A 50p tax rate means the rich will pay less

 

The 50p tax rate is popular according to the polls. Most people like the idea as they think it means the rich few will pay more so they will pay less. Unfortunately, the opposite is the truth. A 50p tax rate will raise less revenue from the rich, so those on lower incomesĀ  will have to pay more.

The evidence from the period of 50p tax rates in the UK is quite clear. Self assessment Income Tax fell from Ā£21.7bn in 2009-10 (after the crisis)Ā  to Ā£20.6bn last year. It is forecast to surge to Ā£27.4bn in 2014-15 with the lower 45p rate. The Treasury figure of Ā£100m extra revenue is not confirmed in anyway by the pattern of past tax collection. Numerous high earners left the country to avoid the 50p tax rate when it came in, meaning lower income taxpayers have to pay more.

The Sunday Times provides other figures which show a surge in tax revenue at the lower 45% rate, from Ā£41 bn under the 50p rate to Ā£49bn now. There has also been a sharp increase in theĀ  number of people earning more than Ā£1m now in the UK, from 13,000 at 50p to 18,000 at 45p. That’s a large increase in tax revenue from the rich.

133 Comments

  1. Andyvan
    January 26, 2014

    So what you are saying Mr Redwood, and you are right, is that most people in this country are so brainwashed that they think it is right that well over half of a persons income should be stolen. That is “taxed” by the state to fund it’s ridiculous, wasteful ineffective vote buying, freedom limiting and war mongering. If people would research “common law” and discover just how they are being used perhaps they wouldn’t be quite so happy to encourage state theft. Maybe they’d see how this country really runs, tip- it isn’t for our benefit.

    1. lifelogic
      January 26, 2014

      Indeed why are people so in favour of 50% slavery especially when the state delivers so little of any true value in return.

      The reason of course is they most do not have to pay 50% and think they might get a little bit of other peoples money in return.

      1. Leslie Singleton
        January 26, 2014

        lifelogic–The macro position is probably (but not quite proven to be, methinks–correlation is still not causation) the way our host describes; but the man in the street thinks of the micro, meaning that every individual choosing to carry on earning at the same amount above the threshold and stay in the country is going to pay more. Personally, I cannot understand why the Tories (whom I suppose I hate less than Labour) do not make it more obvious that 45% is an increase, not a cut, vis-a-vis the average during Labour’s term–it has to be given that Labour only put the rate up at the last moment when it was obvious they were going to lose. Also Labour should be invited, given their deceit, to explain why, if it is all as obvious as they say, they stop at 50% and not 60% or indeed higher.

        1. Hope
          January 27, 2014

          It is not 50 p, add NIa s well. No one should work for less than half they earn no matter how rich they are.t he government needs to stop spending.

          1. bigneil
            January 27, 2014

            Not just spending (i.e. HS2 ) – but giving Ā£50+m a DAY to the EU.

        2. lifelogic
          January 27, 2014

          The Tories should make the case that lower tax rates create more jobs and makes everyone better off. It actually increases tax revenues from a smaller slice of a bigger cake. Also the case that individuals and businesses use money rather more efficiently than the state sector does. Which is not not very hard.

          1. uanime5
            January 27, 2014

            The Tories should make the case that lower tax rates create more jobs and makes everyone better off.

            How exactly does giving the wealthy a tax cut result in companies creating more jobs?

            It actually increases tax revenues from a smaller slice of a bigger cake.

            Care to provide some evidence of this from other countries. Make sure you include several tax years to show that any increase isn’t due to the wealthy deferring their income until they can get a tax cut.

        3. peter davies
          January 27, 2014

          The tories need to do a better job explaining that the lower rate of tax one pays, the more left over to spend on things that will contribute to jobs and higher VAT receipts.

          This 50p thing is nothing more than childish politics from Unite Labour

    2. Mark B
      January 26, 2014

      Andyvan,

      You and me both !

      I do not fall into the 45%, yet I do not feel the need for the state to take someone else’s wealth. I do wonder if people were told that on top of millionaires paying 50%, that they to would be paying a higher rate, would they then still think it fair for the Government to take an ever larger proportion of ‘their’ wealth.

    3. Horatio McSherry
      January 27, 2014

      I’m glad you’ve used the word “theft”. Not enough people do. This is especially the case with Payment on Account for Income Tax.

  2. margaret brandreth-j
    January 26, 2014

    Surely it is a case of what matters more to the economy tax or ‘ free money’ and will this not differ from year to year depending upon which industry is hit hardest?
    Rafa is concerned about losing this set as Wawrinka takes the lead , but neither will be poor.

  3. Mike Stallard
    January 26, 2014

    Nope – rich people can afford accountants. And they don’t have to live here. Taxing them till the pips squeak is not going to work.

    Here is a thing which is never questioned: why should they be taxed?

    It is actually not only silly but immoral. In any society, the people who should be rewarded are the law-abiding, hard working, determined people who lead. If you reward (as we do) failures, the “vulnerable”, the failures and the cynical, then – Bingo! – I wonder who you get more of?

    And will someone please explain why the rich people, who by and large make their own arrangements, should pay a whole heap more than the ones who are drawing money and resources out of the system?

    1. Lifelogic
      January 26, 2014

      The explanation is that there are usually votes to garnered or bought (in a democracy) by immoral politicians. They incubate feelings of envy, unfairness and jelousy then take other’s money, waste most of it on jobs for friends and relatives and then toss a few morsels to some voters in certain select areas just before elections.

      1. Max Dunbar
        January 26, 2014

        Bull’s Eye LL!

      2. bigneil
        January 27, 2014

        LL – -do I detect a hint of cynicism?

    2. uanime5
      January 26, 2014

      And they donā€™t have to live here.

      Then why haven’t they already left? Plenty of low tax countries to chose from.

      In any society, the people who should be rewarded are the law-abiding, hard working, determined people who lead.

      They are rewarded by earning 10 or even 100 times the salary of their employees.

      1. alan jutson
        January 27, 2014

        Uni

        “Then why haven’t they already left “…..

        Perhaps they had no need to.
        Perhaps they just need to change their Status to Non Dom and change a few details in how they run their life..

        1. lifelogic
          February 1, 2014

          Not easy to become non dom if you have an original UK domicile of origin.

  4. Richard1
    January 26, 2014

    Another populist left wing gimmick by Miliband. Labour now stand for: high taxes, a return to uncontrolled debt, prices and incomes fixing by the govt, ‘green crap’, eurofederalism with no referendum, abandonment of the reforms in education and welfare, and the return to power of the unions. Its the 1970s plus eurofederalism and green crap. Do people really want that?

