50p tax isn’t just hurting the economy, but Treasury revenues too

So where were these 20 economists when Gordon Brown first set the 50p trap for George Osborne? Then, Brown’s gamble was that the Shadow Chancellor was a political strategist with little interest or expertise in economics, so he’d be unlikely to work out just how much the 50p tax would lose the Exchequer, or guess it could be more than £3 billion a year – with further, less calculable damage on Britain’s reputation as a home for entrepreneurs.

This was when we needed those economists. At the time, all Osborne had to go on was the IFS which calculated it would cost £800m – assuming the rich were no more mobile now than they were in the 1980s. A ludicrous assumption, of course. What proportion of Britain’s super rich are immigrants? We have no data, which is why Brown’s trick succeeded. I’d estimate about half. Brown’s de facto strategy was to allow non-doms paying 20 per cent tax – this was what he believed yielded the most tax.