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Labour would reintroduce 50p tax

29.01.14

Shadow Chancellor Ed Balls has said that Labour would reintroduce the 50p top rate of income tax, if they are re-elected next year.

The top rate of tax applies to anybody who earns £150,000 or more, and it currently sits at 45% after the coalition reduced it in April 2013.

Many have already suggested that reintroducing the 50p tax rate (which the previous Labour government introduced back in 2010) would slow down the economic recovery.

London Mayor Boris Johnson is one of those to voice his concerns over the potential 5p increase, insisting instead that the current government lower the top rate of tax to 40p.

In his column in the Daily Telegraph, Mr Johnson said:

"At the weekend Balls showed his refusal to learn. By announcing that he would now like to push the top rate back up to 50 per cent, the shadow chancellor is effectively declaring that he would not mind if this money had never come to the Treasury at all.

"He would rather have the exquisite please of seeming to stick it to rich people than stimulate the growth and the investment that actually produces more taxation. He would rather cut his nose to spite his face."

Many, including Mr Johnson, argue that having a higher tax band makes the UK less appealing to entrepreneurs and that increasing the tax bracket would ultimately slow down the economic recovery.

Over the weekend, 24 senior business figures, including West Ham United vice-Chairman Karren Brady, wrote an open letter to the Daily Telegraph saying that the move was a 'backwards step' and would result in job losses.

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