Welcome to Money Distilled. I’m John Stepek. Every weekday I look at the biggest developments in the world of markets and economics, and explain exactly what it all means for your money.
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I Was Wrong — It’s Worse Than I Thought
I’ve been talking rather a lot about marginal tax rates in the UK this week (I was on Bloomberg TV this morning, explaining — some would say ranting — about how much higher our income tax rates are than we appreciate).
So it is with some embarrassment that I have to admit that I was wrong. The situation with marginal tax rates in the UK isn’t as bad as I made it out to be.
It’s worse.
My colleague Merryn Somerset Webb (who, as I may have mentioned, has this irritating tendency to be right on the relatively rare occasions where we don’t quite see eye to eye on things), took the opportunity to write in to the Money Distilled mailbox with a guest column in which she explains where I went wrong. Here’s Merryn:
“Earlier this week, my colleague John Stepek wrote his Money Distilled newsletter (editor’s note: which is of course brilliant – sign up here) on the matter of the UK’s marginal tax rates. You should read it – largely because it will give you something of a shock. You think the highest marginal tax rate in the UK is 45%. John says it is 62%. That’s nasty. But I reckon he’s missed something – and that the top marginal rate of tax in the UK is actually 71%.