Absolutely massive expenditures are made where, if the population had a vote on each, they would never, ever, be authorised. For example, the EU, aid to rich countries such as India and Pakistan, Arab wars, ID card computer systems, expenses, the list is endless.
Have a look at The Taxpayers Alliance website; I don't agree with everything they promote but they do give figures for Government and Councils wastage and excessive spending. Well worth a look if you want be better idea of where your money goes.
r.

Report on 29 August 2012 | Love 2 loves
66

Hardtruth said

More showboating, opportunistic, bandwagon cobblers from this empty suit that attempts to deflect from the real issues of importance and relevance. It will make stuff all difference to the bottom line even if they had the means and intellect to track down these extra pennies.

If he doesn't know this then it just proves what is patently obvious that he is unfit for purpose. If he does know it then it is yet another example of his mendacity and duplicity.

Report on 29 August 2012 | Love 2 loves
81

rbgos said

A tiny bit of research and information is a lot more useful than ill-informed diatribe.

http://news.bbc.co.uk/1/hi/8417205.stm (it's a couple of years out of date, but I doubt the picture has changed that much)

The top 10% of earners pay 53.3% of all the income tax the government receives. The top 1%, on their own, pay 24% of all income tax.

So, far from ranting that the rich don't pay their taxes, it could be argued that they're already paying more than their fair share. After all, they're paying 40% on most of their income while the rest of us pay 20%. They pay inheritance tax that most of us don't inherit enough to be liable for. Yes, of course, they have smart accountants who arrange their finances in such a way as to minimise tax - they're not idiots, which is why they're wealthy - and I would do the same. But to suggest they are not already paying a lot of tax is absurd.

And, yes, they do "prop up the economy", from investing in businesses which helps them grow, to buying Bentleys and thus keeping Bentley's employees in work.

Report on 29 August 2012 | Love 6 loves
9

elcadobes said

To do this would be virtually impossible and even if it were set up, it would require incredibly complex rules. The result would probably be costly and not a very large amount would be collected anyway compared to the total requirements.

Report on 29 August 2012 | Love 1 love
265

oldhenry said

A better idea would be to stop PFI schemes at once, and cut the interest rate on existing ones. That would save Clegg more millions than raising taxes. The answer to our woes is to cut spending, cannot the politicians think like normal people? I believe they cannot.
When we face increases in expenses we have to cut our spending, we cannot simply raise our income.
What a bunch of no-hopers are running the country.

Report on 29 August 2012 | Love 2 loves
9

Trevor D said

Good bit of research rbgos, What this means is another new tax will hit those who are honest & rich, but those who are dishonest will avoid it, just as they avoid other taxes. So it is possible that honest tax payers will simply up it and go, leaving us all worse off!

Report on 29 August 2012 | Love 2 loves
0

martian said

Just make sure you get 40% tax from them. They contribute little to the economy, they contribute to the $32 trillion in offshore accounts. Name and shame these tax avoiders and publish just how little of their disposable income they contribute to our economy. Anyone on minimum pay contributes it all (100%) to the economy, no savings, not so for the super rich. I don't think it would take much paper to print a list of the super rich who pay 40%.of their income, even less for those who spend it all in the UK. In the USA Mitt Romney is actually proud that he pays as much as 13%, most goes into offshore accounts. I doubt if UK is any better.

Report on 29 August 2012 | Love 0 loves
6

foz1145 said

Just make sure that those rich people who avoid paying tax pay their fair share, that way the honest rich people would not be penalized for the cheats.

