Countdown to Millionaires’ Day

ImageIn just under 40 days 13,000 millionaires will get a tax cut from this Tory-led Government.

On the same day that millions of working families have their tax credits cut, millionaires will receive a giveaway worth on average £100,000. George Osborn has tried to claim that there is no point taxing wealthy people because they will find ways to avoid paying. But that’s an argument for more enforcement not shifting the burden on to the rest of us. In any event, Ministers have publicly confirmed here that billions would indeed be raised by keeping the top rate of tax at 50p, even taking account of “possible behavioural responses”. It is therefore a question of choices not necessity: do you go after hard-working families, struggling to make ends meet or do you ask those with the broadest shoulders to bear the greatest burden?

And that’s not what is happening at the moment. As Alex Andreou has pointed out here, taking account of all the different forms of tax, the richest decile pay just under a third of their income in tax, compared to the average which is just over a third. Increasing taxes on the wealthiest in our society isn’t the politics of envy, it is just being fair.

Ed Miliband and Ed Balls have announced what they would do differently in next month’s budget:

  • cancel the tax cut for millionaires and the raid on tax credits for working families;
  • bring back a lower 10p starting rate of tax to give 25 million people on middle and low incomes a tax cut, paid for by a mansion tax on houses over £2 million;
  • and take action to kick-start this flatling economy by bringing forward infrastructure investment, building thousands of affordable homes and boosting lending to small businesses.

Ed Balls says

This weekend we found out that the Government has even failed on its own test – keeping Britain’s AAA credit rating. But struggling families and businesses don’t need a credit rating agency to tell them this Government’s economic plan isn’t working.

The longer our economy stagnates, the more long-term damage will be done, the harder it will be to get the deficit down and the worse off people will be.

And with our economy flatlining it cannot be right to give millionaires a tax cut while making working families pay more.

To join Labour’s campaign against the tax cut for millionaires and for a One Nation tax policy, click here.

2 thoughts on “Countdown to Millionaires’ Day

  1. Fantastic, it will make all the plebs realise that they need to get their acts together, start working harder and stop living off the money of the rich!!! I am still waiting for a further reduction to 40p in the pound though and perhaps even further!! There is no reason the rich should have to pay more. Even with a flat rate of income tax the rich would pay more and that is wrong.
    The Labour Party who is always committed to helping the vulnerable should be happy with this. It will make Britain more competitive, hence more rich people coming to work and earn in the UK, thence in the long term tax revenues will raise, enabling us to help the REAL vulnerable even more. Its called the Laffer curve – People aren’t crazy why do they want to stick to a place where their money will be stolen from them and are constantly insulted by the nasty left? – Also if the UK has richer people then they will spend more, as they have an increased purchasing power, which will contribute to more growth in the British economy.
    Just let some people get filthy rich !!!!!!!!!! That’s life you have to accept that we are not equal, never have been and never will be !!!!
    I really look forward to the 6th of April 00:00 where the cut comes into place. I’m going down to the pub to celebrate that !!!!
    !!! STOP TAXING THE RICH !!!

    • Nice try, but the Laffer curve peaks at 75% so your argument is irrelevant. See http://www.leftfootforward.org/2012/03/memo-to-50p-tax-trashers-laffer-curve-peaks-at-over-75-per-cent/ for more detail. In the short term many of those to whom the top rate applied were able to shift income between years and this reduced the income from the top rate but as I say, this is a short term effect.

      Personally I would like to see a shift from income taxes to wealth taxes which removes the Laffer argument. This government is doing the opposite – it is going to help people buy a second home instead of taxing larger and second homes more fairly and building more affordable homes. It is taking benefits away from people who are struggling to make ends meet to give to the rich. This is the reverse of what is needed in this country as the share of national wealth that goes to the rich has increased massively in recent years. Do you have any evidence that this is because high earners have increased their productivity? I haven’t seen any. Top executives have been more effective at extracting value from companies which isn’t the same as creating value.

      We need to ensure that our economy rewards producers rather than predators. Yes this will mean disparity in income and wealth but also a more productive economy.

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