Chancellor George Osborne is considering dropping the 50 per cent top tax rate for those declaring income of over £150,000. The TUC, amongst others, thinks it would be unfair to do so – pointing to wealthy people in the USA and Europe who say that high earners should pay high taxes.
Osborne claims that the 50p rate collects little tax and is a disincentive. The TUC suspects that the evidence for Osborne’s assertions is likely to be thin or lacking entirely. It fears a decision will be made before statistics on the amount collected are published in spring 2012.
The TUC response misses the mark. It’s not just about “fairness”, or making high earners contribute more. Workers do not need to be told that “we’re all in this together” is empty, or that the coalition government is increasing taxes on workers at the same time as cutting child benefit, tax credits and so on. Nor do many fail to grasp that the failure of the 50 per cent rate to bring in much tax is due either to massive avoidance or emigration by those who have no allegiance to Britain.
The TUC would do better to emphasise the real unfairness: that the product of our labour is shared with those who do not contribute. So-called wealth creators who might be frightened away by 50 per cent tax are in fact the opposite – parasites on the value created by workers. ■