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