The rich have paid more in tax under the Coalition than at any time under Labour, according to a senior Liberal Democrat treasury minister. The comments from Danny Alexander, the Chief Secretary to the Treasury, come on the day that the top tax rate for the richest falls from 50 to 45p in the pound.
Mark Littlewood, the IEA’s director general, said: “The introduction of the 45p top rate of income tax does not go far enough. Any tax cut is good for stimulating the economic growth we so badly need, but the Chancellor should have been braver and cut it to 40p when he had the opportunity.
“When the rate was cut from 60 per cent to 40 per cent in 1988, tax revenues soared because it created the incentive to work and invest in Britain. This is the kind of action we need now to boost our faltering economy.
“A considerable amount of those earning over £150,000 create jobs and as we try to reform welfare to make work pay, we should also be ensuring we are creating the right environment for job creators to flourish.”
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