Boris attacks 50p tax band as an "assault on London"

Boris Johnson's office has released a press statement condemning the 50p tax rate as "an assault on London".  Research by the Greater London Authority says that 145,000 Londoners will be hit by Darling's "banker taxes".  That 145,000 includes those earning £100,000 and affected by changes to allowances.

Boris Johnson believes that London already pays more than its fair share of UK tax revenues and is unhappy at this extra tax burden:

"Our capital is the engine room of the UK economy, generating 17% of the UK’s GDP each year and yet our figures show that the Government’s plans for high earner taxes will hit London four times harder than the rest of the UK. Penalising high earners with higher taxes could undermine London’s competitive edge. It runs the risk of driving highly skilled workers away from and deterring others from coming to our great city – which is a real concern to me."

Anthony Browne, Head of Policy in the Mayor's office, warned that the extra taxes could push higher earners to other countries without bringing in revenue for the Treasury:

"Far more than the rest of the UK, London has an internationally mobile workforce, and its success depends on being a global magnet for talent and business. Having a competitive tax regime is a key part of that, but we will now have the highest income tax rate of any major economy in Europe, or any global commercial centre. This new barrage of taxes on high earners comes on top of the government’s assaults on non-doms, which is also a largely London phenomenon. It sends out a message that high earners are not welcome, when they are not only welcome in London, but an essential ingredient in London’s success. This isn’t about defending the rich, but defending the economy. If high earners either stop coming here, start leaving, or simply work less, it would be a real setback for the London economy. The government will have achieved a real double-whammy – it will have failed to raise much extra revenue, and at the same time strangled the economy. The government must not kill the goose that lays the golden egg."

In this morning's Telegraph Mr Johnson implied that a failure to oppose the 45p tax band had encouraged Labour to introduce the 50p tax band: "If we keep schtum, they will simply do it again. Why not 55 per cent? Why not 60 per cent? Why don't they go right the way back to their childhoods, and start echoing Denis Healey's 83 per cent top rate of taxation?"

A YouGov poll for the Evening Standard finds the Conservatives 12% ahead of Labour in the nation's capital.

Comments

[resident leftie]

It's strange how these terrified bankers have cut their bonuses and upped their incomes by 12-15% in this "climate of fear", isn't it?

[joshuwahwah]

I think he might be concerned that his salary for his scribes in the Telegraph will be hit hard.

[alousy]

Boris Johnson is absolutely right. It is also a viscious attack on success, initiative, and the job creators made purely out of malice, spite, jealousy and class envy. The Conservative leadership should pledge to cancel it on their first day in office.

[Ross Warren]

"Why don't they go right the way back to their childhoods, and start echoing Denis Healey's 83 per cent top rate of taxation?"

Well yes some of us recall death duties of £1 and 1 shilling in the pound. So OK I suppose we should oppose the tax rise on principle. Trouble is that is excatly what Labour are hoping for, then they can say that we are the same old Tory's only interested in looking after the rich.
Rather than giving in to easy on this issue perhaps we would be better off encouraging the systematic ending of the tax loopholes and the off sea havens. Most of which are British in theory. So although I do understand the principle I cannot get to excited about this tax rise. The damage that giving the wrong impression to the general public is uncertain as yet, but it appears we are returning to our old habit of aiming directly at our feet, when they are not stuck firmly in our mouths. C- Boris not one of your most intelligent outbursts. Does Boris truly expect the majority of us to embrace austerity measures when clearly he is reluctant to pay his own way?

[Steve Green (Daily Referendum Blog).]

I hope David Cameron or someone on his team reads this comment thread. Yesterday was the first time that I have been disappointed with David Cameron. It was the first time that I felt he was dodging a question. On the TV yesterday he would not oppose the 50% tax, and he would not commit to scrapping it. It was the first time he looked like a Labour minister.

David should oppose this tax and promise to scrap it. If he doesn't it will be held over his head all the way to the election. Call it nasty old Labour class envy and point out that it will not raise much if any money. But please do not dodge the question like Gordon Brown does so often.

