It is not complicated. The 50% tax is just a dumb idea...

Not long ago the Labour government announced that it was going to introduce a 50% tax rate on those earning more than £150,000.

On the face of it this will instantly seem like a good idea to some people, particularly those of a socialism slant, those who are idealistic but not necessarily partially minded, in short people who should never be allow to run the country. Labour basically.

The idea is that those who are earning lots of money can afford to lose a bit more, after all, they have plenty to lose. Meanwhile those who don’t have much shouldn’t have that which they have taken away from them.

This is often popular because after all you don’t earn over £150,000, do you? So it isn’t going to sting you, and the number of people who do earn that much aren’t really going to carry that many votes, because there are so few of them. So it is a win win situation, right? Piddle on the rich and get the approval of everyone else.

But for anyone with the foresight that goes beyond the end of their nose there is a problem with this: it’s a steaming pile of manure.

First of all let’s tackle the practical element. It holds the most sway for most people and it will lead naturally on to the moral element.

The people who are really rich, I mean seriously, stinking ‘I spend most of my time on my yacht with orange and silicon women’, are in a seriously small minority. They also don’t get ‘pay packets’. They don’t get a cheque paid into their bank account each month for them to pay their mortgage and for their food and gas, they own companies. They get their money through interest in liquid assets, they get it from shares, they get it from buying and selling products across the globe and they get paid dividends, none of which is covered by this new level of income tax.

Even that which is covered by income tax isn’t going to end up in the states pockets because they pay very smart people very good money to make sure that it stays in their own pockets, after all that is what a high price accountant is for.

If by some miracle it was going to hurt them then they would up sticks and move to another country, and then not only would we not get the extra tax, you have just lost all the other tax that they pay too, VAT, Stamp duty etc etc etc. Have a look at the times UK rich list… go on type it into Google, I can wait. How many of those people at the top do you think are actually British by birth? If you need to count you’ll only be needing the one hand, that is for sure. This mass of billionaires is here for three reasons:

1 The UK will respect their property and freedom

Unlike communist countries like Russia, China and err… France, the UK isn’t going to wake up one morning and decide it wants to have them killed or redistribute their wealth because they have lots favour with the latest nutter who is in power. This to a billionaire is quite a plus

2 We’re not the US

Unlike the US we don’t have a pathological suspicion for anyone Russian, even though they are run by people still thinking we live in the cold war, and we don’t really care if you made your cash from a corrupt oligarchy regime. We don’t really care how you made your cash as long as it wasn’t selling cocaine to teenagers.

Also you’re only one BA ticket away from the Italian, French and all the other Riveras that the uber rich love so well.

3 Our tax isn’t high

That’s right, the crux of the matter. Living in the UK is expensive but no as much as living in Sweden or many other states with super high taxes… if we put high tax on everything all that will do will make a high demand for movers as all the super rich hop on a plane to the next stable country.

So increase taxes and watch you tax revenue drop like a stone… good plan Gordon.

Now for the moral element. Let’s consider the poor chap who is actually going to have to pay this retarded tax. Generally this is going to cover Barristers, some GP’s and a few other professionals. It won’t cover the Directors of banks of course because they will have moved to Hong Kong where the income tax level is around 17% (see http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6850242.ece if you don’t believe me).

So professionals will get stung. Nice, after all they deserve it don’t they? While you were in University getting lashed to the point you couldn’t remember your name they were in the library boring themselves half to death in order to ensure they get a good job. But now Labour wants to take 25k out of the last 50k they earn to pay for their own cock-ups.

It doesn’t take a genius to work out that eventually they may just stop working so hard in the first place. Why not just work less hours and earn 150k and avoid extra tax altogether?

Or if you are a talented student why would you get a job as a lawyer in the UK when you do it in Hong Kong and actually get paid the money you worked to earn rather than being mugged for it by the tax man.

Pay to train people and then watch them fly abroad… very efficient!

Finally we get to the London based worker. He has done well, he earns £200,000, he can afford to part with a fair amount, right?

Well you have to take into account all the costs they incur. First of all you have the sports car. This is essential; there is no other way to travel in one of the biggest cities in the world than by a Porsche or Ferrari. No other vehicle can really make the most of their performance like a Porsche can when being driven from traffic light to traffic light at 12-25mph. All that German engineering really pays off when speed right up to 35 from the lights and then hit the brakes because there is a speed camera coming up on the left hand side. Of course it is not just the car you have to pay for, there is also the congestion charge and the parking which is currently about £7,000 per day. That 200k job doesn’t seem so much now does it?

That is before of course you have factored in your £5,000 per year coke addiction to compensate for the lack of endorphins in your body because you haven’t had time to have sex with your wife for the past 4 years.

Then you’ll need a substantial pension because you won’t have any children to look after you as you and your wife were too busy chasing your careers to have time for any type of family.

Hmmm guess that 200k doesn’t seem so much now does it? But don’t worry soon it will be less as you work 60-80 hours per week to pay for Mr Browns spending sprees!

N.B. I do appreciate there is on last category of rich person I have not addressed who will be hit by this tax, Mr ‘Daddy paid for me to go to Eton and Oxford/gave me a great big inheritance/got me a job in his company’ and now I have tons of cash even though I’m about as competent as any middle manager who just has to make do with the £20k to £30k that they earn through merit.

This is unfair and these people could be taxed for all I care, however that isn’t going to sort out the inequality of nepotism. That is a different matter altogether which ought to be addressed separately.