I won't be playing the world's smallest violin for those affected by the proposed 50p tax rate, and neither should you.
Predictably we’re hearing the same old line of argument from those who oppose Labour’s proposed 50p tax rate: the rich will only work if you give them money and the poor will only work if you take it away.
These God-like wealth creators are apparently so worried at the prospect of paying an extra 5 pence in the pound that they are planning to up sticks and move their families and their companies abroad (even though there is no evidence this happened when the tax was in existence in the last parliament), leaving the rest of us wallowing in some kind of socialist dystopia.
Really, though, cutting through the nonsense, Labour’s announcement yesterday that it will raise the top tax rate from 45p to 50p is about fairness.
In 2012, directors of FTSE 100 companies increased their pay by 14 per cent. This is 20 times the rate of increase experienced by the average worker – contrary to what the government claimed on Friday, average wages are still increasing at half the rate of inflation.
As Luke Hildyard of the High Pay Centre recently put it, most FTSE 100 directors aren’t risk-taking entrepreneurs, but bureaucrats who’ve taken over long-established organisations.
It’s ironic that right-wing commentators are talking about how little the 50p rate would supposedly raise – while at the same time defending regressive policies which raise far smaller sums.
George Osborne abolished the top rate of tax after claiming it ‘only’ raised £1bn. And yet, this is a chancellor who is happy to put some of society’s most vulnerable people under the cosh through measures such as the Bedroom Tax (supposed to raise £465m) and cuts to legal aid (supposed to raise £350m).
The 50p rate would raise significantly more than both these measures by any estimation. It is also worth noting that Ed Balls has said he will reduce loopholes that allow tax avoidance as well, so it’s likely the 50p rate will raise significantly more than it did the last time.
And finally, to argue against the increase because it will supposedly encourage tax avoidance is rather rich when at the first hint of public sector workers going on strike the same people are rarely shy of accusing the trade unions of “holding the country to ransom”.
I won’t be playing the world’s smallest violin for those affected by the proposed 50p tax rate, and neither should you.
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