We should worry that Tracey Emin, Hugh Osmond and Michael Caine are fleeing the 50p tax rate
The 50p tax rate will be a disaster for the economy – taking us back to the dark days of the 1970s, says Boris Johnson.
Not everyone will miss her as much as I will. Not everyone can relied upon to mourn the departure of Tracey Emin and her duvet. You may have seen that the gorgeous Britart supremo is off to France. She has had it with Britain, says the woman who famously embroidered a tent with the names of everyone she had ever slept with, and was shortlisted for the Turner Prize.
Some readers may feel that the country can rub along without her. Take up thy tent and walk, they may say, in the words of the gospel. And then there may be people who don’t give a monkey’s that Michael Caine is thinking of vamoosing, or that we are about to lose Eddie Jordan, the former Formula One chief, or the milk tycoon Lord Haskins. Some of you may not care a tinker’s cuss if the former bookshop king Tim Waterstone deserts these shores, and as for the impending absence of Hugh Osmond, an entrepreneur who has had a role in everything from pizza to insurance, you may feel that we just have to dry our eyes and get a grip on our feelings.
Boris argues: “If it is true, as is now daily related in the Financial Times, that the hedgies are starting a quiet and well-shod stampede to Zug and Pfäffikon and other bourgeois Swiss towns, you may think that is their look-out. They know perfectly well that some Swiss cantons are so tyrannical that they have a law against urinating standing up after 10pm – in case it disturbs people in the neighbouring apartment. They have been warned about the traffic police and the kind of nightlife you find in Geneva. You may think that they deserve their fate.
And yet the 50p tax rate that is beginning to drive these people away is a disaster for this country, and it is a double disaster that no one seems willing to talk about it. When Margaret Thatcher’s government cut the top rate of tax to 40 per cent in 1988, she was completing a series of reforms – beginning with the removal of exchange controls and followed by the Big Bang – that helped to establish London as the greatest financial centre on earth.
Britain had been transformed from a sclerotic militant-ridden basket-case to a dynamic enterprise economy, and the capital became a global talent magnet. It wasn’t just financial services, and the masters of the universe who came from all over the planet. It was the lawyers, the accountants, the whole downstream chain of service industries – and manufacturing industries, come to that – which prospered in an environment that was fundamentally benign to those who showed dynamism and initiative.
That is why London now has four of the world’s six leading law firms, and why the city leads the world in everything from academic health science to advertising. It is the reason we had the phenomenon known as Cool Britannia – the style, the fashion, the restaurants and the Britart sensation that launched Tracey and others on the world. Whatever his other mistakes, Tony Blair understood the vital importance of maintaining the stability and certainty of that 40 per cent rate. He instinctively understood the role that limit played in providing incentives to the energies of the most diverse and talented city in the world.
So it is utterly tragic, at the end of the first decade of this century, that we are back in the hands of a government whose mindset seems frozen in the wastes of the 1970s. If Gordon Brown remains in power – and perhaps even if he does not – Britain’s top rate of tax will soar far above that of our most important global competitors. China, Germany and Australia are on 45 per cent maximum; Italy is on 43 per cent; Ireland on 41 per cent; France on 40 per cent; and America is on 35 per cent.
When Mrs Thatcher cut the top rate in 1988, the Treasury saw yields go up. People stopped avoiding taxation; people thought it worth their while to get up at 5am and work that extra bit harder – and the share paid by higher-rate taxpayers actually increased as a result of the tax cut. What Gordon Brown wants to do is therefore economically illiterate.
So why are they doing it?
It is nothing to do with the needs of the economy, of course. It is all about politics. This Government has spectacularly mismanaged the public finances. It has overseen an explosion in the wage bill of the state, to the point where the average public-sector worker now earns £74 more per week than a private-sector employee, as well as having much better pension and other entitlements.
In the next few months there must be a bloody reckoning, and as the cuts fall, Labour wants to be able to console its suffering public-sector vote bank. You may be hurting, they will say, but the rich are hurting, too.
In other words the 50p tax is not far, in its political motive, from Stalin’s assault on the kulaks. Above all, Labour wants to portray any opponent of the new tax as a thoughtless defender of the rich. We are not. The truly rich will get a smarter accountant or buzz off to Zug. What we want to protect is the spirit of enterprise that has been so vital in reviving this country in the past 25 years, a revival that has helped all sectors of society.
If the Labour Government cannot understand the importance of the enterprise economy, it has become a catastrophe for Britain, and should go as soon as possible.”
You can read a fuller version in The Daily Telegraph
24 thoughts on “The 50p Tax is driving people away”
Let’s hope a huge proportion of the population have this 50p tax worry then the economy will really be booming
I hope you will stay Boris, notwithstanding 50p whack
Congrats, Bozza, more ‘market forces’ tripe. Keep banging that drum, even though it has a gigantic hole in it.
If 50p drives the useless rich away, please let me know where to send my 10 quid. Do I get to nominate the 20 disgusting tax dodgers to be kicked out?
I see your point Boris but you’ve chosen the wrong vehicle – Tracy Emin?! Oh good grief!
Actually, bit of gossip: I remember chatting with someone who went to art school with her. ‘Mediocre’ at art, she said, but she could definitely talk a good picture. This wasn’t said bitchily but with something approaching envy. You don’t need talent nowadays it seems, just be able to bullshit your way into the art world.
