Who Are the Squeezed Middle in Income - Why Are They Taxed to Death by Wealthy MPs

WHO ARE THE SQUEEZED MIDDLE?

The squeezed middle are 4.4 million taxpayers earning between £40,000 and £60,000 a year, caught up into the 40 per cent tax band (next to top rate of tax in UK).

And this could rise to over 5 or even 6 million up til the general election in 2015.

This squeezed middle includes: 

• teachers, 
• nurses, 
• bricklayers, 
• police officers, and 
• Tube drivers 

making up now around 15 per cent of taxpayers, when in 2009 it was just 10 per cent.

Not exactly who you think of as the rich.

The 20 per cent tax rate between basic allowance before tax (£10,000 or £10,500 after this budget on March 19?) and the threshold of the 40 per cent tax rate, is actually 32 per cent, when add in the 12 per cent National Insurance.

Then from around £40,000 you have a 42 per cent tax rate, made up of the 40 per cent near top rate of Income tax plus 2 per cent National Insurance.

Did you notice that the poorest workers pay the most National Insurance, yet lose or never gain benefits by any excuse for sanctions or denial altogether in the first place, and are denied survival money of state pension at 60, when half of women aged 60-66 years are within the working poor?

Interesting that, isnit' it?

Then at this higher 'squeezed middle' you get a 73 per cent tax rate.

Why?

Because Child Benefit has been withdrawn, which lost £1.26 billion from women.

Most women never reach the dizzy heights of £150,000 a year in salary, so the cut from 50p to 45p has mostly gone to men.

For those who get above the squeezed middle, by how much a couple earn between them, then their tax rate is already above 50 per cent, going up to 62 per cent, as they lose the basic tax allowance of the first £10,000 (or £10,500 dependent on the budget on March 19).

In the Panorama programme about Food Banks rise being mostly from people in work, entitled the Rise of the Working Poor, the squeezed middle were interviewed showing them scrimping to buy cheap food despite both of the couple being in work. 

PENSIONER BASHING EVEN IN THE SQUEEZED MIDDLE

Whichever you look at this complicated and ever changing scenario, pensioner bashing is a trend in all of our political class, who have a safe public sector pension, topped up by the taxpayer, and living an elite privileged lifestyle paid for by all taxpayers.

Finance boffins tell us that the annuities a pension pot buys has crashed in value over recent years, so that a 65 year old with a £100,000 pension pot would have got £6,930 pension income in 2009 but today would only get £5,877 because of ever falling annuity rates.

This is small little income indeed for so-called rich pensioners in the squeezed middle, so Labour's assertion does not add up.

The state pension is around £6,300 and could rise to around £7,500 by 2015, but over a third of a million women have lost payout from 2013 at 60 and millions will end up with no state pension at all. 

Including housewives, widows, divorcees and women aged 80 and above.

Click here See Who Loses Most or All State Pension

If a couple's income starts to rise between them over £100,000, then they can end up keeping as little as 38 per cent in each pound earned over £100,000.

So here comes a trap. If, say, you earned £108,000 and put £8,000 into a private pension you avoided the 62 per cent tax rate.

This is what will be lost by the cut in tax relief on contributions into private pensions, which are earning less and less each year by the crashing value of annuities.

In amongst the squeezed middle are housewives in their 50s, without a NI credit history of their own (or less than 10 years), who with the Flat Rate Pension will lose as new claimants the 60 per cent of their husband's state pension and will not be able to inherit the state pension, and indeed even his works pension in the future.

HOPE MY OTHER BLOG HELPS YOU WITH SOME USEFUL RESOURCES FOR YOU

Blog post hope helps better budgetting to keep more of your dosh for enjoying a life a bit 

An Affordable Life - Ways to Budget

A cheap day out for two - picnic bag - can top up each time get a chance of warm sunshine for a taking the old car or even your cycles out into the countryside and keep fit while you enjoy a ride out.

A nice treat of sweets from the old days, to try or you might even remember a few. Enjoy!

WHAT WOULD THE SWANS DO DIFFERENTLY?

- All contributions into private pensions would be tax free.

- State Pension payout for women at 60.

- Basic Tax Allowance of £14,000 (£15,500 from 60 for men and women).

- Higher threshold before 40 per cent top rate of tax.

- Top rate of tax 40 per cent.

- Free Childcare within the Education Budget.

- The £1,000 transferrable tax allowance for 4 million married couples in 2015 will give a £411 million handout to men (84 per cent) with only £84 million to women (16 per cent). In The Swans, this money would go into the wife's separate bank account.

- Child Benefit removal from higher taxpayers has cut money to 94% of women claimants and only effected 6% of men. The Swans would grant a 35 per cent tax rate to women to cover the loss of child benefit. 

- The Swans would work towards End of Income Tax and National Insurance in first parliament.

- Rise amount of Indirect Taxes and VAT on the sales taxes on luxury goods, as the rich are not so price sensitive.


The Swans are for all incomes in society, leaving none to starve, paying off the deficit in real terms about the real debt by practical ways, and doing it without soaking the bulk of those in work.
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