Thursday, July 12, 2007

New tax plans - beware the super-rich element

When the news of the four pence income tax rate reduction first appeared in the Guardian, I said that we would have to trust Statler and Waldorf (Vince Cable and Ming Campbell) and wait for the details.

I am pleased to say that the trust I put in Statler and Waldorf has been repaid. Vince Cable's plan for a four pence tax rate reduction, coupled with increased green taxes and taxes on the super-rich, are absolutely right in principle. If they are likely to be popular it is because they are right. They free up people's income so that they can make their own decisions about how they spend their money, and encourage "green" behaviour.

My main cautionary note is about the detail of the "super-rich" taxing element. I have usually found that such a policy element is a liability. It is strange, but even people who don't have a cat in hell's chance of ever earning enough to be in the "super-rich tax" bracket still seem to respond to Daily Mail stories about forcing essentially skilled people abroad.

But hey, who knows? We might strike lucky and have Andrew Lloyd-Webber threatening to leave the country if a LibDem government is elected.

1 comment:

  1. I think its wrong on principle to tax earned wealth, so I welcome the cut on philosophical and welfare grounds, but the hike in taxes for the 'super rich' leaves a nasty taste.
    I'd prefer to tax their unearned wealth... (I'm sounding like Jock now ;) )