Introduction of the 45p rate represents a missed opportunity
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Osborne should have introduced a 40p rate to create an incentive to work an invest in Britain
Commenting ahead of the reduction to the 50p rate of income tax, Mark Littlewood, Director General at the Institute of Economic Affairs, said:
“The introduction of the 45p top rate of income tax does not go far enough. Any tax cut is good for stimulating the economic growth we so badly need, but the Chancellor should have been braver and cut it to 40p when he had the opportunity. When the rate was cut from 60% to 40% in 1988, tax revenues soared because it created the incentive to work and invest in Britain. This is the kind of action we need now to boost our faltering economy.
“A considerable amount of those earning over £150,000 create jobs and as we try to reform welfare to make work pay, we should also be ensuring we are creating the right environment for job creators to flourish.”
Notes to editors
To arrange an interview with an IEA spokesperson, please contact Stephanie Lis, Communications Officer: 0207 799 8900 or 07766 221 268.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.
The IEA is a registered educational charity and independent of all political parties.
“The introduction of the 45p top rate of income tax does not go far enough. Any tax cut is good for stimulating the economic growth we so badly need, but the Chancellor should have been braver and cut it to 40p when he had the opportunity. When the rate was cut from 60% to 40% in 1988, tax revenues soared because it created the incentive to work and invest in Britain. This is the kind of action we need now to boost our faltering economy.
“A considerable amount of those earning over £150,000 create jobs and as we try to reform welfare to make work pay, we should also be ensuring we are creating the right environment for job creators to flourish.”
Notes to editors
To arrange an interview with an IEA spokesperson, please contact Stephanie Lis, Communications Officer: 0207 799 8900 or 07766 221 268.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.
The IEA is a registered educational charity and independent of all political parties.
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