Boris Johnson writing at the Telegraph: We should worry that Tracey Emin, Hugh Osmond and Michael Caine are fleeing the 50p tax rate
The 50p tax rate will be a disaster for the economy – taking us back to the dark days of the 1970s, says Boris Johnson.
It’s not because they may be celebrities; the reason to worry is that tax rates that high kill the spirit of enterprise. Capital moves to other, more business-favorable environments.
Johnson asks, why is the government raising tax rates to those levels, when they have already seen it didn’t work before?
It is nothing to do with the needs of the economy, of course. It is all about politics. This Government has spectacularly mismanaged the public finances. It has overseen an explosion in the wage bill of the state, to the point where the average public-sector worker now earns £74 more per week than a private-sector employee, as well as having much better pension and other entitlements.
Change the location names and you could be talking about New Jersey. Soon enough, and you’ll be talking about the US.
UPDATE
Samizdata:
As he says, many of those whose lives are shaped by the shrivelled, dog-in-the-manger philosophy of collectivism will not give a damn. So what, they will say? And in the Daily Telegraph article that Boris Johnson writes, you can read a goodly number of such dismissive comments, from the sort of cretins – I use the word without apology – who seem driven more by hatred of the rich than by a serious desire to improve conditions generally.
Yup.
Fausta, compare and contrast:
Hong Kong:
Corporate Tax-16.5%
Individual Tax-0-15%
Singapore:
Coporate Tax-17%(10% for specific industries)
Individual Tax-3.5%-20%
Sales/VAT Tax-7%(GST)*Now optional due to Singapore’s new duty free port.
United States:
Corporate Tax-15%-39%(Fed.) + 0%-12%(State)
Individual Tax-0%-39%(Fed) +0%-10.3%(State)
Payroll Tax-2.9%-15.3%(Fed.)
Sales Tax-0%-10.25%(State & Local)
Against these tax rates, the US is on the cusp of blowing out the US national debt with Healthcare, Cap & Trade, and a tsunami of financial and regulatory insanity. That’s all before you get to the massive payouts of the entitlement programs for the ‘Baby Boomers’.
As I write this, Singapore and Hong Kong are setting themselves up as hedge fund centers- regionally and globally not to mention changing their business model to serve as a refuge for the wealthy and their wealth. Furtermore, remember that the top 1% of Americans pay 40% of taxes. If that 1% leaves for a greener pasture, won’t revenue from income tax drop by 40%? What then? Singapore, Hong Kong, et al. don’t have to draw every HNWI(High Net Worth Individual)away from the US for it to have a deleterious effect upon the US economy and tax revenue.
If that 1% leaves for a greener pasture, won’t revenue from income tax drop by 40%?
I expect it would drop by a higher percentage, since they would take not only their personal fortunes but also would relocate their businesses. That would mean the loss of the income tax of the employees who get laid off here.