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Calculations for citizens income in UK
income taxNat ins
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First estimate
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Average UK salar2016£27,500.00
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threshold£11,000.008060employed 31500000
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high rate threshold£43,000.00ESA1320000
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Taxable£16,500.00£19,440.00economically inactive8729885.057
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Base rate20%0.12% inactive on esa0.15120474
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Current tax or NI paid£3,300.00£2,332.80% inactive who get new money0.84879526
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Assumed citizens income per week
£150.00
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per year£7,800.00
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New pre tax income£35,300.00
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New taxable income£24,300.00
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Assume that average earner just breaks even on the citizens income
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Additional tax £7,800.00
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Total income tax £11,100.00
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New base rate of tax46%0.12
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New higher rate 66%0.12
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However this is an underestimate since it fails to account for economically innactive
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Percent economically inactive
21.7%
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Pecent active78.3%
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So each worker will have to fund citizens income for 0.28
of another person
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but only this fraction is new money due to esa
0.2352344463
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which is£1,834.83
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% unemployed0.048
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JSA78
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increase for each unemployed
£3,744.00
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Number of unemployed per employed
0.061
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Cost per employed£229.52
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So total additional tax£9,864.35
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Total tax£13,164.35
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New Tax rate 54.2%0.12
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total marginal tax+ni66.2%
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New upper tax rate74.2%0.12
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New upper marginal rate tax +NI
86.2%
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Note that the upper rate will cut in at a salary of£35,200.00
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Take home pay now of person on average wage£21,867.20
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Take home pay with citizens income and higher tax£19,802.85
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Position of a worker on median income
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Median salary2013£22,000.00
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estimate for 2016£23,500.00
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add citizens income£31,300.00
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taxable income£20,300.00
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Additional tax paid£6,937.38
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net gain per week£16.59
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