Revenue Falls When Wealthy British Pay Their ‘Fair Share’

Editorial
Investors.com
2/23/2012

Tax Policy: The British government introduced a higher tax rate on the rich in 2010, promising that it would bring in added revenue. But, as any sensible person could have guessed, just the opposite has happened.

Gordon Brown’s Labour Party government launched the 50% rate in income taxes allegedly as a means to bring in more revenue.

The London Telegraph reported earlier this year that Her Majesty’s Revenue and Customs estimated the British version of the Buffett Tax would “show a ‘surge’ in revenues totaling hundreds of millions of pounds from the first year.”

The “surge” wasn’t even a trickle. In fact, there was actually a reversal. Collections fell by $800 million compared to income tax payments a year earlier.

As Francesca Lagerberg, head of tax at the accounting firm Grant Thornton, told the Telegraph this week, the apparently unexpected outcome “highlights the fact that high tax rates don’t always deliver high tax revenues.”

But shouldn’t they? Yes, if nothing else changes. But things change. They always do…

…We also have congressional members who want to impose their sense of fairness on others. Among them is Rhode Island Sen. Sheldon Whitehouse, the Democrat who introduced the Pay Their Fair Share Act that would put a discriminatory levy on wealthy Americans.

Naturally there is lusty support for, and eager co-sponsorship of, the bill from within the party.

There is, however, little thinking going on.

Read the whole thing at IBD.

Also at IBD, Obama’s Speech on High Gas Prices Contained Five Major Whoppers About Energy

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