
Why Osborne is playing it right on 45p tax
The 45p tax rate for those earning over £150,000 is a political measure not a fiscal one; calculations by the Institute for Fiscal Studies show that it will raise virtually no revenue. Labour desperately wanted to create a dividing line with the Tories over the issue: Labour want to raise taxes on the wealthiest few, the Tories want to cut services for the many. At the time of the PBR, the Tories sensibly avoided this elephant trap. Now, George Osborne’s remarks that the 45p rate will be “difficult to avoid” have caused a storm. Tim Montgomerie has declared that “George Osborne needs to get a grip” and warned, “Tax rises
