08 Sep Government Opposes Dropping 50p Tax Rate… For Now

The conservative party and David Cameron have both come out in slight opposition to a recent proposal from a group of top economists that the 50p tax rate should be ended. The Prime Ministers spokesperson commented that before any tax cuts could take place the government would first be committed to raiding the income tax threshold to £10,000. After this, it may consider then dropping the tax rate for higher earners, should it prove to be financially viable. Danny Alexander, chief secretary to the Treasury and a Liberal Democrat, has actually claimed that he would like the income tax threshold to be nearer to £12,500, which would really put strain on any plans to drop the 50p tax rate for higher earners. However some economists argue that the tax rate causes business leaders to conduct their business elsewhere. In addition they believe it stifles competition and causes job losses, thus leading to lower tax revenue.