[Ross Warren]

"On the TV yesterday he would not oppose the 50% tax, and he would not commit to scrapping it. It was the first time he looked like a Labour minister."

Please don't take this the wrong way, but have you not realised just how bad our debt problem is. It would be utterly dishonest for D.C. to make such a reckless promise at this time. When David talks about austerity measures he is neither joking or exaggerating. When we get into power and he is unable to deliver what will then be a tax cut, everyone would rightly be calling him dishonest. When D.C. and other senior Tory's talk about austerity measures they cannot, and should not mean just for the poor and the middle class. Last week I thought that most people had realised what the nature of Labours elephant trap was, today I am not so certain.

"Call it nasty old Labour class envy and point out that it will not raise much if any money"

That is quite right and indeed there is an element of that in this tax rise. However we are going to have no choice but to clear the debts before we can hope to make real cuts in taxation for everyone.

"David should oppose this tax " Yes.

"and promise to scrap it" Not until it is prudent to do so. We cannot afford to play at gesture politics. We will have to cut and we will most likely have to raise some tax's.
Labour have destroyed our public finances, if anyone should be in the firing line for this increase it is Labour. The National debt will have doubled by the time we get in.
The longer we stay in debt the longer we will be faced with intrest bills. This is a rum do all round. D.C. has indicated that he will be sensible and prudent and he will expect all of us to tighten our belts. The quicker we sort out the mess the sooner we can start to cut tax's. That is what we all want, but b must follow a not the other way around.

[Tapestry]

I left the UK once National Insurance was uncapped, as 40% was more than enough to pay.

The effective rate of income tax has been over 50% since 1997. It is now 63.5%. Britain is an uncompetitive joke. Why anyone bothers working in London any more is hard to fathom. And this is before you take into account that Britain has the highest rate of Inheritance Tax in the world. You pay far less tax in communist China!!!!

Boris is right, but he should be campaigning not to stop 63.5% or 58.5% but to get back to the 40% it was pre-Gordon Brown - that is if Britain wants its highly skilled and successful emigrants to return.

Come on Boris. Let's hear it. 40% all-in top rate of tax, or London can forget it as a leading financial world centre.

[Tapestry]

Communist Chinese rates of tax for your consideration -

"Income Tax Rates in China
The tax on an individual's income is progressive. As at 2009, an individual's income is taxed progressively at 5% - 45%.
The 2009 corporate tax rate for domestic and foreign companies is 25%.
Small companies pay 20% corporate tax in certain cases.

Capital Gains
An individual's capital gains are taxable in China at the rate of 20%."

It's laughable when the communist world undercuts the world's capitalist centres on rates of taxation by a wide berth (45 to 63.5%), but that is yet another of Gordon Brown's great achievements.

[Cleethorpes Rock]

If DC says the 50% tax is bad for the economy, he should scrap it.

If DC says it won't raise any money, he can afford to scrap it.

I don't get how Cameron can attack the tax as being bad for the economy and unlikely to raise revenue, then one minute later pledge to keep it.

[Clive Elliot]

If this high rate of income tax doesn't bring in any more revenue, what's the point of keeping it.

When the last Tory Govt scrapped all rates above 40%, revenue from top earners (apart from tax consultants!) rose dramatically over time.

[resident leftie]

Cleethorpes rock is right - I am worried.

Are the Tories against it in principle, in which case they should scrap it, or in practice, in which case they should scrap it?

Contrary to popular belief, cutting the rate from 60% to 40% did not increase tax collected; it lowered it.

[Jack Stone]

David Cameron doesn`t want to say scrape the 50% rate because he is not a fool. He knows if he does Labour will just start to paint the Conservatives as the rich man`s party.
Sometimes I think you people don`t actually want to win the election!!

[joshuwahwah]

Come on guys. We have known DC for sometime now. He wants to be all things to all people. He will say and do anything to win power. If public opinion changes on 50p then he will change his mind, he does it all the time.