    1. ian wragg
      January 26, 2014

      Couldn’t decide who you was talking about. Milipede, Clogg or “call me Dave” as the description fits all 3 nicely.

      1. bigneil
        January 27, 2014

        would be nice to see what %age of their TOTAL “wages” what should have been paid in tax – and what their accountants got it down to.

        Like the massive chains that pay less in tax than their minimum wage employees.

  5. lifelogic
    January 26, 2014

    Many on benefits are behaving entirely rationally given the system that pertains. Why leave the house to go to work work for say 45 hours (including travel) a week then just to be perhaps Ā£10 a day better off. Often actually worse off after the additional costs of travel, lunch, loss of time, benefits and childcare.

    It is the system the government has simply failed to address it. Claimants are often just being rational.

    Why on earth is Ed Balls bothering to lurch to the left with his 50% tax promise. Labour will win anyway against Cameron and far more easily without this 50%. Mind you the half witted coalition kept 50% for years and still have 45% more NI and with no child benefit and now no personal allowances either.

    Yet still Cameron claims to be a low tax conservative and EUsceptic. We judge him from his actions not his vacuous words.

    1. Bazman
      January 26, 2014

      Having no minimum wage, employment rights along with benefit cuts to put them on the streets or out of a job will somehow further incentivise them? It will not.

      Reply Any post with your usual two words at the end is being deleted, as I explained a little while ago, as some people find it an offensive ending

      1. libertarian
        January 26, 2014

        Bazman

        You are a fan of Germany but they have NO MINIMUM WAGE.

        Explain

        How’s that denying the rate of full time well paid job creation coming along now that the official figures reflect what I’ve been telling you for the past 12 months?

        1. uanime5
          January 26, 2014

          Libertarian Germany recently introduced a minimum wage.

          The rate of full time, well paid job creation has been in decline for some time. Most new jobs are poorly paid, part time, or both.

          Also under German law any company with more than 5 employees has to have a worker’s council and half of their border of directors has to be made up of employee representatives. Perhaps the UK should copy these policies.

          1. libertarian
            January 27, 2014

            Uanime5

            Wrong on ALL counts. Merkel has agreed to implement a minimum wage in return for large tax cuts !!

            No the board of directors doesn’t have to have ANY workers on it. I’ve told you this so many times.

            According to the ONS 72% of ALL new jobs created in past 12 months are PERMANENT, FULL TIME well paid jobs. Only 28% are part time or temporary.

            Its really easy you’ve only got to stop believing Labour party propaganda and actually google it.

          2. uanime5
            January 27, 2014

            @libertarian

            You are the one who is incorrect. Merkel agreed to a minimum wage but refused to introduce tax increases. She has not introduced tax cuts.

            http://www.bbc.co.uk/worldservice/learningenglish/language/wordsinthenews/2013/11/131122_witn_merkel.shtml

            The board of directors in Germany does have worker’s representatives on it. Next time try doing basic research.

            http://en.wikipedia.org/wiki/Supervisory_board

            Care to provide a link to this ONS article. Along with their definition of “well paid”.

          3. libertarian
            January 31, 2014

            Uanime5

            Ha ha you talking about research laughable.

            In Germany large public corporations have a workers board that has workers representatives on it. They are NOT on the main board of the company, they are NOT on the board of Directors

            Here is the Merkel tax position on concessions to introduce a minimum wage in Germany

            http://www.bbc.co.uk/worldservice/learningenglish/language/wordsinthenews/2013/11/131122_witn_merkel.shtml

            I’ve provided the links to the job market stats so often that I’m just not doing it again. You are wrong and consistently wrong about the job market.

            Well paid is anyone on a living wage or higher.

            By the way since Germany agreed to introduce the minimum wage whats been happening to their economy?

          4. Bazman
            February 1, 2014

            You are blaming the minimum wage for the Germans economic problems? What evidence have you and why should the government of any country subsidise poverty wages paid by companies through the benefit system? The job is worthless to the country and the employer. Stop the benefits? Really…?

        2. Mark W
          January 27, 2014

          Germany has something else we don’t. Educational selection on merit. We ought to try it here, oh I forgot, we did. Labour trashed it years ago. Funny how the cabinets of both parties used to be full of state educated grammar kids…..

        3. Bazman
          January 27, 2014

          They also have unions to prevent poverty wages being paid.

      2. Bazman
        January 27, 2014

        I doubt its the ending they find offensive. As if they have never been offended and lets face it when are they not offended!? It’s the posts contradicting their regressive right wing and often deluded world views that I find totally offensive from start to finish that is no doubt the problem. Claiming to have intelligence, but all evidence showing this is not the case. Glad to be getting under their skin. Toodle pip.

        1. Edward2
          January 27, 2014

          You are only letting yourself down by getting all rude and abusive Baz.
          Sign of a failing argument I’ve always thought.
          Your best posts are ones where you argue without anger and then you make some good points
          But you have an assumption that your views are the only possible correct ones and this cannot always be right.

        2. libertarian
          January 27, 2014

          Sadly Bazman some of the things you claim are just so easy to disprove in fact and some of the things you deny are also very easy to prove so I guess all that leaves you with is personal abuse. I guess thats standard Labour Party tactics though. As Edward2 said its a shame because when you debate sensibly you can be quite lucid and offer interesting perspectives occasionally .

          1. Bazman
            January 28, 2014

            Such as? You all go a bit quiet on many of my comments. Don’t try to undermine me with generalisations. I’m to old for that trick.

          2. libertarian
            January 31, 2014

            I’ve been busy, starting another new business and hiring some staff so not been on for a while.

            Specifics? you are wrong about the job market

            You are wrong about part time and temp work more than 70% of all new jobs are full time permanent

            You are misguided about minimum wage, it is a disaster for the low paid

            You are wrong about higher rates of tax and motivations of the so called wealthy

        3. bigneil
          January 27, 2014

          go on – i’ll ask – how do you know “toodle pip” doesn’t offend anyone?

          1. Bazman
            January 28, 2014

            Some will just have to stay offended as they should be.

  6. oldtimer
    January 26, 2014

    Yet another witless Labour policy announcement. It owes everything to political positioning and nothing to common sense.

    1. REPay
      January 27, 2014

      No surprise when the government does so little to influence opinion and so easily bows towards statist solutions…

  7. David Hope
    January 26, 2014

    You may well be right about what it will raise but I don’t really care if it raises a lot or not. Personally I don’t think that the government should ever be taking away half or more of everything you earn. Someone else shouldn’t be taking more than you do from your work!

    It’ll likely only hit people on salaries around the 150k mark. The super rich will have plenty of avoidance schemes with good accountants and carry on paying less.

    They should concentrate on simple taxes rather than trying to divide classes.

