rate taxpayers do not benefit from this increase in the personal allowance. The exact figure will be confirmed when the September’s Retail Prices Index is known.
NATIONAL INSURANCE CONTRIBUTIONS
• The planned increases in national insurance will go ahead, so the rate for employees will increase to 12% and the rate for employers will increase to 13.8% from April 2011.
• The national insurance upper earnings limit/profit limit will be reduced to keep it in line with the income tax higher rate threshold.
• The threshold at which employers start to pay Class 1 NIC’s will be increased by an extra £21 per week above indexation.
• New businesses which start up during a three year qualifying period in specific targeted areas (Scotland, Wales, Northern Ireland, the North East, Yorkshire and the Humber, the East Midlands, the West Midlands and the South West) will not have to pay the first £5,000 of Class 1 employer’s NIC’s due in the first twelve months of employment. This will apply for each of the first 10 employees hired in the first year of business. This scheme is intended to start from September 2010 and will benefit any new business set up from 22 June 2010.
CAPITAL GAINS TAX
From 23 June 2010, there will be two main rates of capital gains tax – 18% and 28%. The rate paid will depend on the individual’s total taxable income – the 28% rate will apply where total taxable and gains exceed the basic rate tax band (£37,400 for 2010/11).
Gains qualifying for entrepreneurs relief will continue to be taxed at 10%, and the lifetime limit of gains qualifying for entrepreneurs relief will be raised from £2 million to £5 million.
These new rates will have affect from 23 June 2010. Gains arising in 2010/11, but before 23 June 2010 will continue to be liable to CGT at 18% and will not be taken in to account in determining the rate at which gains of indivuduals arising on or after 23 June 2010 should be charged.
The annual exempt amount will remain at £10,100 for 2010/11.
• The full rate of corporation tax for Financial Year 2011,commencing 1 April 2011 be cut to 27%. Further cuts are expected for future years as follows – 26% in 2012/13, 25% in 2013/14 and 24% in 2014/15.
• The small company rate for the Financial Year 2011, commencing 1 April 2011 will be reduced to 20%
• The Annual Investment Allowance will be reduced from the current level of £100,000 to £25,000 from April 2012. Capital expenditure above this level will be eligible for capital allowances at the standard writing down allowance.
• Writing down allowances for new and unrelieved expenditure on plant and machinery will be reduced from 20% to 18% for expenditure in the main rate pool and from 10% to 8% for expenditure in the special rate pool. These changes will take effect from 1 April 2012 for corporation tax and 6 April 2012 for income tax.
• The standard rate of VAT will increase to 20% from 4 January 2011.
• Zero rated supplies and supplies subject to VAT at the 5% reduced rate are not affected by this change.
• There are no changes to the Cash Accounting or Annual Accounting Schemes, but the rates used under the Flat Rate Scheme will also change to reflect this increase, with affect from 4 January 2011.
• Anti-forestalling legislation will be introduced as a result of this measure.
• There is the possibility that pensions tax relief will be restricted from 6 April 2011. This is in consultation but it has been suggested that the annual allowance may be in the region of £30,000 to £45,000.
• State pension is to be relinked to earnings from April 2011 and basic state pension will increase every year by the highest of earnings, inflation or 2.5%
• The government will accelerate the increase in state pension age to 66
TAX CREDITS AND CHILD BENEFIT
• From April 2011, tax credits for families with income over £40,000 will be reduced. Further changes will be made in 2012-13.
• Child benefits will be frozen for the next 3 years.
CHILD TRUST FUNDS
• The Government announced on 24 May 2010 that it intends to reduce and then stop all contributions to Child Trust Funds. They intend to reduce government contributions at birth and to stop contributions at age 7 from August 2010. They also intend to stop HMRC from issuing Child Trust Fund vouchers from 1 January 2011.
FURNISHED HOLIDAY LET
The furnished holiday lettings rules, which were due to be withdrawn from 6 April 2010, will now not be withdrawn.
The current rules which mean that the current FHL rules are applied to UK taxpayers with qualified holiday lettings situated elsewhere in the EEA will continue to apply for the 2010/11 tax year.
The Government then plans to change the treatment of furnished holiday lettings from April 2011 and will be looking at a proposal that would:
• Ensure the FHL rules apply equally to properties in the EEA
• Increase the number of days that qualifying properties have to be available for, and actually let, as a commercial holiday letting, and
• Change the way in which FHL loss relief is given
• A levy based on the banks’ balance sheet will be introduced from 1 January 2011, to encourage banks to move to less risky funding profiles…
fect match for Peter’s talents. So, I placed a call to the vice president.
