City bosses want 50p tax rate dropped
By politics.co.uk staff
The Treasury faces fresh pressure to abandon the 50p tax rate after a letter from City company bosses demanded the move.
Over 30 company chief executives and managing directors have signed a letter to the Telegraph newspaper calling for the 50% income tax rate, which is levied on those earning over £150,000, to be dropped.
The signatories stated their support for the coalition's deficit reduction plan "in general" but called on ministers to boost public investment and continue the 'one in, one out' approach to regulation.
Abandoning the 50p rate and raising the personal allowance by £630 to £8,105 by April 2012 would "boost demand and confidence at a modest short-term cost to the exchequer", they argued.
The letter stated: "An early removal of the temporary 50% tax rate would attract wealth generators to the UK and support the entrepreneurs we need to help us grow the economy and provide jobs.
"We are confident that the cost to the Treasury, if any, in the short term will not be material and that the advantages over the life of this parliament in terms of generally increased economic activity will more than outweigh any direct costs."
HM Revenue and Customs is currently reviewing the amount raised by the 50% rate, which critics claim is not bringing in sufficient levels of revenue.
Chancellor George Osborne will have a tough fight on his hands to persuade his Liberal Democrat colleagues that the 50p rate should be dropped, however.
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