Report on 29 August 2012 | Love 1 love
26

rpb said

@martian - that's the point exactly.
@rbgos - yes, thanks for looking that up and finding out the actual numbers, but the absolute amount of money is not really the relevant figure here. If all the super-wealthy - the top 1% (or even the 10%) were actually paying their tax at 40% (or 45%/50% - top rate whatever it is at the time) I don't think people would gripe. It's the fact that their effective tax rate is so much less because of creative accounting (a.k.a. fraud).
Someone earning, say, £50k will be paying 40% (top rate) tax on the top part of their earnings. Someone earning £60k pays 40% on the top part (hence pays £4k more than the previous person on £50k). And so on it goes. However, for the top 1% (or 10%) of the population this rule breaks down, and they start paying *less* than the top rate on their additional income.
So the total amount they pay in tax may seem high ("top 1% pay 24% of all income tax"), but that statistic is really just telling us how obscene the amount of money that top 1% makes, given that their effective tax rate is probably significantly less than that of the worker on £50k a year (or £30k a year, or whatever).
Surely if the rule for those on £50k, £60k, £70k, etc., is that 40% of additional income goes as tax, and if most consider this as fair and 'progressive', then those on £250k, £500k, £1m, £5m, £20m, ..., should pay that same rate, shouldn't they? And saying, "Look, we top 1% pay 24% of all income tax, even though that's only a 13% 'Mitt Romney' of our income" implies that it's OK for someone earning £60k a year to pay a lower percentage tax that someone on £50k per year. And I don't see how it is.

Report on 29 August 2012 | Love 2 loves
24

Spikus said

The Government need an emergency tax, yes. But this tax must be on the faceless corporations who make billions every year out of the UK but pay little or no tax in the UK.
I am talking about Google, Apple and all the others who get away with 'residing/trading' from outside the UK when they are clearly taking money FROM the UK.
Those who say it cannot be done need to look to NY. A threat of revoking Standard Charters license to operate immediately got an agreed massive settlement and there was no evidence of more than a few $million in due fines.
Corporations who trade here need to pay taxes here and not be allowed to use overseas tax havens to minimise tax. Threaten to ban Google et al and watch how fast they pay up fair taxes on the profits they make here.
We all have alternatives to their products, so the risk to us is minimal. These corps don't even pay fair taxes in the US!
This is both feasible and will bring in much more revenue than trying to tax a few wealthy people.

Report on 29 August 2012 | Love 1 love
599

Mike10613 said

I know rich people who have lost money on their stock market investments in the past few years. But these are people with a few millions not the super-rich with billions. The super-rich are the ones avoiding tax. If they pay all their taxes, how did they become billionaires? They become billionaires by tax avoidance, speculating and generally robbing people blind. The suggestion that everyone should work in factories making them new shiny new gas guzzling Bentley's and tug their forelocks upon leaving every day; is ludicrous.
Wake up, the super rich can sell a painting, a race horse or ask the wife to cut down a bit on Prada and Chanel if they run short. The Money Advice Service advertised on this page is not for them, it's for the brainwashed suckers in danger of losing their homes because economic mismanagement and corruption.

Report on 29 August 2012 | Love 1 love
3

stuarte said

1) Could anyone in their right mind ever trust any politician with a "temporary tax"? Wasn't Incomee Tax brought in as a temporary measure to pay for the Napoleonic Wars?
2) Dennis Healey (remember him?) promised to make the "pips squeak" - hospital porters ended up paying more tax!! (Well said JRTL)

Report on 29 August 2012 | Love 1 love
51

Ben Hall said

Suggestions like this tell me that the lunatics have taken over the asylum.

Report on 29 August 2012 | Love 2 loves
0

jackie smith said

If all the wealthy paid taxes on a moral basis rather than indulging in ways to avoid paying tax there would be no need to consider additional taxation

Report on 29 August 2012 | Love 0 loves
643

electricblue said

I don't see that the current 'no-hopers' running the country are anything but an improvement on the last lot of no-hopers. For dead end ideas and money wasting in the billions, good old John Prescott is a tough act to follow. Generating more wealth and cutting back on expenditure are really the only options. Daft ideas to grab tax here and there are just showboating. I'm sure we'll have someone suggest a 'window tax' next or how about bring it right up to date with a satellite dish tax?

Report on 29 August 2012 | Love 2 loves
643

electricblue said

@jackie smith
If morality were ever part of the equation how about the Catholic Church gave up all their billions in wealth? Lambast the billiionaires by all means, but you don't need to look too hard to see why the Vatican keeps eerily quiet on the matter of social inequality.

