It’s an over-used term really, accusing a politician of being ‘out of touch’, and while I understand why the Labour Party would be wary of being seen as high taxers, I’ve never understood the logic behind the argument that a 50p tax rate on earnings over £150,000 is an attack on ‘aspirations’.
Whose aspirations exactly? Not the aspirations of anyone I know or have probably met in any serious way. You’d be in the top couple of percent of earners in the entire country if you earned around £150,000 a year.
Putting an extra 10p in the pound in tax on earnings over £150,000 isn’t going to hinder anyone’s aspirations.
So I do wonder about what planet David Cameron is on when he goes on TV and says he wants to scrap a 50p tax rate on earnings over £150,000 because it discourages people from “getting on”.
Imagine the sort of person you’d have to be to feel impeded and discouraged from earning more and getting a better job because you’d be paying marginally more tax on earning over £150,000 than beforehand, that your ‘aspirations’ were damaged.
‘Getting on’ to the vast majority of this country is simply having a job that pays the mortgage, puts the heating on and puts food on the table. It’s being able to get a promotion or pay increase that pays for clothes for the kids or for a family holiday.
It’s ridiculous to suggest people on £150,000 or more could possibly be impeded in ‘getting on’ by a 50p tax rate. As one of the highest earners in the country there is very little to stop you or your family ‘getting on’ in ways that the majority of the country can only dream of.
I’d say a better argument, which Cameron also briefly alludes to, is that it could impede Britain’s tax competitiveness compared to other countries, thus harming our ability to attract talent from abroad or keep what we currently have – but from memory I think a lot of the top rates in other countries start long before £150,000 so it’s very difficult to compare like-for-like.
Ultimately though, if Cameron genuinely does believe that a 50p tax rate on high earners discourages people ‘getting on’ it reveals the sorts of circles he moves in and the instinctive level of wealth that he views as ‘normal’, none of which disqualifies him from being Prime Minister but when his life informs his views it can have very real consequences for people in this country.