I've just noticed this from James Forsyth over at Coffee House:
One of the great scandals of this government is how many obstacles there are to people moving up the economic ladder. The Red Book (page 62) reveals that more than 1.8 million people are caught in a 60 percent marginal tax rate—as they earn more they lose access to tax credits and welfare benefits and also have to pay tax on the additional income that they are earning—which is an increase of more than a million since Labour came to power. This hardly encourages people to work their way up.
James is absolutely right, this is a great scandal—in fact greater than he thinks:
The Red Book is full of spin, and the table to which James refers is a prime example. There are 1.8 million people in the "over 60 per cent" bracket. Almost all of these are right at the top of the bracket i.e. 70 per cent. Something which the Red Book omits to mention.
This isn't the only misleading feature of these "marginal deducation rate" statistics, which fail to take into account things like housing benefit withdrawal and student loan repayments.
