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Penniless footballers?

January 9th, 2006 · Posted by Skuds in Politics · No Comments · Politics

I had to laugh a bit at the latest attempt to persuade us that taxes in Britain need to come down – but only for the better-off of course.

This time it is a story about how our ‘draconian’ tax laws are keeping top footballers away from the UK. Is this an attempt to get the working people of Manchester to call for more tax breaks for the rich so that the next time they try to sign Ronaldinho he might accept? Or for scousers to feel aggreived that a 40% top rate is what kept Figo away from Anfield?

Somehow I can’t really feel too much sympathy with someone who gets paid twice my annual salary each week just because they have to pay tax at the same rate I do. If someone feels that £50,000 a week net is not enough to get by on then they probably need some lessons in financial management and not tax breaks.

Public services are a matter of matching up income to spending. Reducing taxes at the upper level means either reducing spending or increasing taxes elsewhere to make up the difference, or is that over-simplifying it a bit?

There is an argument that spending can be reduced without affecting services by increasing efficiency, but I think that if that happened I would rather see the savings used to increase service or reduce taxes to those most in need. Certainly footballers would not be first in the queue.

Some special case might be made for West Ham, obviously.

The other thing I don’t understand is how ISF – apparently some sort of experts in international tax – work out that the impact on footballers is effectively 50% of gross salary. Surely tax is 40% on everything over a certain threshold, and national insurance is 11% up to a point and then only 1% over that. They will be hitting the higher brackets for everything after their first week’s pay so by far the largest part of their wages will be attracting 40% tax and 1% NI and overall they will probably be paying about 42% in taxes.

Someone on a more modest £30,000 a year, instead of £60,000 a week, could be paying 35% or 36% of their total earnings in tax and NI (I am guessing a bit) so if top footballers are paying only 6% more tax than a skilled worker is it really so terribly unfair?

I always sort of assumed that anyone earning over £100,000 a year (let alone a week) was using so many tax dodges and loopholes that they pay a lot less in tax anyway, but maybe footballers are the exception?

And before anyone starts pointing the finger and saying this is just the politics of envy, these tax rates applying to multi-millionaire footballers are the same rates that I pay. I am not complaining, or thinking about moving to Spain!

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