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Is the 50% tax band ripping the government apart?

While the introduction of the 50% income tax band has prompted a significant backlash from the high earners in the UK there have also been concerns expressed within the Labour Party. Many backbenchers believe that what many see as a blatant "political move" could seriously backfire at the next general election with voters under a perception that they are being "played".

At a time when the UK economy is still encountering significant problems, home repossessions continue to grow, employment is increasing and incomes across the UK have never been tighter many believe politics has taken over from common sense. The introduction of the Internet and the ability to work anywhere in the world and have access to networks and systems could encourage entrepreneurs to leave the shores of the UK. As a consequence, the 50% tax band would have very little impact on income received by the Treasury and could be detrimental to UK finances in the longer term.

Indeed the Treasury has apparently produced an internal modelling report which suggests that 69% of those who should be hit by the increase in taxation will find a new way of juggling their finances to avoid the increase.

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