This is the last day of the 50p tax rate. So I’m not a happy bunny at all.
In 2012 I estimated this should raise £6.7 billion in revenue if avoidance had not been given a chance to defeat it. And defeated it was. Perversely, businesses began behaving as if there was less incentive to remunerate their shareholders and key employees. Which is clearly immoral.
I have already shown that there is no Laffer effect when you remove the effect of people behaving immorally. Taxpayers should act no differently when the rate of tax changes.
Of course the whole tax has not been foregone. My personal campaigning forced George Osborne to begrudgingly make the cut only to 45p. Not the 40p which Gordon Brown spent 13 years struggling against the Tories to raise it from.
At this moment the justifications for this cut are threadbare, and will remain so for a long time to come.
As I’m a bit down, I probably won’t blog any more today. I had intended to publish an extract from the book I’m currently writing: Ten Reasons Why Tax Is Great. I was going to give you a sneak peek of how we can use tax to stop people doing undesirable things and encourage good behaviour by granting tax reliefs and the like.