The last time a Conservative Chancellor was in the business of cutting taxes, he pointed out that they reduce the incentive to work, invest, and start a business. This was why Kwasi Kwarteng proposed to abolish the 45 per cent additional rate of income tax last year.
We really, really, shouldn’t have a tax system that can have a 68 per cent marginal rate, let alone a 20,000 per cent one
He was right about the impact taxes have on incentives, but he was wrong to focus on 45 per cent as the highest rate of tax people pay in the UK. In fact, there are millions of people paying a marginal tax rate (the percentage of tax you’ll pay on the next pound you earn) of more than 60 per cent. And hundreds of thousands pay much more. Some are even on a 100 per cent marginal tax rate, so that they don’t keep any extra money they earn.
Get Britain's best politics newsletters
Register to get The Spectator's insight and opinion straight to your inbox. You can then read two free articles each week.
Already a subscriber? Log in
Comments
Join the debate for just $5 for 3 months
Be part of the conversation with other Spectator readers by getting your first three months for $5.
UNLOCK ACCESS Just $5 for 3 monthsAlready a subscriber? Log in