B
y the end of the decade 1.7 million of us will be earning more than £125,140. Great news on the face of it but in reality it’s much better news for the chancellor than it is for us.
Put your tiny violins away for a minute, for this surge in earners paying the top rate (45p in the pound) of income tax is simply illustrative of a much wider and insidious political tax trick. And it’s one that Rachel Reeves will surely soon deploy in her budget.
When Alistair Darling introduced the additional rate in 2010, about 236,000 people paid it — fewer than the population of Wigan. It was truly a tax for the country’s very wealthiest. Yet now it is becoming a problem for the middle class to contend with.
It shows us just how a tax grab that starts life as a raid on the very richest can be used to tax those with much more modest incomes within a few years.