The VP agreed that my candidate was indeed perfect, and could immediately help his company grow. However, there was a catch: Under no circumstances would they pay a recruiter’s fee.
“So, you see no value whatsoever in working with a recruiter,” I said.
“You got it,” he said, cutting me off. “We get 50 resumes a week from posting on Craigslist. So, if your candidate really wants to work for our company, I’m sure he’ll find us.”
“Sorry I wasted your time,” I told the VP. I could tell from his tone of voice that any attempt to convince him otherwise was a waste of my time as well.
Things Get ComplicatedJust as the VP predicted, Peter eventually found the company online, and after an exchange of emails, the VP flew him out to interview. Not once, but twice.
Soon after the second interview, Peter received an email from the VP, and it had the look and feel of an offer—almost. “We’d like you to come to work for us,” The VP wrote. “All we need to do is find out what sort of salary you’re looking for.”
I know all about the email, because Peter had forwarded it to me and asked for advice.
Now, I’m not one to hold a grudge; nor am I about to keep two interested parties apart, especially in light of the fact that the candidate was unemployed. So I advised the candidate to strongly state his interest and request a formal offer, with the understanding that if the offer was reasonable, he would accept the offer and set a start date.
But instead of taking my advice, the candidate took a detour, which proved fateful. In the email message to Peter, the VP went on to say that their salary range was $100k to $150k. Since Peter’s last job had paid $100k, he figured there was some room to negotiate.
So Peter emailed the VP that he needed more money to: [a] compensate for the higher cost of living where the job was located; [b] bring his salary up to “market” value, according to an online survey; and [c] provide him with a 6-percent increase to adjust for inflation during the two years he’d been unemployed.
Want to guess how the VP reacted? He pulled the offer.
I don’t blame the VP for being put off. But instead of saying, “Whoa, can we talk about it?” he took the sleazy way out. He wrote back that after careful consideration, his company actually didn’t have an appropriate position at this time. Which, of course, was a total lie.
Maybe Next TimeHad I been in a position to broker the deal, I’m certain the outcome would have been very different. Ambiguities, concerns and expectations would have been dealt with confidentially, and a smooth and orderly consensus would have been reached. Instead, Peter and the VP communicated in the manner or two dry sponges rubbing against each other; and as a result, our little drama morphed into a triple tragedy.
First, a talented and deserving candidate still has a family to feed and a creative mind that’s going to waste. True, he overplayed his hand. But that was more a reflection of inexperience than greed or malicious intent.
Second, a perfectly good company that could have reaped untold financial benefit by expanding its capacity is still turning away business.
And third, the VP who regarded my services as worthless not only let his penny wisdom and pound foolishness cost his company ten times the money he would have paid me; he also stuck a sharp stick in the eye of our country’s economic recovery.
So, the next time a company tells you they can’t afford a recruiter, you may or may not win the war of ideas. But at least you can state your point of view—that in fact, they can’t afford NOT to use you—with utter and total conviction. …
Inequality in America is getting worse.
The gap between the "haves" and "have nots" is widening, according to the latest data out this week.
The rich are money-making machines. Today, the top mega wealthy -- the top 1% -- earn an average of $1.3 million a year. It's more than three times as much as the 1980s, when the rich "only" made $428,000, on average, according to economists Thomas Piketty, Emmanuel Saez and Gabriel Zucman.
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Meanwhile, the bottom 50% of the American population earned an average of $16,000 in pre-tax income in 1980. That hasn't changed in over three decades.
As if that's not depressing enough, living the American Dream is also getting harder to do.
Millennials, born in the 1980s, only have a 50% likelihood -- a coin toss chance -- of earning more money than their parents did, according to new research released this month from the Equality of Opportunity Project.
It wasn't always this way. In the 1940s, almost everyone in America grew up to be better off financially than their parents. While money isn't the only definition of success, more wealth typically leads to bigger houses, grander vacations, fancier cars and more opportunities to advance.
"Children's prospects of achieving the 'American Dream' of earning more than their parents have fallen from 90% to 50% over the past half century," the researchers wrote in their report.
Related: Trump's new plan to save jobs
Wealthy taking a bigger piece of 'pie'
The wealthy didn't always take such a big share of the proverbial "pie." In the 1970s, a decade generally seen as fairly prosperous, the top 1% of Americans earned just over 10% of all U.S. income (i.e. the "pie").