[snegchui]

1) Labour leaked 45%
2)Labour seeks to implement 50%
3)Labour's budget is derided as the most deceitful and dishonest in history by Economist
4) Every budget Brown has produced (and this was his budget even though Darling read it out) has been found to have double-counting and misdirections.
5)The one thing nobody in the UK can do at present is make an objective decision because there are no objective facts as Labour's modus operandi is to lie, and then lie some more.
6) Nobody knows when the next election will take place. Rolling back out tax is not something you should do at short notice without carefully examining all the ramifications. Labour lie, they have a history of lying. Sufficient time will have to be had with the books before you do anything.
7) One of the reasons the UK is in a mess is Labour's adhocery. "OH there is a problem, here is a solution . Oh does it do that as well. Oh well here is another solution . What , they all conflict. Well it's not our fault, those silly judges/police/councils just don't understand our vision. It's their fault". Adhocery has to come to an end , and excitable calls by Labour to persist with it because the court of public opinion, aka the baying of the mob, says so should be firmly resisted. When the Tories are in power, they will act to a Tory agenda,not to a Labour lollygagging.

[Cleethorpes Rock]

joshuwahwah, Jack Stone and residentleftie- I would guess that as soon as he is elected, Cameron will have 50% in his cross-hairs. This is about politics, and has been duly spotted by contributors from both sides as such.

[Peter Buss]

David Cameron has said he will scrap it but it will have to take its place in the queue of undesirable taxes. Whats the problem with that.The idea that its somehow going to be right or even electorally sensible, to tell the County that the best off will have their pain eased (and the best off includes some of those disgraceful wretches who have got us into the mess in the first place) but that the rest of us are just going to have to grin and bear it as our essential services are reduced and everyday taxes are increased is both preposterous and frankly wicked.We are a Party for ALL the people or we are nothing and we shall only get through this if we all row in and bear the sacrifice including those who are best able to bear it.

[RichardJ]

"The idea that its somehow going to be right or even electorally sensible, to tell the County that the best off will have their pain eased"

The best off already pay disproportionately more with the 40% rate.

[HF]

If the Conservatives increase taxes in Govt I will stop my work for them. It will shut down a Branch.

[Matthew Reynolds]

If the effective top rate of income tax was beaten down from this insane 1970's style level of 63.5% to say one 35% rate ( by cutting rates , ending tax allowance claw-back & reversing the cut in top rate payers pension fund tax relief) then London can rise again from the ashes and be a leading player on the global financial scene. We need the Square Mile to get well soon and we should do all we can to facilitate this. Eire prospered thanks to low taxes - its problems where caused by excessively low interest rates thanks to being in the Euro strait jacket

This potty 50p tax nonsense shows that Brown has lost it. If the rich clear off to lower tax havens then they will not be spending in our shops anymore thus leading to more poor people working in retail getting the sack.

Also the rich & their accountants will just declare as much of their income as capital gains thus paying 18% CGT rather than 50% income tax. Charitable donations from wealthy donors may suffer & productivity will suffer as the incentive to work takes a hammering.

This mad tax hike will hit the economy & will not produce anymore money. Revenue will fall owing to the 18% CGT loophole.

The only kind of consolation from this is that the last time a Labour Government tried this mad class war it helped produce the situation whereby we had 18 years of Tory Government. The first 11 and a half years of that where great - shame about the period November 1990 to May 1997.

[Peter Buss]

Very fair point RichardJ but of course any increase in taxes has a far greater proportional effect on those earning lower incomes. I cannpot see how we shall get out of this hole by not inceasing some indirect taxes such as VAT plus of course public spending cuts.

I am all for an enterprise economy and doing evrything sensible to promote one.I would therefore dramatically reduce taxes on business to promote growth which after all must be a key part of our strategy to reduce the deficit.

[englandism.co.uk]

There is a flip side to this 50p coin and sharing burdens.

