50p tax rate: play the world’s smallest violin for the rich

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.

16 Responses to “50p tax rate: play the world’s smallest violin for the rich”

  1. jas

    as according to me it would be the fairer decision with 50p tax rate.. http://proxyrental.net/

  2. Jon

    Your argument seems a bit confused. Are you supporting the tax rise because;

    1. it balances the budget
    2. the threat of people leaving the country is idle
    3. ftse 100 directors aren’t entrepreneurs and so deserve to be taxed more?

    In response;

    1. £1bn won’t come close to balancing the budget – sorry to be the bearer of bad news! This is political theatre rather than economics let’s stop pretending.

    2. How do you know? If the top 1% pay 30% of all income tax and even a tenth of them leave that’s vital services that will have to be cut because Ed Balls was wrong about the “triple dip” and needs something to get him back in the game. He’s a busted flush and is betting the future health of public services for the sake of his own reputation. So the rest of us pay because he’s a vain little man who made a mistake? No thanks.

    3. So, is Ed Balls proposing to exempt entrepreneurs from the 50% rate? I hadn’t heard that nuance. Your point about risk taking is odd and irrelevant if not.

    It’s not about standing up to the rich, it’s about being rational as a society. We can’t afford to shrink our tax base any more. This kind of crap (and the energy price freeze) make Labour resemble student politicians protesting about everything and with grown up answers to nothing. Balls is Cameron’s best recruiting sergeant.

  3. Josh Ferguson

    You’re wrong. Not about the 50p tax, I believe that taking half of anybody’s income in addition to charging 20% on everything they buy, then telling them that in order to pick up their bins and fix the pavement down the road they will have to pay another tax is wrong. Not to mention taxes on just about everything else from car tax (supposedly linked to making up for the carbon emissions, though how that can be when green energy development is stagnation incarnate, is beyond me) to inheritance tax.

    You’re wrong about the rest. The tories were the ones who gambled the financial health of the country for political purposes. Of course they had a fall-back argument, ‘the entire global financial crisis was Labour’s fault’… so they could get away with slashing spending and waiting until the inevitable growth came (even if it’s no higher than population growth at present) and then proclaiming that their policies have worked and George Osbourne is an economic genius rather than the ideological buffoon he is.

    The rest of your argument is just as bad as the article, rabid party political extremism.

  4. neilcraig

    There is no question that when taxes rise the incentive to avoid them does too. Nor of the fact that when Thatcher brought down the rate the amount paid went up.

    No serious economist disputes that this rise is more likely than not to bring down the total collected and beyond that, that it is certain to act as a disincentive across the economy.

    Of course if the objective is to reduce the amount of money the rich have, and that this is a sufficiently desirable goal that reducing overall gdp is irrelevant then Labour will go for it – and clearly that is the case.

    If socialists were to believe society should maximise human wellbeing then they would set taxes accordingly, but obviously that is free enterprise – anathema to socialism.

    Still it does show socialism to be a meanspirited, hate driven, anti-progress belief system doesn’t it?

  5. Josh Ferguson

    ‘meanspirited, hate driven, anti-progress’, that’s a bit much. This isn’t a policy aimed at socialists, it’s aimed at low income, poorly educated workers. If you’re looking for someone meanspirited, look no further. For me, society shouldn’t be focusing on enabling everyone to live at the same standard, we should be focusing on helping everyone achieve their potential. Of course there needs to be a basic standard of living, but far too many people from poor backgrounds are not set up to be able to compete with wealthier people.

    There should be no private schools, it’s a farce that you can pay for your child to receive better education than others. How any modern society can allow children to suffer abjection on this scale is appalling.

  6. neilcraig

    Its aimed at low income the poorly educated (particularly in economics) to get their support. But it is aimed by socialist politicians and activists, of whom all those who know any economics (& how dare anybody who doesn’t claim the right to make economic decisions for the whole nation) know that this will not improve the living standards of the poor. They are the ones cynically engaged in meanspirited promotion of hate.

  7. Josh Ferguson

    Labour doesn’t have a monopoly on politically charged, economically foundless policies. You only have to look at attitudes from certain other parties towards immigration and the like. Those policies are targeting the very same people in the very same way.

  8. neilcraig

    No, opposition to immigration is targeted at the 6 bn people elsewhere in the world who could be economic immigrants.
    In fact immigration of poor and unskilled people drives down wages of poor and unskilled British citizens already here – precisely the “socialists” are aiming to deceive with their 50p tax rate. The boundless contempt Labour politicians have for their electors was well demonstrated by Gordon Brown.

  9. Jon

    Hi Josh, I’m sorry – how was the financial health of the country gambled by the Tories? Gordon Brown failed to save any money from the longest, most clumsily engineered boom in history – robbing unborn kids through a property boom and unsustainably low pension provision to keep his “end of boom and bust” mantra alive! We used to go on about the irresponsible Lawson boom – history will judge Brown far, far more harshly.