Report on 29 August 2012 | Love 1 love
19

mosicle said

Well done to Nick Clegg. Time the wealthy gave something back to the country. The Tax Office must know who these people are. they only have to look at their tax accounts to establish if the correct tax is in fact being paid.
They managed to allow a debt to build on my tax account of over £800, even though they had ALL the correct details. Suddenly they have contacted me and said THEY have overpaid me and are amending my repayments over the 3 years the total o/p amounts to between £10-12 can you believe that!!!
HMRC and the government really need to wake up and make the tax system fairer. If they collected the correct tax from everyone I am sure that the national debt would be greatly reduced.

Report on 29 August 2012 | Love 0 loves
2

nickodgers said

It is about time benefits were cut back, two kids maximum then no more handouts, if you cannot afford kids you do not have them. Some of the rich made it through hard work, why should they be penalised. And stop giving immigrants two million pound houses, this country has gone to the dogs.

Report on 29 August 2012 | Love 2 loves
46

Henry-GBG said

Emergency tax measures are always a bad idea, except in war time. They also have a habit of becoming permanent, however ill-considered they were in the first place. The Council Tax itself is an example of an ill-considered emergency tax measure.

The injustices and harm built into the tax system can only be dealt with by comprehensive reform going back to first principles. As long as the right measures are put in place a delay of a couple of years is worth the wait, especially as whatever is done could remain in force for decades.

Report on 29 August 2012 | Love 1 love
362

CuNNaXXa said

Taxation has increased a number of times over the last thirty years or so. VAT is applicable to more and more VAT free products and services, and has risen from 15% in the 80's to 20% now.
Of course, if you target companies like Tescos, who practice tax avoidance, they will probably make 1,000s redundant as a punishment for busybody MPs pushing their nose into private business.
So, if they collect all this additional tax, which country will they give this money to? Portugal? Ireland? Greece?
When in trouble, charity begins at home, unless you run the country, then charity begins elsewhere.

Report on 30 August 2012 | Love 1 love
41

Arblaster said

Nick Clegg, the Deputy Prime Minister, has suggested that for a limited period the wealthiest people in the country should pay extra tax.
"For a limited period". Income Tax was only to be introduced for a limited period , and look what happened.
The super rich provide jobs, even if they only invest money in venture capital projects. If one starts to treat them badly, they will either go Galt, or just up sticks and move elsewhere, leaving the UK with just a load of blanks. Unless you are one of the ones who thinks that it is the government that opens businesses and provide jobs, it is easy to see that having the best people leaving the country is going to be a disaster.

Report on 30 August 2012 | Love 1 love
643

electricblue said

Oh dear - yet another person forgetting the original 8% and 25% VAT rates under a Labour government. 25% tax on luxury items actually made some sense, though doubtless those mindful of all those on benefits watching their plasma screens will trot out that old line about 'hitting the poor hardest'.

Report on 30 August 2012 | Love 1 love
159

majortruth said

No need for such a tax. All we need to do is repeal the Climate Change Act and the country immediately saves £732 billion over the next forty years on subsidising the rich to install solar and wind farm extravagances that fail to answer the non-probelm of ever-changing climate.

Report on 30 August 2012 | Love 8 loves
73

cleogen_blue2 said

Agree with the Major but what about the cost of local and central government employing climate change "warlocks and witches" at huge cost to tell us all how to live and then produce worthless renewable energy "plans" to cost us even more money.

Repealing the CCA would enable these paid doomsayers to be fired.

Getting rid of overpaying cyclists for Council business miles at more than a motor cycle and nearly as much as a car would also save some money. Time to remember Playing at Green Costs Money.

Report on 30 August 2012 | Love 5 loves
132

yocoxy said

Isn't it obvious to all that Nick Clegg is creating a storm in a teacup to appease his sandal-wearing beardies at the party conference next month?
This is never going to happen and nor should it. There is still much work to do to rein in the extravagances of the Labour Government that spent our money like it was water from a bottomless well. That's the way to balance the books. Make it less comfortable for the workshy to choose a life on benefits.
Living in poverty? With a smartphone, cable TV and car? Ridiculous.
When I was a kid, poverty meant no phone at all, no car, no fridge and weekly trips to the launderette because we had no washing machine.
"I can't afford food" (after I've paid 7 quid a day for a packet of cigarettes, 40 quid a month for my cable package and 25 on my phone contract).

