By Marcus Leach
New figures have revealed that since the introduction of the 50p top rate of tax that almost two thirds of the country's million-pound plus earners have left Britain.
Harriet Baldwin, the Conservative MP, uncovered the figures and said that instead of raising funds, the top rate of tax has cost the Government money.
“Labour’s ideological tax hike led to a tax cull of millionaires," she said. "Far from raising funds, it actually cost the UK £7 billion in lost tax revenue.
“Labour now needs to admit that their policies resulted in millionaires paying less tax and come clean about whether they would reintroduce this failed policy if they were in power.”
HMRC said that in the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs. However, this number fell to just 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election.
The figures have been seized upon by the Conservatives to claim that increasing the highest rate of tax actually led to a loss in revenues for the Government.
Richard Baron, Head of Taxation at the Institute of Directors, said that we must learn lessons from this.
“As many people argued at the time, the 50p tax rate was a self-defeating measure," he said.
"Ignoring the mobility of the rich meant that the rate went up but revenues went down. This must stand as a stark warning against any politician thinking they can hike taxes and automatically grab cash for the Exchequer. The higher and more complex our taxes become, the less effective the tax system is.”
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