Osborne facing renewed pressure over 50p tax rate
01 Mar 2012
The Chancellor George Osborne is facing renewed pressure to scrap the 50p rate of income tax after businesses accused him of putting 'populist politics before sound economics'.
In a letter to the Daily Telegraph, the owners of 537 small and medium-sized businesses warned that the 50p rate was 'restricting growth' and 'damaging the economy.'
The entrepreneurs said: 'Given the current state of the UK economy, we urge the Chancellor to urgently consider scrapping the top rate of tax in his forthcoming Budget. The tax, which is in effect a 58p tax after national insurance is taken into account, puts wealth creators like us in a very awkward position.'
The letter continued; 'we believe the richest should help the poorest in society. 1% of taxpayers are forecast to contribute nearly 28% of income taxes. But penalising high earners through an unfair, politically-motivated tax puts populist politics before sound economics.'
'The result is that the 50p tax is set to reduce government income and damage the economy, the public services and charitable giving.'
Speaking earlier in the year, the Prime Minister David Cameron appeared to suggest that the 50p tax rate will remain in place until the end of the parliament.
The 50p income tax rate was introduced by Labour in April 2010 and affects those earning over £150,000.