Why Cameron should ditch the 50p tax rate

When justifying his decision to keep Gordon Brown’s 50p tax for the super rich, Cameron has recently taken to saying that the well-off must “pay their fair share”. This is worth closer examination. The richest 1% in Britain contribute 24 percent of all income tax collected – it is unclear whether Cameron regards this as “fair” or not. But if he wants it to rise, then it is clear what he should do. Data released last week from America, and picked up by the smarter economics bloggers, gives us a striking example. If he wants to soak the rich, cut their taxes.

This US data shows that the richest 1 percent contribute 40 percent of all tax collected. And zoom in on the richest 0.1 percent and they contribute 20 percent, up from 16 percent when George W Bush was first elected president. The old rogue managed to squeeze the rich until their pips squeaked with tax dollars.