Dally wrote:Osborne has been clever. Scrapped the 50p tax before it bit - people who could having brought forward income to before it was intrduced and now announced its future reduction, meaning people will defer taking income until it goes down.
And this is clever because?
Are you suggesting he simply wants to allow the rich to escape the effects of the 50p and 45p rates?
By the way, HMRC's own figures show £16bn - £18bn of income was taken early before the 50p tax rate came in and that cost the tax man £1bn. I guess we can expect similar figures when people defer their income as well so his "cleverness" will have cost about £2bn and that is before we consider what he would have taken in tax had he kept the 50p rate such that this kind of avoidance was no longer possible.
Quote:The tax will flow in just before the next election allowing him to give away to the masses. The interim austerity allows for radical anti-poor, pro-rich policy to be introduced. He'll then hope a few pre-election giive aways will allow re-election on the grounds that he's managed the economy so well that things are getting beeter. The great bonus is that they apparently have demonstrated that high tax rates don't work - by drop in revenue after introduction and increase after reduction. So even Labour will buy into the matra for another generation. Genius at piss-taking.
I don't see why the tax will flow in just before the next election. Rich people who have set up legal avoidance schemes have no incentive to shot them down just because the 50p rate has gone. They may as well save tax at 40% as 50%.
I have to say though Labour have been poor at dismissing the idea that the 50% rate was not effective. I watched question time the other night and Cable and Davies said this several times and it simply was left unchallenged for the most part.
It is obvious the two main justifications for scrapping the 50% tax rate are false. That it doesn't bring much money in and that those avoiding it will suddenly grow a conscience and start paying more tax now the rate has dropped are ridiculous ideas.
