Far be it for me to defend the so called “rich”, but I would like to make some pertinent points in relation to this governments’ decision to increase taxes on those earning over £100,000 and £150,000.

First if all, I am at a loss as to how anyone can describe someone that earns over £100,000 as ‘rich’, take a look at any of the newspapers that still have jobs advertised and you will see countless middle management jobs and sales positions which offer earnings of around £100k, including bonuses or commission. So, these are not all city bankers, many of them may be your next door neighbours, or perhaps your boss. These are people that have almost certainly earned their positions through merit, not spongers or low-lifes! Yet, when our members of parliament refer to them, it is as if they are the great unwashed. Yet many of these people are creating jobs for the rest of us, should they really be treated with such contempt and disdain?

When people stay on in further education, this is invariably because they want to maximise their chances of doing well in the workplace, because they want to aspire to be successful, in terms of position and earnings. Are those that are successful to be judged as one of the great unwashed if they succeed in earning over £100,000 per year? One of the things that I am always hearing is that those that earn more should pay more. I agree, but they already do, taxes are paid in cash terms, not percentages. Take an average person earning £25,000 per year, they will pay £5945 in tax and national insurance every year. They will also, most likely, be entitled to additional tax credits and other benefits which will further reduce their net contribution in taxes.

Now, lets take someone earning £113,000, this is the level at which the individual will lose all of his or her entitlement to a personal allowance. As a consequence, their net tax contribution will be £40,362 (rising to £43,304 from next year), which is between 6.8 and 7.3 times more tax that Mr and Mrs Average. Or to put is another way, in percentage terms, they will be paying twice as much as the average wage earner (38% instead of 17.7%). Yet, they will not be entitled to any tax credits or other benefits. It is also likely, that someone at this level will receive ‘private health insurance’. However, even though this reduces the burden on the state system, the individuals will actually be taxed on the cost of private health, as a ‘benefit in kind’. For anyone that things this is a perk, they need to be reminded that this ‘benefit’ is not provided because the employer is feeling benevolent, but because they need their employee back to work as quickly as possible.

It is all very well deriding those people that have achieved success in their careers, but it is also worth remembering that these same people provide the exchequor with the same amount of net tax as 7 people on average earnings. Yet, they do not get seven times more pension, nor do they get seen by their doctors seven times faster, instead they are actively and unfairly targeted for yet more money. They are not rich, they are successful, they are achievers and this country would be a much poorer place economically, commercially and intelectually if we did not have people like this. Take a look at what ‘brain drain’ has done to some African countries where their skilled people left in droves following a change of government, some have never recovered, do we really want that here?

I dislike envy, as much as I hate greed, both are destructive in their own way. In the USA, they have always heralded success, placed people that have achived on a pedestal, here, we invariably look on with contempt. The politics of envy assume that these people have got ‘rich’ at the expense of their employees, rather than accepting that they are more likely to have been directly or indirectly responsible for creating jobs and wealth. I remember one of my former bosses saying that he never had a problem paying out large commission cheques to sales people, because it meant they were generating business, profit and security for the company and its employees.

There is a very real risk that, by removing all personal allowances for those earning £113,000 or more and, increasing income tax to 50% for earnings in excess of £150,000, many successful people will look to take thier skills, trade, entrepreneurship and money elsewhere. There simply has to be a limit to what they will accept. If they do leave, how many jobs will be lost as a result of the skills shortage? White collar workers are no less skilled in their trade as, for example, an electrician, coach builder or car worker. Anyone who suggests otherwise is naive. If these successful people spend their money in other countries, how many jobs will be lost as a consequence of the comparitive downturn in sales?

I believe taxation must be fair and equitable. From a moral perspective, it is okay to say those that earn more, must pay more. But it is not acceptable to state that those that earn more must also be hit with a penal rate of tax as if they were not part of the human race. Remember, many are already contibuting in cash terms, more than 7 times as much as the average worker. This country is in a mess and we will all have to accept that public services will have to be cut and taxes will have to rise, but it is, in my opinion, fundamentally wrong to target one section of the workforce for special treatment in the form of penal tax rises. Especially when so many companies and genuinley rich people are still using loopholes to avoid paying income or corporation tax.

I know that my comments will annoy many who are struggling to pay their mortgages, it will also irritate some that believe people who have been successful in their careers are not deserving of higher salaries, but this country needs achievers and to keep them, we must reward them. With the exception of bankers and the public sector, I don’t know of any business that will pay more than an employee is worth, nor a company that would be prepared to keep someone on that was not delivering results. If they are paying their taxes, even if this is as much as seven times that contributed by the average worker and then spending the money in our country, why should so many people judge them so harshly. These people also have mortgages and commitments, the only difference is scale.

I do not earn over £100,000 per annum, but my sense of fairness is what motivated me to write this post, plus I suspected that those that do earn over £100k would be roundly condemned. I am unusually indifferent to those that disagree with me on this issue because I have seen first hand what happens when countries start to lose key skills in what has been dubbed a ‘brain drain’. The country, the economy and the people all suffer in equal measure.