David Prosser: The counter arguments on taxes for the rich
Outlook Two thoughts on the 50p tax rate argument. The first is that the data (for which I am indebted to the economist Chris Dillow) does not appear to support the arguments of the eminences who seem to think there is no bigger challenge for the UK economy today than cutting income taxes for the rich.
If our high tax rates really are so incompatible with attracting foreign investment and retaining talented workers, how come foreign investment over the past year has been no lower than its average over the previous decade – and how come the number of workers leaving the UK actually fell last year? Note, too, that the 2 per cent average rate of economic growth over the 22 years in which the highest rate of tax in the UK was 40 per cent was well below the 2.5 per cent achieved over the previous 22 years, when the top rate of tax went as high as 83 per cent.
Second, if you don't like the data, try this argument. It is true that lower tax rates may incentivise people to work harder. But they also increase disposable income, which encourages them to play harder too. Many economists believe the gains and losses in productivity may even cancel each other out.
- 1 Reader dilemma: 'Our son is 34 with an IQ of 85, and spends all his time in his room. What will happen to him when we're no longer here?'
- 2 Tunisia hotel attack: Locals form 'human shield' to protect hotel from gunman Seifeddine Rezgui
- 3 Russian officials ban yoga because it's too much like a religious cult
- 4 German ethics council calls for incest between siblings to be legalised by Government
- 5 Ginger Pride festival to take place next summer, organisers say 'time of bullying gingers is over'
Tunisia hotel attack: Locals form 'human shield' to protect hotel from gunman Seifeddine Rezgui
German ethics council calls for incest between siblings to be legalised by Government
People are American flagging their Facebook profile pictures in response to those rainbow flagging them
Ginger Pride festival to take place next summer, organisers say 'time of bullying gingers is over'
Historic meeting between Pope Francis and Russian Orthodox head 'getting closer'
The moment a Queen's Guard soldier lost it and drew his gun at annoying tourist
Greece crisis: The wider lesson is that it’s time to abandon this failed experiment in currencies
'I wish the BBC would stop calling it Islamic State' – David Cameron unleashes frustration at broadcaster
Pentagon accuses Russia of 'playing with fire' over nuclear threats towards Nato
They are neither a 'state' nor 'Islamic': Why we shouldn't call them Isis, Isil or IS
Tunisia beach attack: How can British Muslims respond to the latest outrages?
iJobs Money & Business
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...
£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...
Negotiable: Recruitment Genius: This extremely successful and well-established...
Competitive with monthly bonus: Guru Careers: We are seeking an experienced FX...