Von Aldo

Why Raising Taxes Too High Doesn't Work, U.K.'s Example

The news from today's Times (of London) should be carefully read by American politicians who would raise taxes on America's top earners:

"High earners will cost the public purse hundreds of millions of pounds through tax dodges as they avoid the new 50 percent rate of income tax, a minister indicated yesterday."

Wealthy people have ways of getting around taxes, in this case a top rate of 50 percent in Britain. The article continues:

"Mike Warburton, senior tax adviser at Grant Thornton, one of Britain’s biggest accounting firms, said that clients were pursuing four main ways to avoid paying half their salary in tax: bumping up this year’s pay; storing up pay in their firm to be drawn down at a later date; leaving the country; or choosing to pay it to charity rather than the taxman. "

It will be interesting to see how effective Obama's raising of taxes on the rich will work out. In his budget released yesterday he's let the Bush tax cuts expire.

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