People believe in progressive taxation – so we have to keep the 50% tax rate

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As reported in the Guardian this morning, from a poll by AXA:

More than half said they wanted the 50% income tax bracket — introduced as an emergency measure by Alistair Darling during the last parliament — to become permanent.

Of course they do!  The people of this country believe in progressive taxation. We barely have it; indeed the poorest people in this country suffer the highest overall tax rates, and the richest the lowest. A 50% income tax rate for those earning over £150,000 a year is a small token gesture in the right direction to creating progressive taxation that ensures that those with the greatest means in this country make a sufficient contribution to its overall well-being, which they above all others enjoy.

A 50% tax rate is not only a temporary measure to raising revenue, it is an essential part of a just taxation system.

And I am well aware that the likes of the Digby Jones argue that if we have such a tax rate talent will lead this country. Let's be clear about this though: that's not talent that's leaving, that is greed that is leaving.

Those who would leave this country in pursuit of monetary gain have such distorted value systems that their prospect of generating value for the rest of us is remote in the extreme. They make money by trading, by exploiting markets, by taking risk from which they receive the upside and we bear the downside, and they do so by cheating, even if they can defend it legally. We are best off without them.

The reality is real entrepreneurs are the people who have a genuine passion to make goods and  to supply services that meet people's needs. They are not put off by taxation:  real entrepreneurs are motivated by the desire to do something well that fulfils a real demand from their fellow human beings. They know that they will make a return if they do that, and they know that in the UK there is still an extremely fair corporate tax system that ensures that their profits are taxed moderately (too moderately if the Tories have  their way).  There is no reason why a 50% tax rate will ever be a disincentive to those people.

The will of the majority is right in this circumstance: any party that ignores it is risking their chance of election next time round.

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