In a letter to the Financial Times, twenty high-profile economists have urged the government to drop the top 50p tax rate, which they say is doing "lasting damage" to the UK economy, saying it should be axed "at the earliest opportunity" to boost growth. The 20 signatories to the FT letter include two former members of the Bank of England's Monetary Policy Committee, DeAnne Julius and Sushil Wadhwani.
The tax is paid at 50p for each pound earned over £150,000 and affects around 310,000 people. The previous government introduced the 50p tax rate on high earners - it was forecast to raise in 2010-11, in 2011-12 and in 2012-13.
Chancellor George Osborne decided to keep it in his first two budgets and Lib Dem Chief Secretary to the Treasury Danny Alexander said in July that anybody who believed abolishing the 50p tax rate was a priority was in "cloud cuckoo land".
Critics say cutting the top rate would constitute a "handout to the wealthiest in our society" which at a time of cuts would be "monstrously unfair" and would be"phenomenally immoral". Elsewhere in the world, wealthy individuals including France's richest woman Liliane Bettencourt and the US billionaire investor Warren Buffet have both said they would be happy to pay higher taxes.
Elsewhere the top rate of taxes are, for example,
Netherlands - 52%
Belgium - 50%
Germany - 45%
three of our top trading partners.
However the 20 economists argue that the tax rate makes is making the UK "less competitive internationally, and making us less attractive as a destination for both foreign investment and talented workers".
Personally disagree with the economists, afterall their insight was invaluable (not) in predicting the crash and subsequent recesssion and this looks like a personal enrichment attempt by them. Any other thoughts or comments.
i don't suppose these economists also published their annual salaries :twisted:
I view it at 'sprats and mackerels'.
Perhaps too simply. Who is to say.
Encourage the big players and wealth creators in to the UK economy to create much needed jobs. This will generate far more tax 'take' than will be the case by hounding out of the UK tax system the very people in whom the future prosperity of the UK lies - basically causing economic flight of wealth creators and a self-perpetuating climb in unemployment.
People like Buffet and Bettencourt are not (or no longer) wealth creators. In the case of Bettencourt, she offers to add 3% to her tax bill when in France the top rate of tax is 41% added to which there is a wealth tax with complex rules. There is also a maximum limit (cap) on what tax can be levied (50% of all income, including all local taxes too). The so called Bouclier fiscal is to be abolished for income earned from 2011 onwards (if Sarky gets away with it) but the threshold limits have been adjusted (upwards, of course) to compensate.
In the case of a multi billionaire like Bettencourt, it's pocket money! Most of it is probably in trusts anyway and she is a well known supporter of the UMP - the party the President belongs to and is thought to have bankrolled on more than one occasion (suggestions still abound in the Press about Sarky receiving brown envelopes stuffed with money at her parties). Her 'generous' offer is probably no more than an re-election ploy.
Curious that little or no evidence is ever presented to support the idea that high tax payers would/have/will leave the country in their thousands ??
Flat tax for everyone, that's my opinion.
Sir Stuart Rose, the former executive chairman of Marks & Spencer, said he would even be willing to pay more tax in order to help the national finances.
He told the BBC: "I don't think that they should reduce the income tax rate. How would I explain to my secretary that I am getting less tax on my income, which is palpably bigger than hers, when hers is not going down? If in the short term a case was made for me to pay more than 50% tax, which would help UK plc, I personally - Stuart Rose - would be prepared to pay more tax."
Someone on £300k can afford to lose 50% of it.
Someone on £20k can't afford to lose the basic 30%.
The percentages are one thing - but we should be looking at the remaining usable income.
If I was left with £150k in my pocket I wouldn't give a damn how much tax had been taken to get down to that figure.
"Bluefish2009" Surely some people earn what the employer feels they are worth to them?
or is it what the employer thinks he can get away with ??
i'll leave it to you to decide which catergory your employer falls into !!!!!
Never earned more than a pittance but I do agree with what Thatcher predicted, if you super tax the rich the rich take thier money elsewhere, to tax havens and off shore banks, they look at ways to regain the money they give to the taxman by cutting the number of employees they have or by raising the prices of thier products, bu investing less leaving thier money in those offshore banks, we all do the same. if our tax rate is raised we look for ways to make what we have go further and make cuts. We do it by necessity but they do it because they think the same about every penny they earn as we do about the smaller amount we earn.
It's a catch 22 situation, for every £100 I earn I pay £30 tax but for every £100 they earn they pay £50, so if I earn £1000 this month I would pay £300 in tax but they would be paying £500, the thing is when I earn £1000 for the month they earn £20,000 so they are actually paying £10,000 in tax, that is an awfull lot more than my £300, the last thing we can afford to do is drive away thier £10,000 I would rather them pay 30% ie £6000 a month because the alternative is to register businesses abroad, move companies to lower tax nations and bank in those aformentioned offshore banks so we end up not just losing the £10,000 a month they would pay but losing the £6000 they would pay if they were on the same tax rate as us. It would be nice to think that some of that £4000 a month tax saving would make them want to earn more and invest in British business.
The world is not fair but it is a real world we live in.
i presume that we can agree that somebody who studys at uni for five yeers and gets a degree in medicine, should earn more than a bus driver?
or should we live in a world where everyone earns the same no matter what job they do?
no incentive there for many.
Plenty of economists saw the crash coming and plenty of rich folk sold their assets before the crap hit the fan. As for the 50p tax rate, first it is just plain immoral for the state to take half of anyones income, second it raises next to no revenue at all and lastly it already means that multi national corporations are forming new departments or new teams in other countries rather than here.
It is a symbolic envy tax that raises no revenue at all.
