Friday, February 24, 2012

England Raises Top Marginal Tax Rate And Collects Less Tax Revenue

From "David Cameron's Tax Lesson: A 50% tax rate yields less revenue than advertised" in The Wall Street Journal:
Preliminary figures out this week show that Britain's 50% top marginal income-tax rate may have reduced tax revenue from top earners by as much as 5%, compared to the old 40% top rate. Tax revenue from those filing self-assessments due January 31 was down some £500 million versus last year.
So this January's numbers are a first look at the effect of the 50% tax rate, put in place by the previous Labour government in its last days and kept there by the Tory-Liberal Democrat coalition headed by Mr. Cameron.

That tax hike was the first increase in the top marginal rate in Britain (which kicks in at £150,000 a year) since then-Chancellor Nigel Lawson cut it to 40% from 60% in the late 1980s.

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