BUSINESS leaders say plans to introduce a 50 pence in the pound tax rate for higher earners would penalise businesses.
The proposals were announced by the Labour Party last week as a way of raising revenue to tackle the national debt but Tim Jobson, president of Stafford Chamber of Commerce, said it wouldn’t raise much tax.
“It’s not good for business. It discourages entrepreneurs and it will produce very little in terms of additional income. It’s just penalising successful business people just for political reasons. It’s a big disincentive.”
Labour’s Prospective Parlimentary Candidate Kate Godfrey said: “I’m a strong supporter of this like the British public. There’s a huge groundswell of opinion that this is a good thing. It brings the take home income of people who earn £150,000 down from £116,000 to £114,000. That’s more than six times what I earn in taxable income. It tells people we are in this together. It’s an emergency measure while the recovery of the recession is complete. We are asking people who have more money than most people can dream of to give up a tiny amount that makes no difference to them.”
Stafford’s Conservative MP Jeremy Lefroy said: “There’s a real question about whether it raises any more money. The idea of taxation is to raise more money. Surely one needs to look very carefully how much money is being raised to tackle the deficit. This is a higher tax rate than Labour thought necessary for 13 years.
“A tax rate higher than half your income is counter-productive. If you look around the world it’s pretty much as high as many go and higher than many other countries.
“When you add national insurance on top of that you are getting to pretty much half of someone’s income.”