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Will America Copy England’s Self-Destructive Class-Warfare Tax Policy?
Posted by Daniel J. Mitchell
After several posts about crazy decisions by the UK government, mostly involving extreme political correctness, it’s time to get back to basics and look at tax policy. A financial services consulting firm in London has just released a survey with the stunning finding that one-fifth of entrepreneurs are thinking of escaping the country because of punitive taxes — particularly the new top tax rate of 50 percent.
Here’s what Tax-news.com reported:
The poll of more than 300 entrepreneurs by business advisors Tenon also found that many more may follow in an attempt to escape the 50% rate of income tax, due to be introduced from next April on annual incomes above GBP150,000, with nearly half of the respondents (48%) still deciding what action to take. …Tenon points out that in the last month, high profile names such as the actor Sir Michael Caine and the artist Tracey Emin have threatened to change their tax residency to countries with more favorable tax rates. Popular locations for redomiciling include Monte Carlo, Guernsey, Liechtenstein, and the Cayman Islands. Andy Raynor, Chief Executive of Tenon Group, noted that entrepreneurs are showing their disapproval of the tax measures by “letting their feet do the talking.”
The mayor of London, meanwhile, is much less restrained regarding the foolishness of Gordon Brown’s class-warfare policy. Here’s what he has to say in the Daily Telegraph:
[T]he 50 [percent] tax rate that is beginning to drive these people away is a disaster for this country, and it is a double disaster that no one seems willing to talk about it. When Margaret Thatcher’s government cut the top rate of tax to 40 per cent in 1988, she was completing a series of reforms — beginning with the removal of exchange controls and followed by the Big Bang — that helped to establish London as the greatest financial centre on earth. Britain had been transformed from a sclerotic militant-ridden basket-case to a dynamic enterprise economy, and the capital became a global talent magnet. …So it is utterly tragic, at the end of the first decade of this century, that we are back in the hands of a government whose mindset seems frozen in the wastes of the 1970s.
By the way, I’m not picking on England. America is soon going to be making the same self-destructive mistake. Here’s my video on the broader subject of class-warfare tax policy.
Daniel J. Mitchell
cato-at-liberty.org |
