Super-rich face 50% tax - UK - News - The Independent

Super-rich face 50% tax

A NEW 50 per cent tax rate for those earning pounds 100,000 and more is being considered in Whitehall as Kenneth Clarke, the Chancellor, draws up plans for probable tax increases in his November Budget.

The possible new 'top people's' tax rate - as well as the imposition of 8 per cent VAT on private health care - is one of a range of ideas designed to symbolise the Government's willingness to ensure that the better-off bear their share of any increase in the tax burden.

One of the strongest complaints against rises in indirect tax - such as VAT and excise duty - are that they hit the poor hardest because they take a bigger proportional share of their disposable income.

An increase in top tax rates would affect far fewer people than the new 45 per cent band for all higher taxpayers suggested earlier this month by Keith Hampson, Tory MP for Leeds North-West, which would raise pounds 1.8bn.

However, although limited in revenue-raising terms, it would please 'one-nation' Tories and backbenchers who say they face complaints about the salaries paid to leading businessman, including the chairmen of privatised utilities.

Proposals for the imposition of VAT on private health charges have also circulated within the Treasury, although one senior member of the Government argued yesterday that it 'would mean a lot of aggravation for not much money': it would alienate many Tory supporters, not all of whom were rich. The private health insurance industry would also strongly oppose any such proposal on the grounds that health is exempted under EC regulations - although Italy imposes VAT on health care.

But the circulation of such plans is strong confirmation that Mr Clarke is considering further widening of the VAT base - charging it on newspapers and books being one possibility, which would raise about pounds 1bn. VAT on books would provoke immediate outrage as a 'tax on learning', but it could be offset by a simultaneous decision to outlaw the Net Book Agreement, which sets minimum prices.

The lively discussion in Whitehall about possible plans for new indirect taxes comes in the wake of the continued refusal of Michael Portillo, the Chief Secretary to the Treasury, to bow to pressure from fellow right-wingers on the Tory backbenches by ruling out tax increases in the Budget.

But one question that could yet face Mr Clarke will be whether to lift or abolish the ceiling on National Insurance contributions. Although this was discussed before Norman Lamont's March Budget, it was vetoed on the grounds that the Tories had condemned a similar Labour proposal in the general election as a 'tax on jobs'.

The conflict within Labour over economic policy resurfaced yesterday when Peter Mandelson, MP for Hartlepool, strongly attacked Peter Hain, secretary of the Tribune Group of MPs, for criticising the party leadership and advocating a return 'to the policies that failed in the early 1980s'.

News
John Travolta is a qualified airline captain and employed the pilot with his company, Alto
people'That was the lowest I’d ever felt'
Life and Style
healthIt isn’t greasy. It doesn’t smell. And moreover, it costs nothing
Arts and Entertainment
Emma Thompson and Bryn Terfel are bringing Sweeney Todd: The Demon Barber of Fleet Street to the London Coliseum
theatre

Returning to the stage after 20 years makes actress feel 'nauseous'

News
peopleThe Times of India said actress should treat it as a 'compliment'
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
News
news

Watch this commuter make a mad 320-metre, 75-step dash to work
Property
Home body: Badger stays safe indoors
lifeShould we feel guilty about keeping cats inside?
News
The programme sees four specialists creating what they believe are three perfect couples, based on scientific matchmaking. The couples will not meet until they walk down the aisle together
tvUK edition of wedding show forced to recast after wave of drop-outs
Arts and Entertainment
US pop diva Jennifer Lopez sang “Happy Birthday” to Gurbanguly Berdimuhamedow, president of Turkmenistan
musicCorporate gigs become key source of musicians' income
Arts and Entertainment
You've been framed: Henri Matisse's colourful cut-outs at Tate Modern
artWhat makes a smash-hit art show
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
filmsDaniel Craig believed to be donning skis as 007 for first time
Student
The Guildhall School of Music and Drama is to offer a BA degree in Performance and Creative Enterprise
student

Top conservatoire offers ‘groundbreaking’ arts degree

Sport
Mikel Arteta pictured during Borussia Dortmund vs Arsenal
champions league
Voices
Yes supporters gather outside the Usher Hall, which is hosting a Night for Scotland in Edinburgh
voicesBen Judah: Is there a third option for England and Scotland that keeps everyone happy?
Arts and Entertainment
Pulp-fiction lover: Jarvis Cocker
booksJarvis Cocker on Richard Brautigan
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Teaching Assistants

£50 - £85 per day: Randstad Education Preston: Rapidly developing and growing ...

Supply Teachers needed in Stowmarket

£1034496 - £1516224 per annum: Randstad Education Cambridge: The Job:Randstad ...

Primary Teacher EYFS, KS1 and KS2

£85 - £140 per day: Randstad Education Preston: Randstad Education are urgentl...

SEN Teaching Assistant Runcorn

£50 per day: Randstad Education Cheshire: SEN Teaching Assistant EBD , Septemb...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week