By Paul Goodman
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Perhaps George Osborne will scrap the 50p budget in the budget, or cut it to 45p, or do nothing at all. This morning's claims about his plans are more likely to come from the Liberal Democrats, in one of the further public negotiations that convey a loss of control by the Chancellor. You can find them in the Guardian and the Financial Times.
But amist the froth are to be found two solid nuggets of fact. The Guardian reports:
"A preliminary study conducted by Customs & Excise for the Treasury, due to be published next week, is expected to show that the 50p rate – introduced by Labour in 2010-11 for those earning more than £150,000 a year – is bringing in hundreds of millions, rather than billions, of pounds. An earlier Treasury study assumed it would raise £2.6bn."
– And the F.T says –
"However, he is expected during the Budget to unveil figures from the tax authorities showing it has raised less than £1bn, far below the £2.5bn previously estimated. These will add to pressure from UK business leaders and his own MPs to scrap the tax."
This re-raises the question of at what level tax rates lose revenue rather than raise it (Fraser Nelson believes that the 50p rate has cost the Treasury takings already), and therefore whether lower rates would raise revenue rather than lose it.