Tax Rise Plan Won’t Boost Coffers
Tuesday, April 21, 2009 14:31
A think-tank has warned that, the plan to increase tax for top earners are unlikely to produce the predicted boost to treasury coffers. The Institude for Fiscal Studies said a 45 per cent tax rate for the one per cent of the population earning above 150000 pound would not raise the 1.6 billion anticipated by Chancellor Alistair Darling in his pre-Budget, the IFS said the move would probably raise only about 500 million pound and could cause revenues to fail if measures to stop tax avoidance were not put into place. The IFS said the rate increase, which is due to be introduced in April 2009, could force some higher earners to leave the country or retire earlier.It’s said that those who stayed in the system would look for ways to reduce their taxable income by working less or converting it into other types of earnings which are taxed at lower rates.Plans to withdraw the income tax personal allowance from those on wages of 100000-plus pound in two stages from April 2010 were more likely to raise the 1.6 billion. The move creates two bands, between 100000 pound and 106475 pound, and 140000 pound and 146475 pound, in which the margin tax rise is 60 per cent.
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