In Daily Telegraph-ese, the “squeezed middle” means the very rich
In yesterday’s Daily Telegraph, head of personal finance Ian Cowie echoed Ed Miliband’s concern for the squeezed middle:
“Most people imagine that only people paid over £150,000 a year suffer tax at more than 50pc but many members of the ‘squeezed middle’ earning much less than that pay marginal tax rates of 62.5pc.”
From the use of the political phrase du jour, you might think Cowie was referring to people in the middle of the income spectrum who are being squeezed.
He is not:
“The explanation is a combination of income tax at 40pc, National Insurance Contributions (NICs) at 12pc and the clawback of personal allowances at the rate of £1 for every £2 of income in excess of £100,000 a year.
“That clawback - initially announced by Labour Chancellor Alistair Darling but upheld by his Conservative successor George Osborne - means the personal allowance, which enables everyone else to earn £7,475 before they must pay tax, has been lost altogether before earnings reach £113,000 a year”
The ‘squeezed middle’, for Cowie, refers to people who are earning salaries more than twice as much as those comfortably above the ninetieth percentile of earners, that is among top ten per cent of earners in the country:

Cowie also falls back on the Laffer Curve to attack the idea of progressive taxation altogether:
“There is nothing theoretical about the Laffer Curve, which demonstrates how tax revenues fall when tax rates rise; it is based on a common sense appraisal of human nature.”
The Laffer Curve, in its purest form, argues that although raising tax rates from, let’s say 0 per cent to ten per cent, will increase revenues, if you keep on increasing it, at some point revenues fall as individuals refuse to work as an increasing proportion of salaries are allocated to tax.
However, by arguing there is such a curve, Cowie finds himself in agreement with such rabid free-market capitalists as Nikolai Bukharin, designer of the New Economic Policy under Lenin.
What Right and Left really disagree about is where the peak of the curve is. In reality, conservatives often believe in a ‘Laffer Slope’ and not a curve at all.
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http://twitter.com/karanmude/status/96617057319268352 Karan Mude
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http://twitter.com/wassboy/status/96617219433308161 Phil Wass
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http://twitter.com/jamesmills1984/status/96617601165307904 James Mills
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http://twitter.com/paul_trembath/status/96620775104184321 Paul Trembath
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http://twitter.com/therightarticle/status/96621324134387712 Michael
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http://twitter.com/caer23/status/96621716226326528 Caer
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http://twitter.com/arcpdur/status/96621778583040000 Peter Durant
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http://twitter.com/shriekinleek/status/96632672859852800 Bill Cawley
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Selohesra
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StephenHenderson
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http://twitter.com/dratnaike/status/96640260062183425 Dànaidh Ratnaike
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http://www.artisanalpencilsharpening.com/ Mr Danger
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william macvean
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http://twitter.com/danielelton/status/96651953727217664 Daniel Elton
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Ed’s Talking Balls
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Ed’s Talking Balls
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Leon Wolfson
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Ed’s Talking Balls
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Ash
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Richard
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Ed’s Talking Balls
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Ed’s Talking Balls
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http://www.artisanalpencilsharpening.com/ Mr Danger
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Ed’s Talking Balls
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Ed’s Talking Balls
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Dave
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http://www.leftfootforward.org/2011/10/policy-exchange-labour-and-the-conservatives-need-to-reach-out-to-the-ordinary-voter/ Labour and the Conservatives need to reach out to the ordinary voter | Left Foot Forward
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http://www.leftfootforward.org/2012/01/the-real-squeezed-middle-could-stagnate-for-20-years/ The real squeezed middle could stagnate for 20 years | Left Foot Forward
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