Tuesday, September 13, 2011

Maybe There Won't Always Be an England

The debate about high tax rates for the rich isn't confined to America. England already taxes earnings over £150,000 (about $240,000) at 50 percent. How's that worked out? Well, 20 "high-profile" economists signed a letter printed in last week's Financial Times:
[W]e are concerned that Britain’s 50p income tax is doing lasting damage to the UK economy. It gives the UK one of the highest personal tax regimes in the industrialised world, making it less competitive internationally and making us less attractive as a destination for both foreign investment and talented workers.

The UK has already slipped from second to fourth place as a destination for inward investment. It punishes wealth creation by imposing on entrepreneurs and business people a marginal tax rate in excess of 50 per cent once national insurance contributions are added in. This is particularly damaging when the UK needs to create new businesses in new industries and promote growth by small companies, which  can  grow fast. . .

We call on the government to drop the 50p tax at the earliest opportunity as part of a package of measures to stimulate growth. Only by returning to an internationally competitive tax regime will Britain enjoy long-term sustainable economic growth.
Sensible advice, but too conservative for the U.K.'s Conservative/Liberal Democrat coalition government--they've already rejected it.

4 comments:

O Bloody Hell said...

>> Conservative/Liberal Democrat coalition government

Emphasis added. Seems they're Widiots no matter what nation they're in.

Whitehall said...

Does the UK still allow companies to offer company cars to their execs as a tax avoidance compensation scheme?

When in the UK visiting a small manufacturer, the parking lot was filled with an assortment of very expensive cars! The CFO of this $1B USD company drove a Aston-Martin DB9, for example. That's a top car even here in Silicon Valley.

Carl said...

I remember that too, Whitehall--I may try to research whether that method of tax minimization still is part of the present "anarchy in the U.K."

Whitehall said...

I was too diplomatic to directly ask my hosts!