    1. Bob
      January 26, 2014

      They should concentrate on simple taxes rather than trying to divide classes.

      But David, class warfare is their raison d’ĆŖtre.
      When Maggie Thatcher turned swathes of the population into property owning, share investing capitalists, Labour had to import a new voter base from the third world.

      Labour have no interest in seeing people better themselves, they need welfare dependence to continue and grow.

  8. petermartin2001
    January 26, 2014

    Mr Redwood,

    I’d suggest that the correct title for your post would be “A 50p tax rate means the rich will possibly pay less”

    An HMRC report puts it this way:

    “The 50 per cent additional rate of income tax was introduced on 6 April 2010…. was expected to yield around Ā£2.5 billion”

    “The conclusion that can be drawn from the Self Assessment data is therefore that the underlying yield from the additional rate is much lower than originally
    forecast (yielding around Ā£1 billion or less), and that it is quite possible that it could be negative”

    So I’m reading that as that it did appear to yield less than a billion but the uncertainties in the methodology were great enough to suggest that it could have been negative. Equally it could have been a lot more than $1 billion.

    If we are looking at this scientifically, instead of politically, we’d have to say that further research was needed to answer the question with any degree of certainty.

    Reply I have given you actual Treasury figures for what happened on self assessment tax – the same is borne out by today’s Sunday Times figures for past tax receipts which shows that the higher top rate yielded Ā£just over Ā£41 bn in each of the years 2011-12 and 2012-13, and that this year 45p will yield Ā£49.3bn. We do not need to speculate or estimate – we now know we received less from the higher rate and more from the 45% rate.

    1. uanime5
      January 26, 2014

      We do not need to speculate or estimate ā€“ we now know we received less from the higher rate and more from the 45% rate.

      Give that the year you’re using for the 50% tax rate was one of low growth and low income levels across most tax band, while the year you’re using for the 45% tax rate was one of higher growth and higher income levels across most tax band the evidence isn’t as clear cut as you claim it is.

      1. petermartin2001
        January 27, 2014

        Uanime5,

        And its just one year. On the one hand you could argue that no-one is going to emigrate to save 5p in the Ā£ on their tax. On the other hand many would hold over some of their income until the following year knowing that the tax would be less. So its rather inconclusive.
        Apparently the most effective way to minimise personal tax in the UK is to conduct your affairs through a limited company then pay yourself a dividend rather than an income. Its about 10% up to Ā£35k I’m told.

        1. libertarian
          January 27, 2014

          PeterMartin 2001
          I do wish people would bother to check before posting, its really simple.

          You pay EXACTLY the same amount of income tax whether you take it in salary or dividends. The saving comes in employers NI. You’ve also overlooked the fact that a limited company is also liable for corporation tax of 20% on top of that.

        2. petermartin2001
          January 29, 2014

          I’ll have to come and speak to you about my tax affairs! If UK company taxation law wrt payment of income vs dividends is “really simple” to you then you must be a b****** genius!

          1. libertarian
            January 31, 2014

            Oh for goodness sake. It IS simple. You pay income tax on ALL income no matter where or how its derived. Why do you find that complicated?????

            The base rate of tax is deducted at source as PAYE, higher rate tax payers pay the difference under self assessment as calculated from annual P11D returns.

            If you think that is difficult don’t ever try and grapple with some of the other tax laws !!!

  9. lifelogic
    January 26, 2014

    As you correctly say “a 50p tax rate will raise less revenue from the rich, so those on lower incomes will have to pay more.”

    It further destroys jobs, makes the rich and hardworking leave and it damages confidence and investment. So why did Cameron’s idiotic coalition keep it going until this year?

  10. alan jutson
    January 26, 2014

    Did you really expect anything else from:

    “I will now pay down the deficit until we are in surplus” ……Balls.

    Why not make it 99% and raise even more, given such crass logic.

    While we are about it, let us have a mansion tax starting at Ā£250,000.

    Let us also beg people some more people to come here from abroad.

    Then we can pay everyone more working tax credits, higher benefits, and be in power for ever.

    Its the socialist dream of politics

    1. Lifelogic
      January 26, 2014

      While we are about it, let us have a mansion tax starting at Ā£250,000.

      So that is a studio flat, on a busy road, with no parking and above an Indian restaurant in Camden Town then. They already pay nearly Ā£1500 in council tax.

      1. alan jutson
        January 26, 2014

        LL

        “So that is a studio flat…..”

        Exactly my exaggerated point.

        Another one
        Better still, get everyone to work for pocket money and have to rely upon the State for everything else.

        Vote Labour for “the politics of envy”

  11. Iain Gill
    January 26, 2014

    If they really wanted to balance the amounts paid by the rich and ordinary people out they could remove the tax perks on one-man-band limited companies, and force people working through such an arrangement to pay the same tax and national insurance as everyone else on PAYE. They could abolish the perks of trust funds used to shelter houses etc from inheritance tax and forced sale to pay for old age care. They could stop offshore companies avoiding tax on money earned in the UK. They could make work visa holders pay the same tax and national insurance as Brits. They could simplify the tax and benefits system massively and roll away most of the complications. As you say the 50% rate is of marginal difference other than emotionally to the voters.
    The reality is none of the main parties want to bring in fairer taxes for the rich, middle, and poor income groups, they just want to spin a good story. Somehow I think ā€œnone of the aboveā€ will win the next election.

    1. Lifelogic
      January 26, 2014

      “tax perks on one-man-band limited companies”

      There are not many really. For most people the costs and hasle of running the company often makes it not worth while. Largely it just means you can defer the higher 40% tax, for a while, providing you keep the money in the company. You still pay it in the end usually – perhaps a little NI saving sometime through using dividends but small beer usually.

      1. Iain Gill
        January 26, 2014

        sadly not true

        i know the figures very well

      2. Roy Grainger
        January 27, 2014

        …. and you can pay your wife and relatives in company dividends thus saving even more tax.

        1. Kenneth R Moore
          January 27, 2014

          Yes and being limited also stops you from losing your home and life savings if your business goes bankrupt because a debtor decides he doesn’t want to pay. That’s why most companies go limited because the law doesn’t class refusing to pay for goods as theft – too many people about that all presume your ‘rich’ because you have a business so can afford to give them free stuff.

          You still pay corporation tax, employee paye, rates (fancy paying Ā£1200 a month to the council for my modest workshop) , tax on sky high insurance, plus the government gets a fat VAT cheque every month.

    2. kenneth r moore
      January 26, 2014

      If they really wanted to balance the amounts paid by the rich and ordinary people out they could remove the tax perks on one-man-band limited companies, and force people working through such an arrangement to pay the same tax and national insurance as everyone else on PAYE.

