Graphs at a glance: Tories abolished 50% tax rate for people earning more than £150k. But did you notice the stealthy 51% tax rate for graduates earning more than £43k?

Did they or didn't they? Did the Tories abolish the 50% tax rate, or didn't they. 


Actually, they did and they didn't: 

a) They Did: People earning more than £150,000 have been spared the 50% rate (52% including 2% National Insurance). 

b) They Didn't: People with student loans earning more than about £43,000 are heading for a 51% rate (including 2% National Insurance).


This is illustrated by a graph in the IFS report "Payback time? Student debt and loan repayments: what will the 2012 reforms mean for graduates?" showing the marginal tax rate for people repaying student loans.

Graduates will start paying an additional 9% of their earnings once their pay exceeds £21,000. The 40% income tax rate kicks in at about £43k (assuming 1% annual increases in the upper earning limit). Marginal rate = 40% (income tax) + 2% (NIC) + 9% (Student Loan) = 51%.