50% of old bollocks

In the build up to next week’s Budget, I’ve been hearing a lot about the 50% rate of tax and whether it has actually raised any money. I say hearing, ‘cos I’ve not really listened.

I’ll tell you now, I think it’s a pointless discussion.

It’s not that I think there shouldn’t be a discussion over the additional rate of tax (for that is it’s name, but I’ll adopt the convention). I just don’t think its effectiveness can be determined in any quantitative way.

I mean, how is anybody going to figure out with reasonable certainty what would have been taken in tax in its absence?

If you increase the rate of tax, you increase the incentive to use tax avoidance. And why not? It’s legal and you don’t need to anything unethical.

See, I don’t think there’s anything wrong with adapting your behavior to reduce your tax liabilities.

Neither does HM Treasury or HMRC, for that matter.

There are plenty of reliefs and exemptions designed to encourage certain behaviors and reduce others. All of them. Any tax relief you care to name.

But I digress. My point is, taxation changes behavior. And always in favor of reducing the tax burden.

(I’ve just spent 5 minutes scratching my head trying to think of a single person, client or otherwise, who has voluntarily wanted to pay more tax. I think that’s a fair statement.)

So the question isn’t how effective is the 50% rate at raising tax. It’s “how effective is the 50% rate at incentivising tax avoidance?”

Unless you can answer that question with the value of “new business” for 2010/11, you’re talking shit if you think you can quantify the tax raised by the additional rate.

I can’t answer it. I haven’t seen anybody who can.

But I can tell you from a personal level… The 50% rate is effective, very effective in fact, at incentivising “bespoke tax planning”…

What I got

It’s fair to say, I’ve always seen blogging as a fairly self-indulgent activity. I’ve never felt the desire to share my thoughts with others, nor really had the desire to read others’.

And I don’t think I’ve changed my mind all of a sudden. But I’ve got issues and anything is worth a shot.

I say issues… it’s nothing major. Just a bit depressed. Just a bit bored. Just a bit annoyed. So, I take fluoxetine with my whiskey, have a chat and a laugh, and then start a brawl. In that order.

You see, you’ve got to do something with that stuff. Otherwise it takes you down. So I’m going to write about it and then probably delete it all in disgust at myself.

And I’ll still take my pills, have a laugh and then smack the crap out of somebody. But I’ll probably feel better about it.

To be honest, I just need some place to vent my ire which doesn’t have a 140 character limit to it…

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