      Well ‘ordinary’ people are free to set up a ‘one man band limited company’ and become one of the ‘rich’. But many won’t because they don’t want the sleepless nights and working 60+ hours a week.
      It’s just more left wing drivel that all business people are fat cats filling there troughs at the expense of the workers etc.

  12. ROJ
    January 26, 2014

    First they came for people with incomes over Ā£150,000, but my income was less than Ā£150,000, so I said nothing ………..

  13. bigneil
    January 26, 2014

    off topic – – -If correct then go ahead with the lower rate to get more- will it be used to house all the Syrians that DC is hell bent on bringing here? – we already have (big housing problems ed) due to (past substantial inward migration ed) – where are all the taxpayer funded properties and lives going to go? and plainly it will be the working class who has them (in ed) their neighbourhood. What jobs will they do? – bringing loads of very angry people here will only bring problems. I feel sorry for them -but bringing loads here -is like trying to get a couple of million people into a lifeboat for 50.

    It just looks like a Tory repeat of what TB did – the deliberate destruction of a nation. But this seems to be DCs hell bent course.

    p.s. – will keith vaz be there to meet the first one at the airport?

    Reply Mr Cameron has not joined the UK to the UN idea of taking 30,000 refugees and has made clear the UK’s main effort is to help displaced Syrians where they now are, and to work to a peaceful solution in Syria to allow them back to their own country.

    1. alan jutson
      January 27, 2014

      Reply to reply

      Not yet he hasn’t

      Whilst I thought he put very good arguments to support his case, he looked to me like he was preparing to do a “U” turn in the end.

      I hope he sticks with his arguments, we have much to be proud of so far, especially when compared to many other Countries efforts of help.

  14. acorn
    January 26, 2014

    HMRC does some good stats nowadays; some trust them more than ONS stuff. Probably cos you can do jail time telling porkies to HMRC. Relevant to this post is http://www.hmrc.gov.uk/statistics/tax-statistics/table2-5.pdf ,which shows tax liability by income range. Of the four years shown, 2013/14 is the one to forecast at the 45p additional rate, instead of the 50p of the previous three years.

    Get your calculator out this wet Sunday and see the rate at which the number of additional rate taxpayers is going up compared to all taxpayers. Also, how they have gone up from 0.86% of all taxpayers to 1.10%. It will be interesting to see how this table turns out with the population, particularly working population, stats from the ONS.

  15. yulwaymartyn
    January 26, 2014

    I am always wary about the arguments concerning those people who apparently leave the country because their bonuses have been cut or because the top rate of tax has been increased. We had all this from the Mayor of London about bonuses but figures are never provided. Here JR says “numerous” high earners left the country because of the 50 p tax rate hike. How many? Who asked them? How many said it was solely for this reason? What other reasons were given?

    More details please.

    Reply Just look at the drop in high earners when the 50p tax rate came in, and the transfer of various financial service activities – hedge funds, trading desks – to foreign centres.
    This year, with the rate down to 45%, there are 18,000 people earning over Ā£1m instead of 13,000 under the 50p tax rate, so that’s a lot more tax revenue.

  16. behindthefrogs
    January 26, 2014

    Raising the tax rate to 50% is probably a correct move. It should however be accompanied by the removal of the top rate of NI above Ā£150k. This would mean that the 50% rate would effectively only apply to unearned income. It would also remove the fiddle whereby the top earners move their salaries outside the need to pay NI.

  17. NickW
    January 26, 2014

    The problem is one of communication.

    So far, there has been no successful communication to the electorate that lowering tax rates can increase the tax revenue. The problem is that it is counter-intuitive and the concept has to battle with the emotions of jealousy and rage which Labour take such great delight in utilising to their own advantage.

    We need an advertising campaign along the lines of “Soak the rich; reduce tax rates”, backed up by the simple message; “If you want to sell more of anything you reduce the price” Jobs are no exception; tax is the cost of having a job.

    With Hollande setting such a stunning example of where Ed Balls wants to take us, it surely shouldn’t be that difficult.

    1. NickW
      January 26, 2014

      If one accepts the proposition that the electorate bases its voting decision on emotion rather than logic, then one has to accept too that the Labour message of instant gratification has more appeal than the Conservative one of hard work in the present with reward in the future.

      If one is going to formulate a successful emotional message (which has the virtue of being true), one way of doing it is to address the wishes and desires we all have (hopefully) to work for and make sacrifices for the future of our children.

      Kicking the can down the road as far as deficit reduction is concerned is a selfish and disgraceful act as far as our children are concerned; politicians have failed to drive that message home, (very likely because they wanted to be free to bribe the electorate when it suited them).

      Creating the country which Balls and Miliband so desire, in which success is vilified and punished, is not going to do our children any favours whatsoever, and again, we have France as an example of the end result of Labour’s policy direction.

      The question is this, “Will YOU vote Labour and steal your children’s future?”

      1. uanime5
        January 26, 2014

        Creating the country which Balls and Miliband so desire, in which success is vilified and punished, is not going to do our children any favours whatsoever, and again, we have France as an example of the end result of Labourā€™s policy direction.

        How exactly is raising the rate of tax the richest 1% pay punishing success? Are you claiming that only people earning huge salaries are successful.

        Also France has restored more of their pre-2008 GDP than the UK so they’re currently an example of how to more successfully manage your economy than the UK.

        1. REPay
          January 27, 2014

          The disparity says more about the fools gold borrowing binge here and how badly Labour ran the economy. Also how having less exposure to the Financial Services impacts less in a fiancial crash, although if you are a tax and spender you have to love the tax take from the City – as Brown and Balls did when they looked the other way.

      2. Bazman
        January 27, 2014

        Running the country for the many and not the few in the vain hope that some wealth will trickle down is the way forward. The biggest fear for these managers of labour is higher personal tax rates and the idea they will just get a job abroad is laughable.Who is going to be daft enough to employ them on these hourly rates?

    2. Lifelogic
      January 26, 2014

      Indeed why is Ed Balls doing it, Labour are surely going win better without it anyway? Is he just trying to help the Tories out a bit? Or perhaps he really is very stupid and wants to copy Hollande’s politics of envy.

      Before elections you usually promise to cut taxes not increase them. How is the promised IHT tax cut coming on Osborne?

    3. uanime5
      January 26, 2014

      We need an advertising campaign along the lines of ā€œSoak the rich; reduce tax ratesā€, backed up by the simple message; ā€œIf you want to sell more of anything you reduce the priceā€

      Basic economics shows that you can increase your sales by raising the price of your goods. That’s why people who make luxury goods don’t sell more products when they reduce the price.

