More than 500 owners of businesses in Britain urged the government on Thursday to scrap its 50-percent top income tax rate in the upcoming budget to aid economic recovery. In a letter to the Daily Telegraph newspaper, 537 owners of small and medium-sized business warned finance minister George Osborne that the rate penalised top earners and would damage the fragile recovery.
It comes as neighbouring France debates a proposal by the Socialist candidate in the presidential election Francois Hollande to raise the top rate on annual earnings of one million euros ($1.34 million) to 75 percent. In Britain, and ahead of Chancellor of the Exchequer Osborne's annual budget on March 21, business leaders are demanding a cut in the 50-percent income tax rate.
"Given the current state of the UK economy, we urge the chancellor to urgently consider scrapping the top rate of tax in his forthcoming budget," said their letter. The 50-percent tax rate, levied on incomes above £150,000 (170,000 euros, $240,000), replaced a rate of 40 percent in April 2010 as a temporary measure by the former Labour government. It has since been continued by Prime Minister David Cameron's Conservative-Liberal Democrat coalition, while Cameron has also said that the top rate should only be "temporary."
The business leaders added in their letter that the high tax rate "puts wealth creators like us in a very awkward position." It continued: "We believe the richest should help the poorest in society. One percent of taxpayers are already responsible for 24 percent of income taxes. "But penalising high earners through an unfair, politically motivated tax puts populist politics before sound economics." Meanwhile in France, Hollande, ahead in polls to be France's next president, vowed on Tuesday to make the country's top earners pay 75 percent tax - a move denounced by President Nicolas Sarkozy as "worrying amateurism."
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