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Last Updated: Tuesday, 16 March, 2004, 21:33 GMT
Higher rate taxpayer speaks out
Taking a stagnating company and turning it around has been Dr Neville Prior's job for several years. But he is worried about the increasing part of his income that is subject to higher rate tax.

Dr Neville Prior
Neville Prior wants entrepreneurs to pay less tax

He's the Chief Executive of Cornelius Group, a chemical distribution company based in Bishops Stortford in Hertfordshire.

And an executive post means an executive salary.

But despite his professional success, he's not happy with all of his rewards.

Neville doesn't want to have to pay the higher rate of tax that the Treasury demands.

"People in my position are the wealth creators, we provide jobs. The tax regime of this country is not really motivating people like me to continue doing that," he told BBC News Online.

Although he understands and agrees with the need to fund general services from taxation, he believes that relying on high earners to hand over a larger slice of their salary is a big mistake for the UK.

Higher rate tax goes some way to calming those who are envious of the successful.
Dr Neville Prior

This is underlined by the fact that although he earns 40,000 more now than he did five years ago, he is financially no better off.

But why shouldn't the government tax those who earn more than 35,115?

If they are lucky enough to have done well, shouldn't they put something back?

"I don't hold with the argument that I'm lucky to be in a position to pay a high level of tax. Luck doesn't come into it.

"People in my position have taken risks, " says Neville.

Envy

Most workers would sympathise with the desire to metaphorically slap the hand of the Chancellor as it reaches into their wallet.

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So why, as Neville admits, is the idea of a higher tax rate so popular with the public?

Maybe the politics of envy has something to do with it.

"Government puts forward polices which will maintain their popularity, and a higher rate tax goes some way to calming those who are envious of the successful.," he says.

And he has experience of the green-eyed monster.

He feels that several of his acquaintances are no longer so close since he recently moved to a larger house.

But like many other higher earners, Neville believes that everyone, regardless of income, should pay the same rate.

However, he also wants the basic rate raised.

That would still mean that those who earned more would pay more.

And according to him, not reforming the tax system will lead to entrepreneurs leaving the shores of UK plc behind in search of countries with easier tax regimes.

"There's a lot of people I know who are talking about moving their businesses to another country," he told BBC News Online.

And, with the number of higher rate taxpayers having increased from 2m to 3.5m since Labour came to power, if his views were widely shared, it could prove a real worry for the government.

Are you worried about the effects of high taxes on enterprise? Or do you think that those on higher incomes should payer higher tax rates?


As an undergraduate in Physics I'm hoping that my very hard academic work will lead to an intellectually and financially rewarding career in Patents. I will have paid nearly 4K tuition fees and will owe around 11K in student loan. After a further 4-5 years of postgrad study I will emerge a valuable and moderate-earning (45K pa) member of educated society, and I expect to be rewarded as such.

We really must redefine "rich" since I can expect to lose a great deal of my hard earned money to the taxman. By all means tax ridiculously high earners (200K+) but please don't excessively tax the mid-band who have worked so hard to be where they are.
Jon Sedar, London, UK

The Chancellor should raise the band of the higher rate taxpayer, to perhaps 100k and above. People who earn 35k are not rich especially if you live in London! I'd also be happier about the whole thing, if I knew that my money was being spent wisely on much needed improved healthcare services, for example.
Eunice, Enfield

As an entrepreneur I find the tax allowances extremely stifling. I have spent a considerable amount of time and effort getting my company up and running and have accrued a considerable amount of personal debt in the process. Now that things are going well I would like to pay off that debt completely but find that I can't pay myself enough money from the company without incurring a considerable tax penalty. Should the (financially) successful be punished simply for being successful?
Ian McDonald, Bucks, UK

Why should I pay nearly half of what I earn at the upper end to the government?
WB, Glasgow, Scotland
I agree wholeheartedly with Dr Prior. I have studied for seven years since coming out of school to receive hard-earned qualifications and I have worked many a long hour to get to where I am today. Why should I pay nearly half of what I earn at the upper end to the government? Why should those who aren't prepared to put in the effort that I have, benefit from my hard work?
WB, Glasgow, Scotland

As a 40% tax payer and mortgage holder I rarely see much money left over from my monthly salary after all bills are paid. As this is currently the case, my husband and I cannot afford to start a family as the extra cost would force us to breaking point financially and we would not then be able to provide the best for our child. With the current dropping birth rates, and with our scenario not being unique, then this is a situation which the country cannot afford to let continue as there will be fewer taxpayers in the future, therefore less direct money and more indirect taxation in order to keep the Treasury's coffers full.
ELS, Hants

Neville associates success with money all too easily. Big mistake. Some of the most successful people I know will never earn the higher tax rate, but they're good at their jobs.
Mike Hunt, Aberdeen

As 40% taxpayer myself I agree in principle with the more you earn the more you pay theory. But even though I do earn a good salary I have had to work for it. My family still has to balance the books carefully and NO I do not live in a luxury house and drive a BMW!!!
Kevin, London, UK

I was running a small business in the UK and found the tax restrictions so oppressive and unrewarding that I moved to the US. My higher rate tax burden personally dropped from 40% to 22% and with a higher gross income.
Steve, USA ex UK

Steve from the USA who trumpets the low rate of taxes in the US neatly forgetting to mention the hidden costs of health insurance, education, environmental degradation etc. The reality is that if you want good public services and a decent infrastructure you have to pay for it. The UK has underinvested in these areas for decades and it shows when you compare us to the rest of Europe and places like New Zealand.
Richard Collier, London Borough of Sutton

I pay 35% tax and as a single person do not see a lot of return on my tax money. Where are the better transportation links, pensions, healthcare, education and emergency services?
Tony C, Hereford

If higher earners are only willing to pay taxes for services they receive, then the future of Britain is indeed bleak. Progressive income tax is about redistribution, no matter how dirty that word sounds to some. In order to provide universal healthcare and education, most of the revenue has to come from higher earners, even if they aren't using the services. Do we want a society where the poorest (and they aren't all lazy scroungers) have to pay for it all themselves or do without?
Paul Brione, Oxford

Why should a person who had made a success of his life pay such a huge amount of tax? This government wastes so much money on projects that are doomed to fail. I only earn 14,500pa and pay enough tax, I would hate to have to pay 40% if I became more successful!
Andrew HS Baylis, Wakefield, United Kingdom

I'd be happy to pay more higher rate taxes if the government would stop turning all our money into bombs. Many of the weapons dropped on Iraq cost more than an entire school refurbishment.
Alan, Swansea, Wales

I paid 40% tax a couple of years back when the threshold was lower. Any overtime I worked took me into the 40% bracket. Because of this government's tax regime and my high mortgage costs I was not well off at all, in fact I felt severely disadvantaged. At the same time the service I receive such as my GP receptionist telling me I could not see a doctor for eight days really makes me question what I am being taxed for.
Ken, South East

As a higher rate tax payer, I think the good doctor protests too much. Remember that a huge percentage of tax is indirect these days, and affects the worse off disproportionately. So be satisfied with your luxury home and stop whinging.
Mark Price, Lancashire, England

But why should the government tax those who earn more than 35,115? Why 35k when there are those earning that per DAY in the UK? Let's be sensible, if you want to tax the rich, DEFINE rich and it's a hell of a lot more than 35k.
Pierre, Wilts

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