      1. alan jutson
        January 27, 2014

        Uni

        “Basic economics shows you can increase your sales by raising the price of your goods”

        No that is basic maths, which takes no account of demand.

        Seem to remember that you complained when the utility companies put up the price of their services, something about people cutting back, not being able to afford to keep warm.

        Supermarkets putting the price of food up does not go down that well either thuis people purchase the cheaper/less expensive. offers.

        Your solution may work for a tiny percentage of the market. but had you ever run a business which sold to the general public, you would soon find out how important a competitive price is !

        Tell me why do people wait in line for hours for the sales to open if it is not to save a few pounds.

        Why have a couple of low cost supermarkets done so well the last few years ?

        Me thinks you have a selective memory/argument.

        1. uanime5
          January 27, 2014

          Basic maths shows that the loss of sales is can be offset by making more revenues from fewer sales.

          Your example involving an increase in the price of food isn’t correct as Sir Robert Giffen showed that when the price of basic foods (such as rice) increases people buy more of it and less of more expensive foods (such as meat). These Giffen goods are another example of when raising the price of something doesn’t result in fewer sales.

        2. peter davies
          January 28, 2014

          “Me thinks you have a selective memory/argument” Statement of the day

  18. English Pensioner
    January 26, 2014

    High tax rates are a form of jealousy, not taxation. In many countries it has been shown they usually decrease the revenue, France being an example with the rich moving to lower taxation countries. With modern communications, many highly paid jobs can be done from anywhere in the world, with occasional visits here which don’t attract taxation. Even the lower 40% rate has my daughter and her husband considering a possible move when they compare tax, schooling and other matters with a cousin in Australia.

    1. Denis Cooper
      January 26, 2014

      “High tax rates are a form of jealousy”

      Can’t argue with that, it’s the mainspring driving all calls for punitive taxation.

      1. Bazman
        January 27, 2014

        Concern for massive inequality is is not jealousy. This idea that we can all become rich if we try is for the birds. Its a closed shop.

        1. Edward2
          January 28, 2014

          Baz
          No but…we can all get richer if we try.
          There are no laws stopping any of us making money if we have an idea or a skill or a qualification.
          Yours is a philosophy of despair where no one can improve their life if born without a silver spoon.

    2. uanime5
      January 26, 2014

      High tax rates are a form of jealousy, not taxation. In many countries it has been shown they usually decrease the revenue, France being an example with the rich moving to lower taxation countries.

      Exactly how many French people have moved to low income countries? Also how much have these tax revenues decreased by?

      Given that the 75% tax rate has only recently been introduced in France I’m curious as to where you’re getting your information.

      With modern communications, many highly paid jobs can be done from anywhere in the world, with occasional visits here which donā€™t attract taxation.

      So why haven’t all the wealthy people moved to Dubai, where they’d pay 0% income tax?

      Even the lower 40% rate has my daughter and her husband considering a possible move when they compare tax, schooling and other matters with a cousin in Australia.

      For comparison what are the equivalent tax rates and salaries in Australia?

      1. ian wragg
        January 27, 2014

        According to the French Embassy there are 400,000 French living in London alone. Since the 75% tax rate over 20,000 have moved here.
        That doesn’t account for French colonies or other EU countries.

        1. uanime5
          January 27, 2014

          Did the French embassy record how much these French people were earning? If they’re not earning enough to have to pay the 75% tax rate then they’re clearly not leaving France to avoid it.

          1. Edward2
            January 28, 2014

            No of course the French Embassy did not Uni. It is no business of theirs.
            Some French people may be coming here simply to leave a French economy that is doing badly to come to the UK where there are better opportunities for jobs and success as well as lower taxes.
            One thing we do know is that a lot have settled here from France over the last few years.

  19. Mark
    January 26, 2014

    It is quite clear that Labour intend to campaign on populist but destructive policies. It also seems that Conservatives are tempted to follow in their wake – by offering increased personal allowances and higher minimum wage rates, rather than tackling benefits traps explicitly and raising real standards of living by defusing the property bubble and needlessly expensive energy policy.

  20. Lindsay McDougall
    January 26, 2014

    You are quite correct but why not do better and simplify income tax. Raise the 40% threshold from c Ā£40,000 to Ā£50,000 and make everybody earning over Ā£50,000 pay the same marginal rate of tax. Simultaneously, make child benefit available to all but subject to income tax, levied at the marginal rate of the combined household income.

  21. Mark B
    January 26, 2014

    The increase in people who pay the 45% tax are coming from parts of Europe where, either their money is not safe or, where the are higher taxes imposed eg France.

    Money, like water, will always choose path of least resistance/tax. So putting up the tax rate in order to help out a fellow Socialist is not a good idea. Taxation should be used only to finance necessary Government spend.

    What Ed Balls is proposing, is to tax more but refuse to cut the size of the State. Problem is, the State, unless held in check, will constantly consume ever more resources in order to maintain and increase its own funding, and thereby maintenance if living.

    Ed Balls is said to be a very clever man. He, I believe, has lots of bits of paper to prove this. Unfortunately both for him, and indeed ourselves, we have some 13 years of a Labour Government that suggests that we will need more than pieces of paper to get out of the mess they left us in.

    1. Lifelogic
      January 26, 2014

      “not a good idea”

      Indeed how can taking money off people who use it well in general and giving to governments who usually waste it ever be a good idea?

      1. Feodor
        January 27, 2014

        ‘…how can taking money off people who use it well in general and giving to governments who usually waste it ever be a good idea?’

        Do you honestly think yachts, art and fine wine a better use of money than schools, hospitals and courts?

        1. Lifelogic
          February 1, 2014

          In general yes they give pleasure to the buyers.

          Anyway was it not the government paying for painting of MPs like Diane Abbott do they not have an extensive wine collection?

          What about the wars in Iraq and Afghanistan, HS2 all the green tosh ……….. they are rather more expensive.

    2. uanime5
      January 26, 2014

      The increase in people who pay the 45% tax are coming from parts of Europe where, either their money is not safe or, where the are higher taxes imposed eg France.

      Why exactly would they come to the UK, rather than somewhere with even lower tax rates?

      1. ian wragg
        January 27, 2014

        Your stupidity astounds me. London is a city of culture and a vibrant communities. Unlike Dubai which for all it’s wealth is still repressive. (I lived nearby for 20 years). You obviously don’t get out much.

        1. uanime5
          January 27, 2014

          London is a city of culture and a vibrant communities. Unlike Dubai which for all itā€™s wealth is still repressive.

          So you’re claiming that there are reasons other than low tax rates than influence where the wealthy live. Given that Dubai has a 0% income tax rate, while the UK has a 45% income tax rate it seems that income tax rates don’t count for much.

