UK's new 50% tax rate results in lower revenue.
50p tax rate 'failing to boost revenues’
The amount of income tax paid fell sharply last month in the first formal indication that the new 50p higher rate is not raising the expected amount of revenue.
The Treasury received £10.35 billion in income tax payments from those paying by self-assessment last month, a drop of £509 million compared with January 2011. Most other taxes produced higher revenues over the same period.
Senior sources said that the first official figures indicated that there had been “manoeuvring” by well-off Britons to avoid the new higher rate. The figures will add to pressure on the Coalition to drop the levy amid fears it is forcing entrepreneurs to relocate abroad.
The self-assessment returns from January, when most income tax is paid by the better-off, have been eagerly awaited by the Treasury and government ministers as they provide the first evidence of the success, or failure, of the 50p rate. It is the first year following the introduction of the 50p rate which had been expected to boost tax revenues from self-assessment by more than £1billion.
I guess Thatcher and Reagan were right.
If you want more revenue, you've got to do three things: (1) simplify the tax code, (2) broaden the base (meaning a less progressive code where the bottom 50% actually pay
something in income tax), (3) improve the economy (in part by fixing the tax code, but also by setting a more pro-business agenda). Oh, and we'll almost certainly need to elect Republicans to the Senate and White House to accomplish this, so I guess that's four things.
