‘Wealth creators’ demand 50p tax rate repeal
By Alex Stevenson Follow @alex__stevenson
The top rate of income tax should be scrapped in this month's Budget, company bosses are demanding.
A letter to the Telegraph newspaper from over 500 small- and medium-sized businesses attacks the 50p rate as being "unfair" and "politically motivated".
It calls on George Osborne to scrap the top rate, which – after national insurance – the letter claims is effectively 58%.
"As business people, we want to see our industries, our economy and the Third Sector thrive," the signatories wrote.
"Repealing the 50p tax would demonstrate the chancellor's wish to celebrate British entrepreneurialism, stimulate industry and contribute to the government's growth agenda."
Calls for the 50p rate, which was introduced by Labour's last chancellor Alistair Darling, to be reversed are expected to be strongly opposed by Liberal Democrats within the coalition, who are determined to ensure the rich are taxed to pay for measures helping low-income workers.
But business chiefs are arguing today that the 50p rate will actually reduce government income and puts "populist politics before sound economics".
Shadow chief secretary to the Treasury Rachel Reeves said moves to cut taxes for the top one per cent of taxpayers "cannot be the right priority now".
"If the chancellor really wants to know how much revenue the top rate of tax is raising he should ask the Office for Budget Responsibility, not just HMRC, to produce a report genuinely independent of government," she suggested.
