Britain: Should the rich pay higher taxes?

Under the budget announced by Chancellor of the Exchequer Alistair Darling, people earning more than about $220,000 will have a tax rate of 50 percent.

There is a “gaping black hole in Britain’s finances,” said George Pascoe-Watson in the Sun. Under the budget that Chancellor of the Exchequer Alistair Darling announced last week, Britain will have to borrow more money in the next two years than all previous British governments put together, adding more than $1 trillion to our national debt. Darling said he had no choice but to raise a whole slew of taxes. His proposal would “hammer” those earning more than about $220,000 by raising their top tax rate to 50 percent. Those earning less would see many of their most cherished tax breaks abolished. All of us who drive cars would be “pummeled” with a sharp rise in the gas tax, while drinkers would see taxes on booze go up. All told, “in a bid to claw back cash,” the new budget would punish the average family with nearly $1,500 a year in additional taxes.

But it’s the wealthy who’d be hardest hit, said the composer Andrew Lloyd Webber in the Daily Mail, and that’s bad news for everyone. For successful artists and entrepreneurs who are self-employed or who employ others, the top tax rate could be even higher than 50 percent because of additional taxes that employers must pay. These people, “part of the wealth-creation engine that has helped power Britain’s economy,” will have little choice but to go live abroad somewhere where they can use more of their earnings to invest in their businesses and create more jobs, rather than bestowing it on a profligate government. We will see “the inevitable exodus” of the very talent “that can dig us out of the hole we find ourselves in.”

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