Ed Balls’ announcement that Labour will restore the 50p rate on those earning more than £150,000 is a “politically savvy manoeuvre”, but it is wrong economically, says The Independent on Sunday.
True, raising taxes on the rich is electorally popular: 60% of voters support it, according to a Survation/Mail on Sunday poll. But the reason the government reduced the top rate from 50% to 45% in 2012 was that, according to HMRC figures, the yield was “almost statistically insignificant”.
This view is supported by the Institute of Fiscal Studies (IFS), which says “the best evidence we have still suggests [...]
Want to read this article now?
Already a MoneyWeek subscriber? Please log in below.
Not a subscriber? Sign-up now for a 3 week FREE trial to get instant access.