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Two Thirds of British Millionaires Leave to avoid 50p Tax Hike
5 years ago

As many clamor to jack up taxes on “the rich” in the US, here’s the latest episode of “Cautionary Tales from Across the Pond”:

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 50p 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 50p top rate will be reduced to 45p 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. [...] Far from raising funds, it actually cost the UK £7 billion in lost tax revenue.

In U.S. currency that’s over $11 billion in lost revenue because of a shortsighted attempt to bring in more revenue. France has seen a similar reaction to their tax policies.

In the U.S., the money shifting is underway in anticipation of increased taxes starting at the beginning of 2013.

It’s argued that even if the “Bush cuts” expire and taxes go up in the U.S., America’s rates will still be well below those of most European countries. However, U.S. policy should be to find ways to encourage those leaving countries with high tax rates to bring their cash to America. Instead the recommendations from the White House and congressional Democrats revolve around how the U.S. can more quickly resemble the places from which that money is fleeing. Bad idea.

5 years ago

It's obvious that this administration wants the tax cuts so that they can spend it.   They aren't the slightest bit interested in paying down the debt.

5 years ago

Diane, the post I had put up was so full of typos, must have been too late in the day.  Let me start again.  We will see the wealthy in the U.S. put more and more of their money into accounts out of the Country and why shouldn't they.  We will see more and more of our business leave the Country, and why should it not.  They accuse the Republicans of not knowing a thing about what is necessary for the financial recovery and for jobs to be created.  Well, I guess they are going to have to have it proven to them as they can't grasp that their plan has not worked and will not work.  We are going to see record layoffs as companies close.  And now Obama wants to drastically raise the limit on unemployment funds; wouldn't it have been better to lower taxes and allow jobs to be created so that people could WORK!

5 years ago

Raise limits on unemployment funds is very telling ---- he wants people dependent and not independent. 

5 years ago

Sheila, in this it is his lack of performance in getting the economy going and jobs being created as a result that has caused this.  He is using the only bandaid for this rather than resolving the problem.  These people have been those that held jobs and were willing to work, so they do need and deserve the help.  That is not the most upsetting, it is that he would rather as you say, keep them dependent on the government rather than allowing them to get back to work and remain independent.  He is so disgusting, isn't he.

5 years ago

The only reason Obama was elected in 2008 is because we have a young socialist leaning population in our country.   The democrats today are socialist leaning and are hell bent in changing America to a nanny state.    Of course Obama wants to raise unemployment benefits.   That's because he isn't interested in creating any jobs to put people back to work.   All he has to do is turn to the private sector, small businesses, and give them 5 years of security that their taxes will not be raised and they won't be charged a penalty if they don't have healthcare for their employees.    That is all he has to do.    But, he isn't interested in putting Americans back to work.

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