I read in the Sunday Times this week that the government are putting serious thought to bringing in legislation to increase tax to anyone earning more than £250,000 per year. Personally I couldn’t think of a more ridiculous proposal especially during the ‘credit crunch’ but I assume Brown needs to make good on his promise for the NHS and needs a further £3 billion to pump into it.
What I don’t understand is the principle behind this. As an individual you become successful, valued and justly rewarded for your time and effort to climb to the top of your business and industry. You have a lot of responsibility, you provide jobs, your business pays corporation tax, you pay tax on your salary but still you have to pay more for being successful. Don’t get me wrong I am all for equality and a fair society but why penalise those who are very successful and risk them moving elsewhere.
I am sure if you looked at the personal tax contributions these people make, the money they put back into the economy (helping to keep our british brands afloat) you could argue that loosing these type of earners will harm the economy more than taxing the few that would remain. And from personal experience the people in this kind of pay bracket are generous when it comes to charity and giving back to society anyway.
Obviously you are going to have those who take and give nothing back but I believe by changing the way we treat high earners for the better, people would be less likely to try and hide assets and pay what is due. Look at the mess with regards to non-doms and the fact that Lewis Hamilton was advised to live in Monaco just as he started to earn the big bucks goes to prove my point. He drives for Great Britain but doesn’t pay the majority of taxes which I don’t think is fundamentally right but I am sure I would do the same in his position with current tax rates. Surely this can only get worse with the new proposals?
What we need is a society that is not ashamed of success, promotes enterprise and appreciates the total contribution made to our economy. I truly believe that by making tax simpler and more consistent would in the long-term raise more for Brown to pump back into the never ending hole that is the NHS. But that would require foresight which Government doesn’t appear to have anymore.