[Sephiroth]

Originally Posted by Mr K

No, not really. Tax rises on those that can afford them are the fairest option. I was pointing out the hypocrisy of some on benefits.

Then there's those that want spending cuts so they can be richer... The Tory policy has backfired with public services woefully under prepared, and under funded for the current crisis.

The IFS doesn't agree with you. The damaging effects of CV will not be mitigated even to the merest extent by taxing the rich.

https://www.ifs.org.uk/bns/bn84.pdf

The Treasury estimates that the 45% tax rate will affect 350,000 people, and raise £1.6 billion in a full year after accounting for the impact on tax revenues of any changes in behaviour caused by the tax change (we refer to this as the ‘behavioural response’ to the tax change). This behavioural response would arise in the following way: increasing the marginal rate of income tax at the top of the income distribution to 45% makes earning slightly more a little less attractive to those already earning more than £150,000, and reduces the cost to them of earning slightly less. We would therefore expect these individuals to respond to this change by reducing their taxable income. They could do this by increasing their contributions to a private pension, working less hard or making more effort to avoid or evade tax. These changes might also discourage high-income individuals from coming to the UK, and encourage those already in the UK to emigrate or retire earlier.

All of these responses would tend to reduce the amount of revenue raised by this reform, and in theory could even mean that this tax rise costs money. In general, the size of these revenue effects will depend on:

• how high-income individuals respond to changes in their marginal tax rate and their total tax bill; this will affect what they pay not just in income tax but in other taxes too;

• the number of people on different incomes above £150,000 (which requires us to estimate what the distribution of these high incomes will look like in 2011–12 from what we know about the distribution of those incomes today).