The United Kingdom is finding out that high taxes doesn’t always equate to the coffers of government overflowing with money. The newly implemented tax rule, similar to the proposed “Buffett” rule in America, is proving to be a failure.
According to the Daily Mail:
The controversial 50p tax band is ‘not working’ and revenues have fallen since it was introduced, new figures suggest.
They appear to show the wealthy are finding ways to dodge the tax band levied on incomes of more than £150,000.
In January, the tax take from those who do self-assessment tax returns collapsed by more than £500million, compared with the same month in 2011. They fell from £10.86billion to £10.35billion.
The figures have been eagerly awaited by George Osborne as they provide the first evidence of the usefulness of the tax rate.
This is because January 31 was the deadline for all self-assessment forms to be filed for 2010-2011, the first full tax year since it was introduced.
The Centre for Economics and Business Reseach said it provided evidence that the 50p tax rate may be starting to hit receipts.
The figures will add to pressure on the Coalition to drop the levy amid fears it is forcing entrepreneurs to relocate abroad.
Add this to the mountain of evidence that boosting tax rates on the wealthiest is not a solution to solving the out of control deficits that government rings up.
Instead of creating a system where people head for the hills instead of paying the taxes while the government rings up the debt with the false hope of all sorts of new money rolling in, these people begging to pay more taxes should just make the donation to the Treasury. As Governor Chris Christie put it, “Just write a check and shut up.”
