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Increasing the TAX rate in the UK will not help. Rich people will LEAVE. Like rats leaving a sinking ship. It's time to abandon the UK!
During 2008/2009, there was an economic setback known as the Credit Crunch. It was worst in the UK and the USA, where the worst effects of living on borrowed money were moving the economies towards teetering on the edge. The "sub-prime" nonsense, over-borrowing, selling off unknown risks, and banks lending more money than they had got, had stretched the credibility of the fantasy money market to the limit. It crashed, like in 1929.
The UK government in 2009 tried to salvage some dignity by pretending the problem was not as bad as it seemed, and they did a few things which might have helped, and then... they committed economic suicide by increasing the already ludicrous tax rate from 40% to 50%.
Besides the obvious fact that even if there was a flat rate tax of 10%, rich people would pay more tax than poor people (because 10% of a large amount is more than 10% of a small amount), and the fact that the tax increase was a direct breach of promise by the government (who made a huge publicity stunt of the "no tax increase" promise earlier on), there are some crucial worldly facts which have to be pointed out:
1. Communism (at a country level) does not work. Neo-communist governments in disguise might try to hide their sympathies for the great dictators of the old Soviet Union, but such wealth-redistribution doctrine results in wealth-destruction, in the same sort of way as health-redistribution by inflicting illness on healthy people in a desperate attempt to equal up the gap between healthy and sick (gap between rich and poor).
2. No country is an island (geopolitically), even if its coastline says it is an island geographically. We live in a global world where, with democracy lacking in the country, people VOTE WITH THEIR FEET by leaving a bad country and moving to somewhere that's better. If things get too bad (or if they are made too bad by the government), anyone who can afford to leave, will.
There are estimated to be 300,000 people in the top bracket who will be affected by the utterly ludicrous 50% tax rate (in 2009), ie having an income of £150,000 per year. Most of these are not bankers, and even fewer had any guilt associated with the causing of the credit crunch. Most of the wealthy people in the UK are in business, and as you'll know if you run your own business, it's a matter of skill and luck. Now that there's a recession, it's become more difficult to keep a business running, and one of the things which you can do without is the government imposing ruinous taxes. So, what do you do? Well, if you can, you leave, escape, get out. The UK has many good things about it, but there are plenty of other places which are better in various ways. More freedom, less authoritarianism, less tax, warmer weather, etc. It's up to you to choose a country to live in. Some countries will make you welcome. Countries that welcome rich people (for example, some Tax Havens), will be the new prosperous countries, whereas countries that have onerous tax legislations will be the new poor countries. The balance of economic power in the world changes as history moves on.
It's not too late for the UK to salvage itself and start being sensible. There was a time when it was one of the greatest countries in the world.
However, if it doesn't show signs of improvement, in terms of personal freedom, reasonable taxation, and liberalisation in recognition of the global situation, it'll lose its most prosperous people, and will end up being "that poor little island off Europe" rather than being something more like "Great Britain", etc.
I've lived in the UK for a long while, and I've watched it going to the dogs, but I never thought I'd live to see it actually arrive there, at THE DOGS. While I still had the vote, I've seen different governments that I voted for or voted against, and my vote has never made any difference. All of the political parties that had any hope of getting in have all been a disaster. So now I'm going to vote with my feet, and that WILL make a difference. It will certainly make a difference for me, and if enough people vote with their feet it will make a difference to the place itself.
So, for those of us who aren't chained to the ship, let's abandon it!
Rats: squeak ... splosh!
Ship: ... ... glug glug glug
Also see: Domicile = Slavery, Is it true that rats leave a sinking ship?, the fact of the good and bad about the UK, and choosing a country to live in (note that different choices are appropriate for different people), tax havens, dark shadows cast upon The OECD, and matters of personal freedom. This page "Squeak... Splosh!" gets a special mention towards the end of the Circular Newsletter (129).
Here's another take on the tax nonsense in 2009, at another site: See Toxic Drums: Tax Increase hits the POOR as well!
News in the Financial Times in 2010 notes that UK courts are making seemingly arbitrary decisions and are "moving the goalposts" so people who had previously stuck by the letter of the law regarding their tax exile status, were suddenly found guilty of retrospectively not fitting the new greedier government ideas based on the credit crunch and the country's possible imminent bankruptcy. So, if you escape as a tax exile to a tax haven, make sure you escape as a tax exile properly!