50 per cent tax change 'not surprising'

The Chancellor's recent decision to drop the 50 per cent rate of tax and instead implement a maximum tax rate of 45 per cent has been described as not entirely surprising. A recent article from the Financial Times Adviser noted that various reports had been building up to confirming that the tax was no longer an effective stream of revenue generation. For example, a paper from the Centre for Economic and Business Research described the 50 per cent tax as having “good intentions [but] bad outcomes”. For example, a new generation of wealth creators have more legal choices for moving their funds abroad, along with various financial products that allow individuals to minimise their exposure to the high income tax rate. These and other developments have allowed people to avoid the tax in a substantial number of cases, something that was not possible when the tax was first introduced. Unfortunately, while the reduction to a 45 per cent top rate of income tax is an improvement, analysts have suggested that it won't be enough to stop people continuing to take action to avoid the tax.

http://www.50percenttax.co.uk/index/2012/4/2/50-per-cent-tax-change-not-surprising.html