I've not changed any problem, you've just answered the point of morals vs maths & you can't see the wood for the trees. The 50p rate was nothing more than window dressing & didn't really have any good thought process behind the figures.
HMRC came out today and say that they would see an increase of £130m per year against the 50% rate which reduced receipts by £220m per year when introduced.
On the wider point of course there is a moral issue but like I say that is not why I question the reduction. If it ends up with more tax being paid then I wouldn't oppose it. I do question the assertion made, that reducing tax rates brings greater revenue. I don't think it always does because if it did then why not cut higher rates further. Why stop at 45p?
The point I made about you changing the problem is that you moved the argument (from the one being made by another poster) to multinational competitive tax rates. That wasn't the point I was discussing with him. The problem you get by trying to do that by the way is that the other countries respond by reducing their tax rates leaving your assumptions shattered and tax wise beggaring yourself and your neighbour.
Sometimes when you reduce tax rates, tax take goes up. Sometimes when you reduce tax rates, tax take goes down. Sometimes when you increase tax rates, tax take goes up and sometimes when you increase tax rates, tax take goes down. There are examples in history to support, refute the arguments about where the optimum level is. One thing to remember though is that growth has by far a greater effect on tax collection and the higher rate was introduced in difficult times and it has been reduced just as they are supposed to be easing.(Let’s hope HMRC are right this year for a change)
So no I don't think the rate should have been reduced I certainly don't think it should be reduced further and I still haven't seen an argument on the maths which is conclusive.
