Britain’s Tax on Wealthy Caused ‘Massive Distortions’
21st March 2012
To dig itself out of recession, Britain hiked its income-tax rate to 50% for those making £150,000 or more. Proponents said the tax was needed to bring fairness to an economy, in which the rich were getting richer and not contributing enough to the cause. Critics said the tax would chase out the job creators.
As it turned out, the real impact was in tax avoidance. According to the Chancellor of the Exchequer’s budget announced today, the income-tax hike caused “massive distortions” that cost the government.
My, what a surprise. Aren’t you surprised? I’m sure surprised.
People move their money — and themselves — from high-tax jurisdictions to low-tax jurisdictions if they can. Rich people pretty much always can. As a result, taxes intended to ‘soak the rich’ not only don’t raise the revenue increases that bureaucrats predict under static analysis (‘we can do anything we want and they’ll just sit there and take it’), but don’t even get the revenue that they would have gotten under the old tax structure, because the income stream is entirely gone.
“No Chancellor can justify a tax rate that damages our economy and raises next to nothing,” he said.
But the Obamassiah can.
Raise your hand, anybody who thinks that the U.S. government will let this reality intrude on their liberal fantasies.
No, me neither.