Over 500 entrepreneurs and business owners have asked the government to get rid of the 50p tax bracket in the next budget. Praetorian Marketing looks into their claims that it is damaging enterprise.
Today Praetorian Marketing read the open letter to the Daily Telegraph in which 537 small and medium-sized business owners said, “Given the current state of the UK economy, we urge the Chancellor to urgently consider scrapping the top rate of tax in his forthcoming budget.” The letter continued, “We believe that the richest should help the poorest in society. 1% of taxpayers are forecast to contribute nearly 28% of income taxes. But penalising high earners through an unfair, politically-motivated tax puts populist politics before sound economics.”
Praetorian Marketing, a direct sales and marketing company based in Birmingham is incredibly concerned about the difficulties facing small and medium businesses around the UK and are keen to find a solution that can help these businesses flourish once again. The rate was introduced by the Labour government in 2010 and Mr Cameron recently said that he still considered the rate a temporary measure.
Peter Rudge, managing director of Praetorian Marketing believes that this is always going to be a contentious issue. “On the one hand when low and middle income families are struggling, it seems to make sense that the highest earners take some of the slack. However this is at risk of damaging enterprise as people are less inclined to put huge amounts of work into their companies which then sees 50% of their earnings go straight to the tax-man. Indeed I feel that it will drive the wealthy and businesses abroad, to countries where tax rates are much lower. Then we won’t see their tax contributions at all and there won’t be as many jobs available.”
Rachel Reeves, shadow chief secretary to the Treasury has said that “cutting taxes only for the richest 1% cannot be the priority now. But these business owners are right to call on the government to take action to stimulate growth and jobs in our economy.”
Mr Rudge believes that a solution needs to be found soon. “Day in day out at Praetorian Marketing we hear of small businesses in our area shutting down, unable to cope with the tough economic climate. We need to find some way of stimulating enterprise, and therefore jobs, which will see Britain pull itself out of this slump.
