Rich pricks are rich because they are smart

The Poms are copping it hard from their rich pricks who are taxed too much.

The Institute for Fiscal Studies warned that the tax has led people earning more than ?150,000 to resort to legal tax avoidance schemes to escape paying the higher rate.

The findings will increase pressure on George Osborne, the Chancellor, to scrap the 50p rate next year.

Paul Johnson, director of the IFS, said: ?It looks like the 50p rate may be too high and that it is possible it will reduce tax revenues.

?It could lead to more people investing in tax avoidance, illegally hiding their income or even leaving the country altogether. I wouldn?t have introduced the 50p rate in the first place?

The findings contradict previous estimates by the Treasury that the 50p rate would raise ?2.7 billion a year. Mr Osborne has asked HM Revenue & Customs to report on the impact of the tax by next year, which could lead to it being abolished by 2013.

According to the IFS, the highest rate which can be introduced without a reduction in tax revenue is about 40 per cent.

Socialists of course argue that tax rates on the rich should be even higher, but there is a point, and in the UK it looks like it is 50% where it becomes detrimental to the revenue base.

There is ample evidence world wide that cutting tax rate actually increases revenue. Of course the other obvious solution to re-building a country’s coffers is to spend less as well. Fat chance of the entitled voting for that.