Millionaires Flee Britain To Avoid Paying High Taxes, Country Loses £7B

Almost two-thirds of Britain’s millionaires have left the building. Most of the country’s top earners fled after the introduction of the Labour Party’s controversial 50p tax, and at least in Britain, higher taxes for the rich are seemingly contributing to less revenues as the country reports a stunning loss of £7 billion in taxes, according to The Daily Mail.

Higher taxes on the rich has become a popular talking point in Western politics lately, and it has come up in the US quite a bit as politicians race to answer the problem of the coming fiscal cliff. In Britain, higher taxes on the rich is an idea currently in practice, albeit in an extreme way, and against the Labour Party’s expectations of higher revenues, the plan seems to have backfired in an unexpected way.

Millionaires are fleeing the country.

According to The Telegraph, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs in the 2009-2010 tax year. This number dropped to 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election.

In response, Chancellor George Osborne has announced a reduction in the tax rate to 45p for next April. Since that announcement, those reporting an annual income of £1 million has inched up slightly to 10,000.

Conservative MP Harriet Baldwin, who uncovered the latest data, criticized the Labour Party’s higher tax initiatives:

“Labour’s ideological tax hike led to a tax cull of millionaires. Far from raising funds, it actually cost the UK £7 billion in lost tax revenue. Labour now needs to admit that their policies resulted in millionaires paying less tax and come clean about whether they would reintroduce this failed policy if they were in power.”

Labour officials and Liberal Democrats are criticizing a the call to return to a previous system of a basic and top rate of tax, calling it a “tax cut for millionaires.” In fact, they seem to want to increase taxes on the rich even more to … what? Make up for the wealthy who have left?

We can throw stones at the rich all we like, but the only thing this says to me is that we need think of a bipartisan and uniquely American solution to our economic woes.