Two-thirds of millionaires leave Britain to avoid 50% tax rate

It is an undeniable truth of life that wealth, capital and labor go where they are treated well. It is this economic truth more than any other that prevents socialism, communism, fascism, and kleptocracy from yielding positive economic benefits in the long term.

When you raise the tax rate, people will modify their behavior to avoid paying the tax, even if that means halting economic activity. As Ronald Reagan said:

The Founding Fathers knew a government can’t control the economy without controlling people. And they knew when a government sets out to do that, it must use force and coercion to achieve its purpose. So we have come to a time for choosing.

UK Daily Telegraph

Almost two-thirds of the country’s million-pound earners disappeared from Britain after the introduction of the 50% top rate of tax, figures have disclosed.

In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs.

This number fell to just 6,000 after Gordon Brown introduced the new 50% top rate of income tax shortly before the last general election.

The figures have been seized upon by the Conservatives to claim that increasing the highest rate of tax actually led to a loss in revenues for the Government.

It is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes.

George Osborne, the Chancellor, announced in the Budget earlier this year that the 50% top rate will be reduced to 45% from next April.

Since the announcement, the number of people declaring annual incomes of more than £1 million has risen to 10,000.

However, the number of million-pound earners is still far below the level recorded even at the height of the recession and financial crisis.

Last night, Harriet Baldwin, the Conservative MP who uncovered the latest figures, said: “Labour’s ideological tax hike led to a tax cull of millionaires.

Far from raising funds, it actually cost the UK £7 billion in lost tax revenue.

“Labour now needs to admit that their policies resulted in millionaires paying less tax and come clean about whether they would reintroduce this failed policy if they were in power.”

Mr Osborne argued earlier this year that the 50% rate was deterring entrepreneurs from coming to Britain.

About Chuck Norton

Political issue strategist and communications professional. I write about politics, education, economics, morality and philosophy.
This entry was posted in Econ, Europe, Jobs, Stuck on Stupid, Taxes, True Talking Points and tagged , , , , , . Bookmark the permalink.

2 Responses to Two-thirds of millionaires leave Britain to avoid 50% tax rate

  1. I’m going to repost this because I think it is something that should be read by all Americans as well. We are preparing to raise taxes on our top income earners and people think they are going to just accept this with a smile. Thanks for a good lesson in recent history that America should learn from.

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