        2. Feodor
          January 28, 2014

          Ian, to the best of my comprehension, “uanime5” is arguing that the rate of taxation is not the only, nor even the primary, reason why people with wealth choose to live in one place and not another. Hence the–rather rhetorical–‘So why havenā€™t all the wealthy people moved to Dubai, where theyā€™d pay 0% income tax?’

          Thus, in noting ‘London is a city of culture and a vibrant communities. Unlike Dubai which for all itā€™s wealth is still repressive’–you’re actually supporting “uanime5’s” argument that the rate of taxation is not the only nor even the most important of the factors determining where people with means choose to live and pay their taxes!

          ‘Your stupidity astounds me.’ Glass houses, my friend. Courtesy costs nothing.

          1. Edward2
            January 28, 2014

            You forget to allow for the very favourable tax treatment on offer for non doms which makes the UK a very attractive place for the world’s very rich.

  22. Peter Stroud
    January 26, 2014

    When I read that Ed Balls was going to make a speech outlining new Labour economic policies, I was a little worried. I thought there just might be some new ideas, that could sow seeds of doubt about the chancellor’s plans. Something new, that the government had missed. I need not have worried: we heard nothing but stale, Old Labour, class war proposals. Surely voters wii not be fooled again.

  23. Max Dunbar
    January 26, 2014

    The autonomic nervous system, or involuntary nervous system, is part of the peripheral political system that acts as a control system functioning largely below the level of consciousness and controls the visceral functions of hatred of the Labour Party.
    In other words, an increase in this particular tax rate by Labour is entirely mindless and involuntary requiring no thought whatsoever.

  24. Antisthenes
    January 26, 2014

    The insanity of the left is here to stay as the majority of the people of the UK have a vested interest that it should. Disproportionate redistribution of wealth and socialist policies and practices has brought about a situation where more are dependent on the state than are not. This of course is a very unhealthy situation that will in the long run lead to impoverishment economically and socially and will eliminate democracy. The gravy train of government largess will not be allowed to be derailed on the express wishes of the people so all political parties have no option other than to promise to keep it moving whatever the cost. The left of course will do it willingly and therefore will be more attractive to the electorate than the right because they do it reluctantly. This gravy train one day will hit the buffers and when that happens depends on who occupies no 10 the most if it is the left then it will be sooner if it is the right it will happen less quickly but even they will not be able to avoid it because as much as they apply the brakes the people will stop it being properly engaged.

  25. NickW
    January 26, 2014

    The defining feature of socialism is that it takes money off the people and gives it to the politicians.

    Look at Blair, and Brown and how they profited from their avowed socialism.

    Look at Hollande’s lifestyle compared to the French unemployed.

    Look at the lifestyle of Barroso, and Van Rompuy and compare it with that of the unemployed in Southern Europe and the tens of thousands of households in Spain and Greece with no income.

    Look at the leader of North Korea, with more palaces than he knows what to do with and widespread famine in his country.

    And come to that, look at Miliband, and compare his wealth and lifestyle with those on the minimum wage.

    Imposing socialism on other people is a very profitable business, but it does not pay those who vote for it.

    1. uanime5
      January 26, 2014

      The defining feature of socialism is that it takes money off the people and gives it to the politicians.

      As opposed to capitalism, which takes money from the poor and gives it to the wealthy.

      I also noticed in your comparisons of politicians to the unemployed you forgot to compare Cameron’s and Osborne’s lifestyles to the UK unemployed.

      1. Horatio McSherry
        January 27, 2014

        The difference is capitalism (if you’re going to treat it as a person) doesn’t pretend it’s going to do wonderful things with other people’s money – Socialism does. Socialism takes money from everyone with the promise of making the lives of the poor better, but with absoltuely no intention of following through with that (and never has). Capitalism does not take from the poor and give it to the wealthy; it takes it from one person and gives it to another (whoever they may be) in return for goods or services for the mutual satisfaction of two willing parties.

        As even Tony Benn said, he hated everything about Thatcher but admired the fact that you always knew she would do what she said she was going to do.

        1. uanime5
          January 27, 2014

          Socialism does make people lives better by providing thing such as healthcare and welfare. By contrast given the increase in income disparity in the UK it seems that capitalism does make the rich richer and the poor poorer.

          1. Horatio McSherry
            January 28, 2014

            Healthcare isn’t the sole bastion of Soclialist states, and as we saw under the last government welfare became more than a safety net; it became a lifestyle choice where low-paid workers were made to pay more (remember the removal of the 10% tax band and the hike to 20%?) for the bone idle.

            Also, the gap between rich and poor got bigger under the last government. Not very socialist that, is it? (Funny also how the cabals at the head of Labour and Trade Unions are paid vast sums of money by the lowest paid workers. Again, not very socialist that, is it?)

      2. REPay
        January 27, 2014

        How big should the state be??? It already takes 50% of GDP! If you pay 50% tax and are employed you are paying 61% tax…

        The argument that high taxes discourage tax revenues is widely accepted. Labour is not interested in facts, only a desire to bash the rich, even if it hurts the poor. I agree that some senior people in business are overpaid – they rob the shareholders, not society, to whom they pay stonking amounts of cash. Get over your envy!

        1. uanime5
          January 27, 2014

          The argument that high taxes discourage tax revenues is widely accepted.

          Weasel words. By whom is it widely accepted and based on what evidence.

      3. peter davies
        January 28, 2014

        Capitalism (I don’t mean crony capitalism) is about providing goods or services people need or want at the right price and quality.

        I suggest you go back to school

      4. peter davies
        January 28, 2014

        I don’t think Cameron and Osborne got rich on the back of politics – I thought they were posh wealthy boys before they came into politics which I don’t have a problem with.

        The problem I have is with the legions of the “In it for yourself” politicians who have got wealthy on the back of their jobs in politics that would never have got the same in the real world

      5. Lindsay McDougall
        January 29, 2014

        Capitalism takes money from the poor and everybody else and creates surpluses. These do not all go to the rich. The surpluses are called profits. Some are reinvested and some are distributed to shareholders for them to reinvest. Profits are essential because they are what make capitalism tick. Investment leads to more consumption and better ways of doing things. No doubt this is why Socialists try to destroy profits by freezing prices.

        While we are on this subject, if our energy companies comprise a failed market, what do you call our benighted, catastrophic National Health Service?

    2. peter davies
      January 28, 2014

      You forgot Kinnock and Mandelson – Done very well by the looks of it. Both speak up strongly for the EU in HOL of course etc ed.

