Britain’s new 50% tax band on incomes over £150,000 won’t bring in anywhere near the £7 billion forecast by their Treasury. Folks in this income range have the ability to structure their compensation in order to minimize the tax impact. Or they could just pull a Bono, and move to a more tax friendly climate.
Secondly, if you were close to the 150,000 pound income threshold, that extra couple of pounds of earnings could come with a pretty hefty tax bill. In short, if you’ve been beating your brains out working long hours to get ahead, the government has just repriced the labor / leisure tradeoff in favor of leisure.
Third, this generates a disincentive for investment in Britain. It does create incentives for those wanting to have a significant presence in the EU to migrate toward a country that appreciates economic growth and development.
For a country struggling with recession, Britain has just made their situation worse, by punishing hard work, rewarding leisure, and encouraging capital flight.
Apparently, not even London Sox anymore
Good job, Labor. Oh, and by the way, enlisting Rosie Scenario to writer your economic forecasts isn’t likely to help either.