50% Top Tax Again

The shadow Chancellor has promised to reinstate a 50% additional rate of income tax if Labour forms the next Government

Ed Balls announcement that he would raise the additional rate of tax from 45% to 50% were he to be Chancellor after the May 2015 election received much publicity, even if it was hardly an unexpected move. The increase is about politics – it polls well – rather than revenue-raising:

When the Office for Budget Responsibility looked at the impact of 50% tax in 2012 it concluded that “Estimating the size of … behavioural responses is very difficult, especially for high income individuals who are likely to be more willing and able to alter their working lives and financial arrangements in response to tax changes than the bulk of the population.”