Thursday, February 23, 2012

British Discover Raising Tax Rates Lowers Revenue

British Discover Raising Tax Rates Lowers Revenue:
The British government has tried to raise tax revenues by raising tax rates on the highest income Britons. The January 2012 self-assessed tax returns were anticipated to provide more revenue because it was the first reporting period of the new, highest 50% tax rate for the highest earners. The Treasury, however, has reported that instead of tax revenues rising during that reporting period, revenues actually dropped from �10.86 billion in January 2011 to �10.35 billion in January 2012.

Senior British Treasury officials have said that this was the consequence of rich Britons maneuvering to avoid paying the higher tax rates. The Treasury data does not reveal exactly how much of the drop in revenue occurred in the new, high tax bracket (the data covered all self-assessment reporting for that period); no one doubts where the drop in taxes occurred.