  26. Paul
    January 26, 2014

    The tax rate for the top earners should be 40p. Labour knows this deep down because they set the rate at 40p for the 13 years they were in office. For political reasons they raised it in their last dying days and for political reasons are doing the same tired gestures now. They have no interest in making this country stronger or more competetive in any way. They just want power. Of course the rich should pay more and bear the greatest burden in these tough times but such simplistic and populist ways always fail. However, for the Conservatives to cut the rate so quickly after taking office was a mistake. They should have raised the income tax threshold substantially to begin with, along with other friendly measures such as the freeze in fuel prices etc, to show they are on the side of ordinary people and then cut the 50p rate much later on while explaining clearly the reasons for doing so. They didn’t do that obviously because they are led by Cameron and Osborne – two out of touch silver spooned multi-millionaires who have never had to work hard for anything in life.
    Reply They did exactly as you recommend, raising the tax threshold substantially and delaying the cut in top rate for the first 3 years As a result we collected a lot less revenue from the rich. Ministers do regularly remind Labour that the Coalition’s rate of tax on the rich has always been higher than the rate Labour charged for practically its whole time in office.

    1. uanime5
      January 26, 2014

      For political reasons they raised it in their last dying days and for political reasons are doing the same tired gestures now.

      Raising taxes to fund a Keynesian stimulus after the 2008 crisis is economics, not politics.

      1. REPay
        January 27, 2014

        A slight misunderstanding here…it was hugely political, and widely acknowledged as so being!

        Keynes could never have imagined the massive overspending and overborrowing of the Balls/Brown years, or our ponzi scheme public sector pension schemes! So drag him into the argument.

        1. uanime5
          January 27, 2014

          A slight misunderstanding hereā€¦it was hugely political, and widely acknowledged as so being!

          Acknowledged by whom and based on what evidence?

      2. Edward2
        January 27, 2014

        Uni
        I think you know it really was a tactical political move as soon as they thought the election was not going to go their way.
        The aim was to make it difficult for any incoming Government to reverse the decision without people like you endlessly shouting “tax cuts for millionaires”

        1. uanime5
          January 27, 2014

          I think you know it really was a tactical political move as soon as they thought the election was not going to go their way. The aim was to make it difficult for any incoming Government to reverse the decision without people like you endlessly shouting ā€œtax cuts for millionairesā€

          So you’re claiming that Franklin D Roosevelt raised taxes after the Great Depression because he thought he was going to lose an election, rather than because he needed money to provide an economic stimulus? If not then your argument doesn’t work.

          1. Edward2
            January 28, 2014

            We were talking about 13 years of Labour where for 12 year and 9 months a 40% top rate was deemed ok by all their supporters.

  27. uanime5
    January 26, 2014

    Unfortunately, the opposite is the truth. A 50p tax rate will raise less revenue from the rich, so those on lower incomes will have to pay more.

    Given that the 50% tax rate raised over Ā£1 billion in tax revenues it’s clear that it was the rich who paid more, not the poor.

    Self assessment Income Tax fell from Ā£21.7bn in 2009-10 (after the crisis) to Ā£20.6bn last year.

    What about PAYE income tax during this period? Funny how you never mention how it was affected by the 50% tax rate.

    It is forecast to surge to Ā£27.4bn in 2014-15 with the lower 45p rate.

    Actually this is due to the economy growing, which is why the growth in 2013 happened before the 50% tax rate was cut.

    Numerous high earners left the country to avoid the 50p tax rate when it came in, meaning lower income taxpayers have to pay more.

    Care to provide some evidence to back up this claim. I can’t recall any companies being unable to fill vacancies for jobs that paid over Ā£150,000 per year.

    I trust you’re not going to rely on income tax figures during the period when the 50% tax rate was in force as these figures also showed a fall in tax revenues from people who weren’t affected by the 50% tax rate (such as those earning Ā£100,000).

    The Sunday Times provides other figures which show a surge in tax revenue at the lower 45% rate, from Ā£41 bn under the 50p rate to Ā£49bn now.

    Did they also mention that tax revenues across almost all income bands were lower when the 50% tax rate was in effect due to the economy stagnating?

    There has also been a sharp increase in the number of people earning more than Ā£1m now in the UK, from 13,000 at 50p to 18,000 at 45p.

    How much of this was due to a reduction in the 50% tax rate and how much was due to the economy recovering? I trust you’ve analysed all the factors rather than simply picked the one you like the most.

    In conclusion attributing an increase in income tax to the wealthy being given a tax cut, while ignoring the increased economic growth during this period is bad form.

    1. Edward2
      January 28, 2014

      “In conclusion attributing an increase in income tax to the wealthy being given a tax cut, while ignoring the increased economic growth during this period is bad form.”

      The real bad form is you forgetting you have been predicting no growth, higher levels of unemployment and a reduction in tax revenues from the rich as a result of the 5% reduction on here for years.
      And you have been proved wrong on all of these economic predictions.

  28. Wireworm
    January 27, 2014

    The assumption is that if people only understood that rates above 40p mean a lower tax take, they would accept a 40p maximum. But they aren’t as rational as that. They believe in ‘fairness’, which trumps any economic argument. They want to clobber the rich by any means available and don’t care about the consequences. It’s what they learn in school after all.

    1. uanime5
      January 27, 2014

      The assumption is that if people only understood that rates above 40p mean a lower tax take, they would accept a 40p maximum. But they arenā€™t as rational as that. They believe in ā€˜fairnessā€™, which trumps any economic argument.

      I’d say its more to do with people wondering why a tax cut for the wealthy is good for the economy but a tax cut for them is bad for the economy. After all Minister never talk about cutting the 40% tax rate to increase tax revenue.

  29. Roy Grainger
    January 27, 2014

    It is rabble-rousing “punish the rich” stuff which ignores the fact that, for instance, more than 4000 NHS doctors earn more than Ā£150,000. Why do Labour want to punish them ?

    1. REPay
      January 27, 2014

      I know quite a few doctors who know they are now overpaid and have ridiculously well-funded pension so they will be OK with this! When Patricia Hewitt bloated their pay packets a few years back three consultants that I go shooting with said they would be working less for the NHS and shooting/playing golf or working in the private sector more. I think they will be OK with paying more, but they are not wealth creators!

  30. William Long
    January 27, 2014

    You state the case against high tax rates cogently. Unfortunately we have never had such clarity from Messrs Osborn or Cameron. They took a lot of persuading to drop the 50p rate and made no real opposition to it when it was first introduced; neither did they to the equally iniquitous withdrawal of personal allowance on incomes over Ā£100k. My conclusion is that the present team are no more wedded to low taxation than Mr Balls but only to what focus groups tell them might win votes.

  31. Bazman
    January 27, 2014

    The latest figures show that those earning over 150k paid almost 10 billion more in tax in the three years when the 50p tax rate was in place than when the government carried out its assessment in 2012. You think it acceptable to cut the wages/benefits for the poor of which most work full time, but not to tax the rich more? Only about 1% pay the top rate and any threats to leave should be called.

