That 50% tax rate…
The new ‘super’ rate seems to be taking up most of the headlines.
As I said earlier, I think it is just that higher earners pay their share and I think, politically, it is the type of issue I want to fight on.
Doubtlessly the research from the IFS saying it won’t raise much cash will feature prominently from Tories over the next few days.
Working out the likely behaviourial effect from proposed tax changes is a very hard task. Obviously a higher tax will lead to more people trying to evade it.
So, we need to focus on improving tax collection and make evasion harder.
As to the issue that ‘high earners will simply leave the country’… Will they really? Obviously the ultra rich (Philip Green, the Barclay Twins, etc) already have (Monaco mainly). But those earning £150-300k? That mainly work in finance in London? Where will they go?
I know people that earn that much, and they don’t vote Labour!, and I can’t imagine most of them uprooting their lives, moving their kids to a new school and heading off to Zurich or Singapore. I might be wrong. How many people will actually leave? As opposed to just threatening to leave? Seriously.
I will say, for the third time in recent days, we can’t pay back all of this debt by ‘taxing the rich’. But the rich should pay their fair share.
We’ve got a year until this tax comes in. Let’s beef up HMRC’s evasion teams. I imagine there are a fair few unemployed accountants and lawyers we can hire.