UK to cut income tax rate for top earners
16 Aug 2011
UK chancellor of the exchequer George Osborne confirmed this week that he wants to scrap the 50 per cent top rate of tax on high income earners because it is not raising much money.
The chancellor has earlier called the 50p rate, as it is known (since it amounts to 50 pence income tax per pound), ''uncompetitive'' and said there was ''not much point'' in having taxes that brought in little revenue.
The top rate of tax applies to people with income above £150,000 a year. That rate, introduced by the previous Labour government, was seen as a snub to the professional service and financial industries.
Osborne says it is unproductive as it adds little to the government's coffers, and worse, acts as a disincentive for high-earners to come to or remain in the UK.
In an interview during the weekend, he said the 50p rate risked driving wealth creators out of Britain at a time when they were needed to create jobs and boost growth.
The chancellor's intervention will cheer Tory backbenchers but anger senior Liberal Democrats, who believe cutting taxes for the poor should be the bigger `priority.
