Has the 50% tax band provided the Labour Government the rope with which they will hang?

Has the 50% tax band provided the Labour Government the rope with which they will hang?

In a move reminiscent of the that famous British World War Two classic ” A Bridge too Far” will the imposition of a 50% tax band on salaries of £150,000 and over prove to be the last straw for an already disillusioned British public signalling the end of their eleven plus years stay in power at the earliest possible opportunity. Whilst the opposition parties continue to make a lot of noise, as any financial analyst will tell you, Chancellor Darling had absolutely no alternative but to apparently “soak the wealthy” in his desperate need to earn tax income.

Rumours are rife in fact that the 50% tax band is just the beginning, and as long as the Labour Government remains in control of the tax strings, they will continue to pull them even tighter around the throats of these who are in the upper income bracket, despite that fact that Alasdair Darling has insisted that 50% is as high as he will go.

According to Treasury estimates, a mere 300,000 people will become liable to pay a large percentage of their income at the 50% tax band from next year onwards. However, continuing to display their perennial yet apparently unfounded optimism, Darling’s crew estimate that more than three quarters of a million UK citizens could find themselves in the comfortable situation over the next ten years. Immediately although accountants believe the figure will rise to around 750,000 people over the next decade. There is a kind of perverse argument around that as more people find themselves in this upper income bracket, they will leave the country to settle in places where the tax system is more compassionate. Whilst this is possible in today’s global economic climate, the chances are that the majority will have created a situation for themselves where their UK business is immovable and they will have no option but to pay the higher taxes.

There is little doubt that the introduction of the 50% income tax band has become a bit of a hot potato not only among the rich and famous, but within the party itself. The comparatively unsubstantial income that the tax increases will bring may not for the serious backfire at the next general election.

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Tags: Alastair Darling, Economics, Financial News, Tax