With the Ontario NDP demanding a tax increase on upper income earners as a condition to prop up the McGuinty government, and the Alberta Liberals and NDP running on creating new tax brackets for the wealthy, it’s worth taking a look at the news out of Britain. Despite the fact that the British government raised the top rate from 40%-50%, and revoking their personal exemption, the top 1% of income earners paid 100 million pounds less in taxes. This stands in start contrast to the 3 billion pound revenue increase that was projected from the tax hike.
From today’s Globe and Mail:
“In an assessment of Labour’s high marginal rate, IFS economists Paul Johnson, Mike Brewer and James Browne concluded that high-income earners used legal means to reduce their taxable income. They increased pension contributions. They delayed receipt of income. They converted income to capital gains (taxed at 28 per cent). They split incomes with spouses. They reduced taxable income by working less, by retiring early – and by moving to countries with lower tax rates.”