I actually got so annoyed over the use of the tax cuts for millionaires being a reason for less money being available for investment that I got off my fat arse on the sofa and plonked my fat arse on my PC chair and wrote a letter to the editor on it. Yes millionaires are getting a tax cut. That it obvious but a tax cut for them doesn’t automatically equate to less money being in the public purse. It really bugs me that people can’t get their heads around that basic principle of economics. If more people pay less then it can raise more than fewer people paying more.
Do I support a tax cut for millionaires? Well that depends. I think the main purpose of the higher tax rate is to raise the most people possible and if 45p is the magic number then good times. Tax isn’t there for ideological reasons. It is there to raise as much revenue for the public purse as possible.
So anyway I think it is fair to say that it got edited a fair bit so here is the full version below:
I am bored about this ‘tax cut for millionaires’ propaganda that Labour are pushing. I expect it in Westminster but when Labour Councillors such as Cllr. Gilbert and Cllr. Ware-Lane start throwing it around I feel as though someone needs to actually point out some of the basic mathematics.
You see paying tax at a higher level doesn’t necessarily equate to more tax revenue for the Treasury to spend on public services. In fact in this instance it firmly does not.
The fact of the matter is millionaires – due to the fact they are millionaires – can choose where to live far easier than most of us. If they decide that paying 50p tax is too much then instead of just paying it and moaning they relocate and leave the country meaning they pay no tax to HMRC instead.
Figures published at the time show that 6,000 people paid the tax rate when it was at 50p raising a total of £6.7bn in tax revenue. In the previous tax year when the rate was set at 40p we saw 16,000 people paying tax raising £13.7bn in tax revenue. Therefore the higher tax band raised £7bn less when it was set at 50p compared to when it was at 40p.
It isn’t rocket science. It is common sense and pretty basic economics but yet Labour pedal this lazy (but I grant you – rather effective) spiel. So the question these Labour councillors have to reconcile with is what the primary goal of the higher tax band is.
For me it is to get the balance right so that the most revenue as possible is raised. Seemingly for Cllr. Gilbert and Cllr. Ware-Lane it is to get tax rich people for being rich – even if it means less money for public services. It is an ideological thing.
Also another thing that galls me is that the Labour government kept the 40p higher tax rate for all but a few days of their 13 year dominance of the House of Commons. They raised it to 50p days before the 2010 General Election in what only can be described as a cynical ploy to gain votes and put the next government if it wasn’t them in a position where financially they had to cut the higher tax rate knowing politically it would be hard to justify.
I just thought it was time to throw in some maths into the mix to see if lazy propaganda actually stands up to it. In my opinion it is clear that it does not. Hopefully the two Labour councillors I’ve mentioned have learned something from this.