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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Why Labour's 50p tax plan may not pay off

Labour have mad a very simple calculation, which is that we are all a bit grumpy with big business, that we think the big business people who got very rich in the boom haven't suffered very much in the bust.

I think Labour are right in the sense that there is some grumpiness out there, there is no question in terms of opinion polling, it is a very popular measure.

It also has the advantage to them of being quite distinct, it follows on from their policy about an energy price freeze, this shows them as they would see it, as a party very much on the side of the people.

There are quite a few dangers and they are pretty obvious ones and that is people essentially say, yes the politics is terrific and perhaps cheer it all the way up to the election but then think, I am not so sure about the economics.

Francois Hollande has tried something similar in France and the French economy isn't doing so well. I think that is certainly what the Tories hope, that whatever people think in the short run, in the long run they decide the economics aren't good.

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