In the last few months we may have given the impression that someone earning \u00a350k, with three children under 18, faced a marginal tax rate of 68%. We may have suggested that this was a disincentive to work, contributed to a shortage of key workers and even held back economic growth. We may have used words like “indefensible” and “disgrace”.<\/p>\n\n\n\n

We now realise that our analysis failed to take into account the uprating of child benefit, and in fact the marginal rate in this scenario will be 71%, not 68%. A graduate in this position repaying a student loan can face a marginal rate of 80%.<\/p>\n\n\n\n

We also wrongly suggested that someone earning \u00a350k and with six children under 18 faced a marginal rate of 90%. The correct marginal rate is 96%.<\/p>\n\n\n\n

We can only apologise for what is an unacceptable error, and would like to make clear for the record that a marginal rate of 71%, 80% or 96% is absolutely fine, and the effect on the individuals involved and the economy as a whole is completely unimportant.<\/p>\n\n\n\n

The corrected chart showing the child benefit withdrawal\/CBHIC effect:<\/p>\n\n\n\n

<\/figure>\n\n\n\n

And including student loan repayments:<\/p>\n\n\n\n

<\/figure>\n\n\n\n

The spreadsheet model is available here<\/a>. Note these figures are for the UK excluding Scotland. The Scottish rates are higher.<\/p>\n","protected":false},"excerpt":{"rendered":"

In the last few months we may have given the impression that someone earning \u00a350k, with three children under 18, faced a marginal tax rate of 68%. We may have suggested that this was a disincentive to work, contributed to a shortage of key workers and even held back economic growth. We may have used […]<\/p>\n","protected":false},"author":1,"featured_media":12504,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[88],"tags":[208],"jetpack_featured_media_url":"https:\/\/heacham.neidles.com\/wp-content\/uploads\/2023\/11\/Screenshot-2023-11-20-at-11.29.31.png","_links":{"self":[{"href":"https:\/\/heacham.neidles.com\/wp-json\/wp\/v2\/posts\/12500"}],"collection":[{"href":"https:\/\/heacham.neidles.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/heacham.neidles.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/heacham.neidles.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/heacham.neidles.com\/wp-json\/wp\/v2\/comments?post=12500"}],"version-history":[{"count":5,"href":"https:\/\/heacham.neidles.com\/wp-json\/wp\/v2\/posts\/12500\/revisions"}],"predecessor-version":[{"id":12517,"href":"https:\/\/heacham.neidles.com\/wp-json\/wp\/v2\/posts\/12500\/revisions\/12517"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/heacham.neidles.com\/wp-json\/wp\/v2\/media\/12504"}],"wp:attachment":[{"href":"https:\/\/heacham.neidles.com\/wp-json\/wp\/v2\/media?parent=12500"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/heacham.neidles.com\/wp-json\/wp\/v2\/categories?post=12500"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/heacham.neidles.com\/wp-json\/wp\/v2\/tags?post=12500"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}