The 50% Tax Rate is Bad; Cutting it is Worse

The Guardian reports that George Osborne is going to cut the top rate on income tax from 50% to 40%. Cue much rejoicing on the Tory side of politics, especially from those who are likely to benefit from this tax cut. Assuming it happens, of course. Fraser makes the best case there is for this policy but it is still a terrible idea even if you admit the logic of Fraser’s argument.

And I do agree with Fraser’s logic! The 50% rate of tax does not appear to increase government revenue. It is, in my view, wrong for the state to take 50% (or more) of any pound earned. Keeping the super-rich in Britain – the people Las Vegas casinos call “whales” – is, literally, a valuable objective. And this too, Fraser may be right to argue that it is better to lance this boil sooner rather than later. I appreciate that argument even if I don’t quite agree with it.