Should we cut the top rate of tax?

I lean towards no on the basis that tax revenues from the 40% threshold never fell once it was raised, but we've got an extra 9bn in revenue from the 45% threshold. This indicates that 45% is closer to optimum than 40%. I also feel that 45% is a fair enough rate.

I would however lower the 45% threshold to 100k and use the revenues to merge NI, cut the new IT by 2% for all (so rates become 30, 40, 45) and then raise the threshold.

Quite interested and pleased to hear a Tory say this.

Yes, but only after the deficit has been significantly closed down.

Why? Raising it lost the country money. Putting it down to 45p increased the proportion of tax paid my the rich.

Cutting the top rate will help us raise the money to pay off the deficit faster.

There's no evidence that cutting it to 40% will actually gain revenue (granted it's hard to tell since we had a recession before it was raised). What we do know is that the 45% raises about £9bn.

IIRC, and feel free to correct me, that £9bn was the result of cutting the rate from 50p to 45p. It is not the case that we're raising £9bn more with 45p than we would with 40p. That's why Johnson, Redwood et al are extending the logic by calling for a further cut.

Even if you accept the logic that reducing the top rate of tax raises revenue (which I absolutely don't) , then there would still be an optimum level, or you'd just end up lowering it to 0%.

Unless you think 100% tax rates are likely to raise much money, or indeed any, one must accept that there is a point at which tax rises lower the amount of tax collected.

But you're correct there must be an optimum level. Still, we've not had a cut in the top rate of tax for a long time which didn't raise revenue, so I don't think it's unreasonable to try it again.

Boris Johnson has said that we should be cutting the top rate of tax to 40p (from 45p). I definitely agree, as long as the cut brings in more revenue. It might seem a little unfair to cut taxes for the wealthy but any extra money they bring in could prevent further cuts do disabled people etc. Do you think its more important to bring in revenue or appear "fair"?

Only if you allow for those at the top to exploit the system and tax avoid.
So no, I don't agree that raising taxes will reduce revenue if we crack down on tax evasion.
I don't think we should tax 100% though, of course not.

Also to say that 45% raises more then 50% is a classic example of mixing cause with correlation to suit your political ideology.

Unfortunately I don't think you understand the system. For a start there are perfectly legal ways to avoid high taxes, like leaving the country, which we can't stop. Even if that weren't true, high taxes discourage rich foreigners from leaving other countries to come here, how are you going to legislate against that?

I don't see how it's mixing cause and correlation at all, it's pretty clear tax receipts went down when the rate was raised to 50p and up when it came down again, just as they went up when the rate was cut to 40p under Major.

Unfortunately the left is, once again, ignoring realities it doesn't like. It's pretty clear that raising money isn't actually their priority, rather than ****ing the rich for no reason other than it feels satisfying. If the left were practical, as they used to be under Blair (for all his many, many faults), they would support these sort of simple measures, which raise money for their precious public sector.

It's an absolute fallacy that lowering taxes will bring in more revenue.
It's simply trying to justify and ideological tax cut with false economics.

Lowering taxes can bring in more revenue. If tax was cut from 99% to 40% people would work more and generate more revenue. Lowering the tax from 45% to 40% might have a similar effect. You would have to experiment to find out...