    Labour defended itself saying the bust was a global financial crisis and wasn’t their fault. But then they now lay the blame for the failure to recover from a crisis brought on by financial services cardiac arrest in an economy dominated by financial services at the feet of the people who were in opposition when the crisis was engineered, as do you?

    I don’t disagree with you about tax rates, and I’ve more or less abandoned any political allegiance (I’m actually so fed up with Balls and Milliband, I’m seriously considering voting Tory for the first time in my life!) so I don’t see that I’m rabidly political. Rabidly fed up, maybe.

  10. Josh Ferguson

    I agree, Labour did nothing to reduce the deficit under Blair/Brown but it isn’t reasonable to play the blame game every time a party comes to power ‘the last lot did something bad so we’ve got to do something equally bad in the opposite direction to make up for it’. The economy would have recovered a lot quicker had there been a slower reduction in public spending, the country is crying out for housing and the government couldn’t commission some building?? That’s capital spending, it would’ve helped the economy short term and public finances long-term, but they were so eager to make a statement that they threw the bath water, baby, neighbours cat straight out the bath and under a passing bus.

    Attributing the financial services fiasco to either party is difficult and roundabout. It was Maggy Thatcher who relaxed controls blah blah Brown pandered to square mile blah blah, the fact of the matter is that neither party actually did anything from the 1980’s onwards. Labour failed under Blair and Brown, that’s true, but having seen the mess caused by loosely regulated banks, the current administration hasn’t exactly pulled out all the stops to ensure it doesn’t happen again in the future either..

    Apologies for confusing your disenchantment for party fundamentalism.

  11. Josh Ferguson

    Why don’t you make an argument instead of just spouting emotive drivel? http://www.bbc.co.uk/news/magazine-25880373, there are various stats in there that can be used in relation to the whole argument but one of my favourites ‘EEA immigrants pay 34% more in taxes than they receive in benefits and services’. You’re saying that immigrants increase the supply of workers and so push wages down, true.. but you’re only telling half the story, immigrants still go to the supermarket, they still have leisure activities and this creates jobs which increase demand thus bringing wages back up.

    Besides, there are plenty of jobs which British people just won’t do. We don’t want to pick vegetables, we don’t want to wait tables etc. Everyone is very happy to go down to McDonald’s and get a burger for 99p but they don’t like the fact that the guy making it is from Romania.

  12. neilcraig

    Perhaps you could make up your mind if ” You’re saying that immigrants increase the supply of workers and so push wages down” is either “drivel” or “true” since you claim both, which is clearly ludicrous. Then you could apologise for whichever one you want to withdraw and we could have a serious discussion.

    Such a discussion could focus on some of the other studies which show that unskilled poor immigrants contribute rather less to the exchequer and get more in benefits than the average. Of course such studies do not get reported by the state owned (& “balanced” by law) BBC which either proves they are all valueless or that the state broadcaster is wholly corrupt totalitarian propagandist simply masquerading as a “news” producer.

    Incidentally does your claim of “drivel” also apply to my statement that the poor in Britain are not precisely the same people as the 6bn potential immigrants outside Britain?

  13. Josh Ferguson

    Well that’s a load of crap. If you are going to just pick half of what I say and misrepresent it there is clearly no point in discussing it, what I said is there to see. But just to clarify, I said it is half the truth, I told you the other half of the truth, but you have chosen to ignore it, the drivel is self-evident.

    Oh and feel free to link to these studies done by institutions as prestigious as UCL.

  14. neilcraig

    Only one here ignoring half of what I said and misrepresenting the rest is yourself, as the fact that you have wandered so far from discussing the 50p tax rate which the thread is supposed to be about.
    Now you have decided that even with misrepresentation (ie claiming there was no difference between poor British citizens and 6bn non-citizens), even on ground of your own choosing, you can make no serious case.
    I’ll agree with that, but that is the common intellectual bankruptcy of the pseudo-left.

  15. Josh Ferguson

    Very well. The half you are ignoring is that immigrants increase demand for other services and this in turn creates demand for more jobs pulling wages up (all this I said earlier). What you said is half true, but only an idiot doesn’t take in the whole picture, perhaps you fit this bill?

    I have no wish to talk about the differences between British citizens and non-citizens. You want me to confirm to you that they are in fact not the same? Yes, they are different, in that we have named ourselves one thing and them another. Well done, but I didn’t claim they were the same??

    I really hope you’re a troll because your arguments are just pathetic, I mean childlike. Good work on posting all those studies proving immigration is economically damaging btw.

  16. neilcraig

    No further reply needed.
    When a “debater” gives up answering debating points for personal rudeness they have proven the best arguments they can manage are childlike

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