Writing in the Independent, Nigel Farage provides detail on Ukip’s tax policies, which he says, go to the heart of Ukip beliefs that “power lies with the individual, not the state, and that we should free people from burdensome regulation and controls and allow them to achieve their full potential.” Mr Farage talks about the moral right to remove the lowest paid from income tax and the futility of taxing them only for the funds to be wasted on administration and tax credits. He goes on to say that middle earners such as teachers and nurses being dragged into the higher tax bracket are the victims of a “tax on enterprise and career ambition” and that Ukip would raise the threshold for the 40% rate of tax to £45,000. Mr Farage adds that tax cuts would provide a bigger boost the economy than government grants and redistribution.
Source: The Independent
In the excitement about nurses, teachers and other Worthies being taxed at the 40% rate, let no-one kid you that the basic rate of tax for employees is 20%. It’s 32%. How come? Because, in addition to “Income Tax”, PAYE also collects National Insurance Contributions (a tax in all but name) at the rate of 12% from “basic-rate” employees.
Oh, the top rate of tax isn’t 45% either. It’s 62%, on a £20,000 band of income £100,000. Lies, damned lies, statistics… and tax rates.