“Likely”, the possible cost could be over £1bn.
This chart is from the very recent Institute For Fiscal Studies briefing note that was anticipating a 45% rate (see page 14 for chart):
http://www.ifs.org.uk/bns/bn84.pdf
The most startling aspect when the IFS looked at the sums:
It would appear that the Treasury has not allowed the behavioral response to affect revenues other than income tax receipts.
This is quite extraordinary. A very cheap piece of electioneering by Labour will turn into a very expensive debt for taxpayers.
Tags: Budget, Election, Institute for Fiscal Studies, labour, Laffer Curve
