Will George Osborne scrap the 50p tax in next week’s Budget? Whispers to this effect have been getting louder, and now the Guardian is saying that it will come back down to 40p, and it makes a lot of sense. As I argued in my Telegraph column a fortnight ago, this is the perfect time to do it. Axing the tax paid by 1 per cent of the population will be unpopular with the remaining 99 per cent, so if Osborne is going to take a political hit he should do so now.
Anecdotal evidence of its harmfullness has been getting stronger: multinational companies saying they can’t persuade people to relocate to Britain, and early figures suggest a drop in tax from the rich in 2010-11. The Treasury review is a red herring — it’s impossible to disentangle the deterring effects of the 50p tax from the effects of the crash with such little data.
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