After then-British Prime Minister Gordon Brown raised the top tax rate on those making more than £1 million to a whopping 50%, nearly two-thirds of British millionaires fled the country to avoid taxes, fewer entrepreneurs came into the country, and the government took in lower tax revenues than it did before the increase.
According to the Telegraph, “in the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million.” After Gordon Brown introduced 50% tax rate before the last general election, that number dropped to a mere 6,000.
In addition, the tax increase actually “cost the UK £7 billion in lost tax revenue” as wealthy Britons moved their wealth abroad. Foreign entities even engaged in advertising campaigns to lure British millionaires away.
Harriet Baldwin, a Conservative Member of Parliament, uncovered the numbers and said the Labour Party’s “ideological tax hike led to a tax cull of millionaires.”
“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,” she said.
George Osborne, the Chancellor, announced earlier this year that the top rate would be reduced from 50% to 45% next April.