Hell no, they won't come!
Posted by Christie Malry on October 24, 2011 at 8:55 pm
Bad news for those still pitifully claiming that the 50% tax rate won't lead to people leaving. From Accountancy Age:
Walsh [Chief Executive of Diageo] added: "At the moment, if I am going to create jobs, I am not going to create them in the UK because it's a high-cost environment. If I employ staff in Singapore with a 10% tax rate, I don't have to pay them as much for them to feel good and to go home with more money."
So, even if you accept that people won't leave - and I don't - here is a company saying that he will create new jobs in another country because he simply can't afford to base those jobs in the UK.
But there's more:
A study published by Lloyds TSB showed that 15% of Britain's 5.5 million expatriates have cancelled plans to return in the UK.
Oops! Not only are new jobs not being created here, but existing expats increasingly don't want to come back home. Which is very uncomfortable reading for those that still want to claim that the 50% tax rate doesn't hurt our economy.
How many of the Diaego jobs would be subject to the 50% rate? How many of the ex-pats would be subject to it? 15% of 5.5m is 825,000 people.. we've not got that many people earning £150k in the UK today.
These quotes may well form the basis of a discussion - but it's not a discussion about the 50% tax rate.
The point is that the 50p rate may have effects beyond the first order effects of those directly hit by it. It may impact corporate location decisions and individuals' choices about where to live, even if they themselves are not subject to the tax (because in the first case the jobs don't yet exist and in the second case they're not currently in the UK). Politicians tend to consider only the first order effects and to underplay the second order downsides.