What is the best way for people to escape poverty? By reading the press in the UK at the moment, it would seem that the best way would be too lower the tax on the poorest people in the country and increase taxes on the wealthy. Lowering taxes for the poorest is a good thing and would help them to climb their way out of debt, but taxing the rich more? That is not a good idea. If you want to know what taxing the rich does, just ask France.
France has a hate tax of 75% for top earners. Since it has been implemented a significant number of wealthy people and successful entrepreneurs have fled the country, and most have ended up in London where tax is lower. The media always fail to realise that it is the people with spare money who are the ones who create the jobs (And not just any jobs, but productive ones unlike government services).
All of this has lead to the owner of Iceland talking in the the media today defending his wealth:
The media have made negative comparisons between your wealth and that of your customers. Does that bother you?
Why is it an issue? My personal wealth is nothing compared to the wealth we’ve created. My hunger for business has resulted in 25,000 jobs and £600m in tax contributions in the past six years alone.
No one should have to defend their own earnings. Especially when they have used the spare money they had to start a successful business that employs thousands of jobs.
If the tax on the wealthy was even lower than it is now, it would mean they would have more money to plow into the economy, creating prosperity and jobs. Additionally, this lower tax rate would attract other entrepreneurs from across the world to the UK. The graph below shows the top tax rate and federal income from 1930 to 2010 in the US. It shows revenues can increase when the rich are taxed less because the economy becomes much more productive.
You may argue that with all these tax cuts, that the government would have to reduce in size, effecting local services. I have always believed that government should be as small as it possibly can be and local services can be, and should be run by the local people, not the bureaucrats controlled by MP’s and Lords in Westminster.