Osborne's 50p question
James Forsyth 7:28pm
If I was a betting man, I’d fancy wagering that if the economy is growing at a
decent clip again by next year’s Budget, Osborne will abolish the 50p rate then. His announcement of a review of how much
revenue it actually brings in, strikes me as a move to pave the way for its abolition. This review is, if it is using dynamic models, likely to conclude that the rate is bringing in no, or minimal,
revenue and that a lower rate would produce more. This would give Osborne the political cover to reduce the rate.
But, as with so much else, this is dependent on growth returning to the economy. Osborne won’t want to get rid of the 50p rate until he can do some other things such as unfreezing public sector pay.
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Simon Stephenson.
March 23rd, 2011 7:42pm Report this comment"This review is, if it is using dynamic models, likely to conclude that the rate is bringing in no, or minimal, revenue and that a lower rate would produce more."
I'm sure that it's terms of reference, and the assumptions it is instructed to use, can be constructed in such a way that reaching this conclusion is inevitable, irrespective of what the true conclusion ought to be.
More and more people, however, are getting wise to the fact that most such supposedly "independent" research is actually advocacy research, and that its conclusions are driven more by the advocacy than by the research.
normanc
March 23rd, 2011 7:42pm Report this commentAh, for the bad old days of conservatism when it was believed that competitive tax rates were a driver of growth, not the other way round.
david
March 23rd, 2011 8:15pm Report this commentSo! growth by this time next year will be 'going at quite a clip' strange, everytime growth figures are revised its downwards. Good thing you are not a betting man.
mav
March 23rd, 2011 9:21pm Report this commentI actually was expecting to announce its phased abolishment today, in the manner of last years corp tax one. 48p next year, 46 the next etc
Ian Walker
March 23rd, 2011 10:50pm Report this commentIt's a symbolic tax, so symbolically scrap it in 2015, just in time for the election.
The corp tax cut will keep the real wealth creators here; if a few bankers flee to Singapore, we won't miss them much. I suspect they'd rather stay close to their customers.
Tiberius
March 23rd, 2011 10:58pm Report this commentI've agreed with you, James, on 50p tax all along, and I think Osborne's gentle hand on the tiller will get us to where we need to be on this issue in due course.
Brown's trap will then have cost the Tories nothing politically. We can then joke at the fool's expense all we want - gold sale and the rest.
daniel maris
March 24th, 2011 12:40am Report this commentThe policy of allowing million plus bank bonuses while freezing public sector pay when inflation is raging at 5% plus is completely untenable.
The public sector is in meltdown. That will become apparent over the next year or two.
There is no reason to suppose your optimistic growth forecast will be better than the Spectator's optimistic prognostications of six months ago.
Lonesome Dave
March 24th, 2011 2:03pm Report this commentDaniel
"The public sector is in meltdown. That will become apparent over the next year or two."
Would that "Public Sector" be the plethora of Brown grateful, non-jobs created by the New Labour socialists? If the jobs actually need doing then the private sector will do them. Let the cutting begin!
General Zod
March 24th, 2011 3:33pm Report this commentdaniel, who gives a toss about the public secotr being in meltdown?
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