Does it work and if so, when?
There has been debate in recent years as to whether those with an income over £50,000 or so should pay income tax at 40, 45 or 50%.
This is a pretty scholastic debate which has assumed totemic status, the question really being whether you prefer to tax the higher earners, to hit on the poorer levels of society through VAT and the rest, or simply not to support all the services that the state has supported.
The Labour manifesto seems to envisage a figure of £80,000 at which a higher rate might apply. That does not seem unreasonable: It is getting on for three times the median. One might note that the average is being distorted by the steadily increasing proportion of those in work who are on the minimum wage. Even if Labour’s proposed £10 an hour was instigated (and assuming - a big assumption - that the individual worked a steady 40 hour week), that equates to an annual income of £20,800. Would you like to live on that?
What of a rise in corporation tax (which is of course at a historically low level at the present time)? Dire consequences are forecast. Companies will leave the UK rather than pay an extra one or two per cent in tax (not necessarily the same companies as will leave because of Brexit). This is probably sabre-rattling nonsense. No serious country works with a corporate tax rate of 17% and measures - international measures - may be needed to ensure that “residence” in tax havens is overridden. Any manifesto commitment to reduce avoidance will be worthless without international agreement as “one country” legislation will not work, and the promise will be as empty as the last few declarations of war against avoidance.
Furthermore it might discourage the existing behaviour of large corporations of paying out so much in dividends as to inhibit the capital investment that in the long-run they all need.
There was of course a time when tax rates were much higher than they are now. From the Second World War until Nigel Lawson tore up the rates and abolished surtax, everybody paid much more tax and most of them (while grumbling) did not seem seriously dissatisfied.
Your question here is whether the behaviour of the tax avoidance industry, aided by nods and winks from the Tory party, has been good for the country. Think on.