November 29, 2012

Raise taxes to lower revenue.

Raise taxes!  That will end our budget problems!  Wait... Only raise it on the rich, cuz they have so much money!  That will end our budget problems!

Oh really? 

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.

This might sound like a quaint idea, but cut government spending across the board (do not JUST reduce the growth of spending and call it a cut).

The invention of the teenager was a mistake. Once you identify a period of life in which people get to stay out late but don't have to pay taxes -- naturally, no one wants to live any other way.
-- Judith Martin

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