During my business career of four start-ups over 20 years, I have created around 1,500 jobs in the UK and around the world. Each time I've started a company, like many entrepreneurs, I've put everything on the line. I've reduced my income to zero or next to zero for at least a year, I've used savings to pay the mortgage and other household bills. The quality of life for my family has dropped every time, particularly during those early stages; no holidays, no eating out and so on. If the venture fails for any reason, I've put my family a step closer to having a permanent drop in living standards or even losing their home. I am not unique; this is the lot for the vast majority of entrepreneurs. Many go even further; remortgaging their homes or running up credit card debts in order to stay afloat and put food on the table, keep their homes warm and put petrol in the car.
My question with the 50p tax rate is how many people it will put off from leaving the apparent safe confines of corporate life in order to start their own businesses? Why should they risk everything if the government ultimately proposes to take half of what they make should the venture become a success? Taking half of everything an entrepreneur earns is obscene; no one is there to pick up the pieces and help should the worst come to the worst yet it is ok to take 50% if everything goes well! Entrepreneurs relief on capital gains is not enough as most entrepreneurs do not sell their businesses; they tend to run them for years as lifestyle businesses if they're successful.
The 50p tax rate is bound to stop people starting companies and therefore reduce the number of jobs that Britain creates in the future.
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I am heartily tired of the Cons making pro-business noises then caving into Messrs.Cable and Clegg and their bonkers ideas.
Steve Read
MD
Governments should stick to simply governing and quit trying to run peoples lives as they are proven to be hugely incompetent at managing the countries finances, even if they introduced a 99p tax they would still be completely incapable of focussing the funds efficiently.
Leave business to US the entrepreneurs
Mayank
It forgot the impact of ERS and EES NI & marginal VAT rate. So the 50% rate is more like 65%
There is, however, a deep issue: wealthy people (>£2m earned/£1m unearned annual) 'horde' wealth, taking it out of the economy, buying pointless imported luxuries & sinking cash into long term assets. They actively harm growth.
The 50% rate comes in too early, hurting the "merely industrious", but is nothing like high enough once income is serious (>£10m annual).
Later & Higher is better
There is not, & never has been, any evidence for "trickle down wealth", the rich are value sinks, not national asset.
Taxing, & passing back to the low paid/govt employees lifts the economy quite well compared to super-rich.
PS: the megarich (>£100m) actively become anticompetitive , antidemocratic & dynastic; that is a BAD thing. Tax them!
I think you need to distinguish between entrepreneurs and others. Us entrepreneurs do generate wealth that trickles down. Just one of the companies that I co-founded currently employs more than 200 people in the UK with a combined annual payroll and employers NI bill in excess of £12m. Those jobs wouldn't have existed without the four of us starting the company. If that's not trickle down, I don't know what is.
Again, I pose the same question; why should people like us put everything on the line and create jobs if the government proposes to take half of what we make if we're successful? And how many would be entrepreneurs does that tax rate put off from taking the plunge?
Your world of tax the rich and give unproductive jobs to the poor has proven not to have worked. Look at China if you want a real life example.
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