IFS: 50p tax will raise 'little revenue' for UK economy

A leading centre for independent economic research has said the best evidence currently available suggests a 50p tax rate backed by Labourwill raise "little revenue" and make a "marginal contribution" to reducing the budget deficit.

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IFS: 50p tax will raise 'little revenue' for UK economy

A leading centre for independent economic research has said the best evidence currently available suggests the 50p tax rate will raise "little revenue" and make a "marginal contribution" to reducing the budget deficit.

The Institute for Fiscal Studies said the best estimate, provided by HM Revenue & Customs (HMRC) in 2012, suggests that cutting the 50p rate to 45p could reduce revenues by about £3.5 billion in 2015-16 if there was no change in behaviour by affected individuals.

However, once one allows for a change in behaviour, HMRC's central estimate was a cost of just £100 million, a sum the IFS describes as "a very small amount of money".

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