Report on 30 August 2012 | Love 1 love
67

r said

Mmmm! Lots of truths on here. Has anyone mentioned that it maybe the law that needs changing? If these "rich people" and corporations don't pay the tax that everyone is getting upset about, either:

1. They are breaking the law and we have the means to deal with that; or

2. They are not breaking the law, so it needs changing.

No-one has really taken up my earlier point that successive governments are just not living within our means.

@yocoxy: love the last sentence. Too true. Same can be said of governments as well - substitute NHS/Schools/Roads for food, EU for cigarettes, Arab wars for the cable package, uncontrolled immigration costs for the phone package etc etc.

r.

Report on 30 August 2012 | Love 0 loves
362

CuNNaXXa said

@ electricblue

Oh dear - yet another person forgetting the original 8% and 25% VAT rates under a Labour government.

I can barely remember pre-decimal currency, and there will be those here who don't even remember when VAT was at 15%, or the original reason why they raised it to 17.5% (to pay for the Community Charge shortfall).

Taxation goes up, and vary rarely goes down. The more we pay, the more they want.

If VAT went up to 22.5%, someone would be considering the implications connected with raising it to 25%.

MIRAS. Remember that? Gordon Brown dissolved that because he said it was a middle class perk. Does he mean that anyone who even hopes to own their own home is middle class? Surely not? I thought middle class were doctors and bank managers and other considered professions. The rest of us are working class.

In fact, why did Gordon Brown even need to bring class in to the discussion. Unlike years gone by, I can talk at ease with my bank manager, doctor or local MP, and don't consider them any different from myself. We live in a society where class has almost disappeared. Whether they be a miner, or a graduate engineer, a drink with your mates is still a drink with your mates, and no one takes any notice of our backgrounds any more.

Taxation is supposed to be a method of funding vital services, yet all too often that money gets syphoned off for other causes. I don't mind bailing out other countries if our own is OK, but why pay for someone elses bad management when our own management is cocking up.

If I remember correctly, we have bailed out Ireland, Portugal and Greece, yet all this means is our tax burden is now higher. It is like saying to some guy with six kids, 'If you don't speak a foreign language, you ain't getting accommodation'. Charity begins at home, then spreads outwards, not the other way around. We should not be helping others while allowing our own indigenous population to suffer.

If this recession is THAT bad, we should be pulling in the communal purse strings, not spending more, then demanding more.

So, government, get a reality check.

Report on 02 September 2012 | Love 1 love
31

mrs weatherley said

Defence of the realm is the primary function of government...this ought to mean economically as well as in any military capacity....poverty brings with it unrest and disease...let other realms take care of themselves. People can donate to charity if they wish but it is not the remit of government to tax us to support outsiders...here or in their own lands.
Odd how this government is so scathing about welfare dependency of its own people when we have wasted billions creating dependents abroad and we haven't changed much for them in real terms only interfered.
We cannot afford any wars at all nor are they in our best interests..bring those soldiers home for border controls. We need to be creating a self sufficient UK not dabbling in other countries.

Report on 05 September 2012 | Love 2 loves
57

edwardmk2879 said

Nick Clegg is the consummate opportunist. Soundbites for his followers. In fairness to him, he got one thing right, which was to push for a big increase in the personal allowance for working men and women. He is a determined EU supporter, despite the obvious disaster area it's turning into. I suppose he needs the cash to send it to the EU to meet their demand for an inflation adjusted pay rise. "We can't get agreement to reduce our contribution because 17 nations will vote against us cutting back".
Might that be because those seventeen nations want our cash? Grow a backbone, cut payments to the EU, and you won't need to raise taxes (temporarily my a"**!)

Report on 04 November 2012 | Love 0 loves

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