More evidence this morning that the government won’t be dropping the 50p rate any time soon, in the form of an interview with Danny Alexander. ‘This is not the time to be looking to reduce the tax burden on the wealthy,’ he says to the Daily Telegraph’s James Kirkup and Robert Winnett.
This is a line that other ministers have deployed recently, and not just Lib Dems. And it suggests that the coalition is confident that HMRC’s forthcoming review of the rate will say that it does indeed raise revenue.
But the matter won’t end there. The IFS recently said of the HMRC review that, ‘tax records for just one year after the introduction of the 50p rate are unlikely to provide a robust estimate of how much revenue the 50p rate will raise’. So people will still question this tax rate’s efficacy, particularly as the IFS also reckon that it will raise less than the government is currently forecasting.
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