@Vicus Scurra: Can I volounteer to be got rid of? Seriously I read of Agnes Wong and through that saw that government money, about £4500 per, is being allocated to re-settle offenders in their home country. They can then spend that pop back and claim asylum.
@Vicus Scurra: Incidentally I don’t mean I want to volounteer to be an offender or to do anything illegal or sickening, but as you said, why can we not just volounteer without offending?
Not any one can bullshit their way into the art work nowadays. Sorry.
If TracEy Emin can bullshit her way into the art work, that ability is her talent already.
Tracey Emin is just as good/bullshit as Damien Hirst.
Vicus. Tragic.You sound like Dave Spart from Private Eye. Especially the ‘sickening’ bit. Let me explain why your comment is drivel.
‘If 50p drives the useless rich away, please let me know where to send my 10 quid. Do I get to nominate the 20 disgusting tax dodgers to be kicked out’
1) The ‘useless rich’, pay a large proportion of the UK’s tax take. If they go – no more tax from them. Less money for the Govt. Less public spending or more tax for the rest. 40% of something is better than 50% of nothing. So why do you want to drive them away?. Is it perhaps because of old fashioned class hatred/envy? or economic illiteracy?. Just try and remember the phrase ‘cutting off your nose to spite your face’ it should help clarify things for you.
2) If they are real ‘tax dodgers’ as you put it, they won’t be paying much tax at the moment and have no reason to leave. If they pay 40% at present then they are not dodging anything. Or perhaps you think they should surrender all their income to state, so it can spend it for them?
3)’Do I get to nominate the 20 disgusting tax dodgers to be kicked out’. No. They’re leaving of their own volition. You don’t get to decide anything. If they go, they are not ‘dodging’ just paying tax elsewhere. Just as foreign workers do when they come here. Would you accuse an newly arrived Indian IT worker or a African footballer of being a ‘tax dodger’ if he pays tax here and not his home country?
4) Of course if they go not only do you not get the tax, you dont get their personal spending. So lower sales and less income for shops and consequently lower employment.
Never mind eh?
No, Philipa, you will have to prove your credentials before you make it onto my list. Are you a member of the shadow cabinet, for instance?
While I agree with your words in general – there is something to be said for aiming for a 35% rate under the new reign.
However, I guess that it isn’t in Dave’s interest to upset his new master in the EU who don’t like too much free enterprise – in case it makes them irrelevant!
Excuse me chaps and chapesses, you’ve rated me down but none has addressed my argument save ‘on the dole painter’ (agree with you completely; it’s a dog eat dead cow world). If you’re going to put my comment down then how about addressing the point?
The best way to maximise tax revenue is to keep it simple.
If there were a flat rate 30% tax, with a starting threshold of £15000, the low paid would be vastly better of, medium earners would have an incentive to work harder, and the high earners would have an incentive to live, work and bring business to the UK.
Far fewer tax inspectors would be required for such a simple system, and no incentive for those currently in the high tax bracket to spend vast amounts on fancy accountants.
Similar simplicity is possible for capital gains tax, share dividend income, and anything else the Government raises money from. From simplicity comes efficiency.
“I am sure it is of great value… but I think you can do this kind of thing much, much more cheaply,” said London mayor Boris Johnson, a keen cyclist who has sought to boost bike use since taking office last year.
He has sought, but has thrown money on gimmicks (ride Friday: very expensive) that have been high profile but haven’t attracted many cyclists.
One suspects he would have been too spineless to introduce the congestion charge, which really has made a difference.
How about raising personal allowances, and introducing a nice, simple flat-tax system?
Totally fair, no loopholes, increased tax take, and an end to tortuous Brownian tax meddling.
I think Mick Anderson and Rog are on to something there.
a cmonkey’s what exactly? P.S. Hurry up with those leaf kicking pics Mel!
Every who has read the Child’s Book of Tax Policy knows that the tax increase is stupid and counter-productive, but of course Gordon doesn’t care. During ten years a Chancellor he demonstrated exhaustively that he has no understanding of tax policy, nor any curiosity about it. The only purpose of the 50p rate is to embarrass the Conservatives. It is the work of a man who would rather be the cock of a small dungheap than an ordinary citizen of a great nation.
Vicus – made I larf 🙂
The question I have is how the devil are we going to pay for the public sector when cuts have been priced into the gilts market?…….Without substantial public sector cuts all hell will break loose with gilts rendering further borrowing close to impossible. 50p tax is small fry compared to the taxation required to sustain the public sector at its current size.
@Philipa @Vicus lol lol – that is what I was thinking about the Queen’s Speech too – perfect nonsense
On Reading his Blog for the first time I am sure that Boris would not be of more use in number 11 or even number 10 than at County Hall!!
God we are in such mess we need a Leader who can cut through the crap and show the Nation the way out of this disaster!
Absolutely right you can never get labour oafs to realise
that most of the rich got that way through risk taking and
hard work and in fact they create jobs – why would we want
them to do so in another country we need them here! We lost
most of our manufacturing industry during the soak the rich brain drain and winter of discontent of the last labour
administration (ruled over by the unions) but they still don’t get it do they?!!!
i think the UK needs space for more talented artists other than Tracy Emin
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