Think tank slams 50 percent tax rate


A leading think tank has slammed the 50 percent tax rate, claiming that sticking with it will only cost the UK more money as big businesses and wealthy citizens will eventually abandon the country.

The Adam Smith Institute has warned the government that if they do not abolish the highest rate of tax then there could be sever repercussions.

The 50 percent tax rate currently affects people who earn £150,000 or more, and it was implemented in an attempt to reduce the massive national deficit currently plaguing the UK.

However, The institute warned in a report that the 50p rate on incomes over £150,000 would cost the Government £350 billion over the next 10 years.

The think tank called on Mr Osborne to reduce the 40 per cent higher rate of income tax to 35 per cent.

It also said that the Chancellor should dump the £30,000 charge for “non-doms”, reduce capital gains tax from 28 per cent to 18 per cent and restore personal allowances for those earning over £100,000.

Eamonn Butler, the institute’s director said: “It's not that high-fliers can't afford a 50p tax rate. It's just that they quite understandably resent governments grabbing half of everything they earn. That is why they are falling into the open arms of our competitor countries, who make them feel far more welcome.”