    1. Edward2
      January 27, 2014

      Baz
      In the first two months after it went down to 45% an extra 1.3 billion was received by HMRC who say overall the lower rate will bring in more money
      So if you want to tax the rich even more then the lower rate is the way to do it.
      The increase you talk about was due to economic improvement after Labour were kicked out of office

      1. Bazman
        January 29, 2014

        One or two months of tax take which was held back to save tax is not a real analysis. What opponents of the Balls tax hike have failed to grasp is that 95% of British taxpayers will never get anywhere near paying the top rate of tax, and so are more inclined to believe that those with the means to pay more should do so. If weā€™re ā€œin this togetherā€ then the deeds must fit the words. Itā€™s not good enough to slash support for the working poor and call it deficit reduction, whilst lambasting modest tax rises for the ultra-rich as class war. What many Tories wrongly believe is that because most want to be super-rich, they also want the super-rich to pay lower levels of tax. Such a position is delusional and what the Tories are doing is defending their base and most importantly their donor base. But the very fact that they consider the top 1% of earners to be their base shows what a daft position the Tories have got themselves into on earnings, tax and wealth.
        Toodle pip an all that.

        1. Edward2
          January 29, 2014

          If you want gesture politics to play to the crowd and to gain votes then fine carry on, but if you want to try to bring in more revenue then a lower rate will do that.
          As one commentator said “it may be good politics but its bad economics”
          And on my to do list is an increase in the starting point for paying income tax so that those on minimum wage do not pay tax and a reduction in the rate of capital gains tax which most economists say would increase revenue.

          1. Bazman
            January 29, 2014

            Read what I wrote this increase in revenue is not a done deal by any means and and gesture politics is trying to blame the working poor for the banking crisis. Million have been effected by the VAT rises, benefits cuts and the bedroom tax all to save very little if anything after the mess has been sorted out.The rich are made to pay 5% more and it is a disaster for the country. Won’t wash.

          2. Edward2
            January 31, 2014

            “gesture politics is trying to blame the working poor for the banking crisis”
            Baffled by that comment Baz. Who said that?

            “The rich are made to pay 5% more and it is a disaster for the country”
            Not a disaster just a rather poor advert for UK plc as being open for business and encouraging to international companies thinking of investing here.

            We need lower taxes generally especially the starting rate level. And I agree that VAT at 20% is far too high.
            When it first came in we were promised it would always be a simple single figure rate tax.

  32. peter davies
    January 28, 2014

    I know its not quite straight forward due to lack of growth when it was introduced but do you have the time to provide closer scrutiny of the higher 50% rate figures? This needs a closer look at the PAYE figures as well as self assessment to give a more comprehensive picture.

    With Mr Balls and others banding figures like Ā£10Bn around it surely is worth looking at.

    What the politics of envy often miss is that if you take more off the rich (in addition to the fact of them finding ways to hide or delay their income) they will likely spend less overall thus meaning less VAT receipts – Labour know this deep in their hearts, it seems they are clutching at straws because their other arguments on cuts have been shown to be flawed and therefore need to create a target group to mobilize their sheep.

    If they think a tax rise will work, why not follow Hollande’s example and go to 75%?

    Anyone under any illusion as to the outcomes of socialism need look no further than what Hollande is doing in France (and he hasn’t even been in power that long) – on the surface before there was little difference between Labour and the Tories, the gap looks a lot wider now.

    Reply The article includes the 50p figures.

  33. jon
    January 28, 2014

    I think the effect of the tax increase is not put across as well as it could be. Yes I am disappointed that media commentators don’t point to the reduction in revenue but its the focus on potentially that individuals would move country that does not reflect the reality.

    London attracts many international firms to base there, a lot are not UK firms. The jobs they often provide are high skilled and paid. They move to another country because of numbers on a spreadsheet these days in this economic global world. The reason why they act on that and move country is because of people like us who have pension funds and are therefore shareholders. The fund manager wants to retain us investing our pension in their fund so puts pressure on the companies to deliver dividents and share prive increases. Its not that an individual worker will move country because of a tax hike its that a big high end international company with hundreds of high earning positions will site in another country and thats where those jobs go. Some employees may follow it but its those bulk losses of high earning jobs that cost.

    The focus on the individual to the public I think would just make them think if those few people want to emigrate to a lower income tax rate then thats fine. What isn’t put across is that its a whole firm that moves and all the jobs with it all be it only a few will emigrate. We demand it, our pension fund performance we want puts the pressure on. Its wholesale high end job losses moving to America, Germany, China and Hong Kong.

    I don’t think that the public outside of the City understand from how its put across that one of these internationals moving could be the tax revenue lost that pays for the annual upkeep of a large hospital. Its not about one individual who will move his family abroad deliberately to avoid and extra 5% tax.

    1. Bazman
      January 31, 2014

      Many of these large foreign owned companies are making their profits in Britain and quite often by profiteering from the British, so where exactly are they going to go and you are seriously telling us they are only here for a low tax regime and no other reasons? Not real and don’t forget we do not respond to threats do we?

      1. Edward2
        January 31, 2014

        But they don’t make threats Baz.
        They just quietly decide to move somewhere else taking their best highest paid staff staff with them and set up somewhere else where the overall environment is better. Tax isn’t the only criteria but it is an important one.
        It isn’t just greed for money but the need to remain globally competitive and survive.
        If you operated in one country with a low tax regime and I operated in the same market area as you, but in a country with a high tax regime, guess which one of us is going to succeed long term.

  34. petermartin2001
    January 31, 2014

    A 50p tax rate will raise less revenue from the rich, so those on lower incomes will have to pay more.

    So you are saying that to get more tax revenue from the rich they will need to have a lower rate? And, unless, that happens those on lower incomes will need to pay more?

    So does the same logic apply to the less affluent too? If that is necessary, will income tax rates be reduced at the lower end of the scale too? The guy who normally mows lawns for cash-in-hand would then feel duty bound to declare his income to the taxman, I suppose would be the argument.

  35. Matt
    February 4, 2014

    John, the extra revenue at 45% was because many people delayed dividends and bonuses until after the rate went down again.

    The rich are getting richer and that’s why they are paying more tax. It’s nothing to do with the rate of tax. If it was 50% you’d get 10% more money in tax from them. And rich people only get rich by selling goods and services to the 99% so they don’t, as such, “make” money, they merely derive it from the spending of others; therefore they only get rich by making everyone else a little bit poorer.

    Prices have been going up by 3%; wages by 1% – and the difference is extra proft for the 1%.

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