Over time, the rich became more lucky -- or more greedy. Today the top 1% take home more than 20% of all U.S. income.
As the wealthy earned more, someone else in America had to get less. The bottom 50% went from capturing over 20% of national income for much of the 1970s to earning barely 12% today.
The turning point started around 1980, as seen in the graph below. By the mid-1990s, the fortunes of the top 1% were clearly on the rise and those of the bottom half were declining rapidly.
Related: Elizabeth Warren watchdog under siege
Wages aren't going up for bottom 50%
The Great Recession hit everyone hard. While job losses hit the bottom half, the tanking of the stock market and the sharp drop-off in home and property values caused the wealth of the top 1% to also fall dramatically.
Around 2009 and 2010, inequality narrowed slightly because the rich had lost a lot of wealth.
But since then, inequality has grown and is on track to widen further. The wealthy have recovered far faster as the stock market has surged over 230% since bottoming out in March 2009 and property values have shot back up to pre-recession levels.
In the meantime, wages for the bottom aren't moving.
The U.S. tax system is supposed to help the poor. Yet even after-tax income shows that the bottom 50% averaged just $25,000 a person in 2014, according to the latest data. That's just a touch above the $20,000 someone in the bottom half earned way back in 1974 (after adjusting for inflation).
"Income has boomed at the top: in 1980, top 1% adults earned on average 27 times more than bottom 50% adults, while they earn 81 times more today," write Piketty, Saez and Zucman.
Even if one assumes that the CBO's projections for employment loss are correct, the report indicates that the benefits of a $10.10 minimum wage outweigh the costs. The hike would lift about 900,000 people out of poverty, the budget office estimates. In addition, a minimum wage hike would directly benefit 16.5 million workers by giving them a raise, the report found.
Thu Feb 20, 2014 at 10:55 AM PST
This is the net benefit of a higher minimum wage - Yet another CBO report misreported
Many economists are flabbergasted because all the best scholarship on minimum wage shows it does not cost jobs. The CBO provided absolutely no new analysis to refute that.
The reality is that the CBO report is overwhelmingly positive on the impacts of raising the minimum wage. 25 million Americans would receive more pay. This will lift almost a million Americans out of poverty. In an attempt at balance which false equivalences tend to skew, the CBO thought that crediting a debunked myth of potential job losses would make it seem more balanced.
This morning there was a very good discussion on the minimum wage on MSNBC with Demos’ Bob Herbert. He had two very important statements about the minimum wage and job losses that should be heeded.
“I have been hearing this all of my adult life,” Bob Herbert said. “Every time they have raised the minimum wage, nothing catastrophic has happened. That has never occurred. And not only that, we tend to forget that the minimum wage use to be worth, it actually was higher because it use to worth more than it is now. It’s been eroded by inflation. … There is plenty of room for the minimum wage to be raised in this country.”
Near the end he made the most important statement.
“It seems to me that if you can’t afford to pay your workers a reasonable wage,” Bob Herbert said. “You can’t afford to be in business. How is a wage any different for example like your overhead, your rent, than what you have to pay for supplies, and that sort of thing? The idea that workers should subsidize the profits of corporations I think is just silly. Pay workers a reasonable wage.”
Here are some noteworthy facts relative to the minimum wage.
The CBO report confirmed that increasing the federal minimum wage to $10.10 will help 900,000 people get out of poverty.
The ratio of CEO-to-worker pay has increased 1,000% since 1950.
The CBO report confirmed that increasing the federal minimum wage to $10.10/hr will mean a raise for nearly 25 million working people.
600 economists, including seven Nobel laureates, signed a letter stating that ‘increases in the minimum wage have had little or no negative effect on the employment of minimum wage workers.’
Most states that have raised their minimum wage when lots of people were out of work have seen employment increase, not decrease.
A business with a business model incapable of paying a livable minimum wage is not a real business. A business who refuses to pay less than a livable minimum wage is at best a wealth transfer agent from the have-nots to the haves. Many businesses that pay a substandard minimum wage are really being subsidized by the taxpayers as their employees must seek welfare.
A couple of other points;
1) Would YOU be willing to live/support a family through working 40 Hr/week on a minimum wage job without anything else?
2) Do you think it is right that any American should work FT and live in poverty?
3) Advancing one's education is very often a good idea. How's the family going to be supported during that time someone is working on a FT poverty-level minimum wage job and going to school? Who'll take care of the kids? Will it be you?
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