Report: Two-thirds of Millionaires left Britain to avoid 50p tax rate resulting in billions in lost revenue for UK government
**Written by Doug Powers
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.
(h/t Free Republic)
**Written by Doug Powers
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