The Red Tops are off the case at the moment but, Resident Leftie and chums, what about the underclass that Labour and the morally enlightened liberal intelligentsia long since abandoned in favour of the self-combustible chaps?

By reigniting ye olde class war do we really want to flip side with the Red Tops going for it with the scroungers and recession proof fictitious 'disability' claimants working as professional weight lifters and generally exploiting the hard working taxpayer?

It does tend to P-off the taxpayer squeezed in the middle rather more than some illusion of fat-cat, stove pipe hat wearing £100K per year aristocrats.

Otherwise known now as NHS administrators.

[Malcolm Dunn]

Amazed at some of the comments here. I am broadly supportive of Cameron but even if I wasn't I would still agree with him that our priority is to reduce debt and then reduce reduce the diastrous effects of the recent rise in NI contributions.
A long way behind comes reversing marginal rates of income tax. Brown set this up as an elephant trap for us and many commenters are falling into it.

[Cleethorpes Rock]

I agree Malcolm, but my point is that if Cameron says it won't raise much money and is bad for the country, surely it would help us pay down the debt if we scrapped it?

At what point do we need to send someone to CCHQ armed with flipcharts of Laffer curves and Cake analogies?

[Malcolm Dunn]

If and when we win the next election Cleethorpes. I too believe that George needs to be more explicit with his plans but am realistic enough to think that this will not be a done deal until we have all the facts at our fingertips.
The marginal tax rates are more political then economic, they are a trap for us. I think the strategy being employed is the correct one.
As I've said many times before I suspect that when we are in government we will, unless things have changed massively in a year, have to impose very ,very substantial spending reductions together with tax rises too.
Labour will leave a terrible legacy.

[Ross Warren]

"The best off already pay disproportionately more with the 40% rate."

But not as a percentage of their Income when you take account of NI. So far I think D.C. is showing that he is more politically astute than Brown imagined and is playing this 50% trap correctly. Of course it is going to difficult for Conservatives to swallow. Brown calculated that raising the Tax might make little money but it would raise the hackles of the Tory's. So when did he say he was committed to keeping this rise?

[Freddy]

The 50% rate will seriously annoy a lot of newspaper and media journalists because they will be personally affected. This should give our party some very good coverage in the next few months. Other well off Labour supporters are also likely to defect.

As far as the rest of us are concerned, I can do no better than quote from Carole Malone's column in the NOTW yesterday. She writes that the purpose of the 50% tax rate was to curry favour with Labour's core support "for no other reason than they kicked the rich in the goolies."

She doesn't think that the working class will be fooled and will realise that anybody earning over £20,000 will also be clobbered.

By claiming that doing anything about the 50% rate is not a priority, but rescuing those earning over £20,000 is, Cameron has avoided falling into Brown's trap!

[Cleethorpes Rock]

I agree Malcolm; the policy is the correct one. "We want to abolish it but it has to wait in line behind other taxes" is a very good way of putting it too.

[Steve Tierney]

@resident leftie & joshuwahwah

You guys will never get it. Money does not grow on trees. In order to be able to dish it out to the poor and the needy, somebody needs to make it.

In the end, even the most generous and good-hearted wealth-creator will get sick of being soaked to feed every charity case with a begging bowl. Im sure you think these people got rich of 'daddy's millions' or out of some wellspring of impossible luck. But mostly they were just talented and worked hard. They can take their talent and work elsewhere easily.

We all (Tories included) want to support people who are down-on-their-luck and invest in the "many". Unlike you and your ilk, we know that there's a balance between shaking the hand that feeds you and biting it.

[snegchui]

"Mike Williams, the Treasury's director of personal tax, said 31 per cent of the total revenue yield would materialise" .. (from the new 50% band as the avoidance kicks in)
Just out of interest, what cash figure does 31% represent?

[Darren]

Nobody likes paying Tax - to an extent it does feel like it's a penalty!

The best option for avoiding your tax is some clever accounting and managing your money properly... and if you've got a good accountant, then it's a help :)

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