Want a tax revenue windfall? Tax the rich, right? Wrong—as Britain’s finding out.
Back in 2009-10, more than 16,000 Brits reported incomes of £1 million of more (about $2 million).Then former Prime Minister Gordon Brown hiked the top rate to 50 percent.
If all had worked as planned, that’d be at least £8 billion. Cheerio!
Or cheeri-no, as it turned out. The move actually lost tax revenue, as The Telegraph reports:
In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs. This number fell to just 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election. …
It is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes. …
Harriet Baldwin, the Conservative MP who uncovered the latest figures, said: “Labour’s ideological tax hike led to a tax cull of millionaires. Far from raising funds, it actually cost the UK £7 billion in lost tax revenue. “Labour now needs to admit that their policies resulted in millionaires paying less tax and come clean about whether they would reintroduce this failed policy if they were in power.”
The President should keep this example in mind—along with the fact that the number of Americans taxed out of the country has doubled.