More evidence from Britain against the jaw-dropping 80% tax rate on the rich proposed by Thomas Piketty in his new book "Capital in the Twenty-First Century". Lower tax rates incentivise success and investment and produce a bonanza for the taxman. Lower tax rates also increase the number of people in the middle class. For example, the top 1% (the mega-rich) in Britain now account for 30% of income tax revenue compared with a meagre 11% share in l979 when the rates were higher. The top 10% of earners (including the middle class) now pay 59% of all income taxes compared with only a 35% share in 1979. The main effect of higher taxes is simply avoidance.
Piketty argues money begets money so the mega-rich must get richer. But most names on the Sunday Times Rich List in 2013 were not on the List 20 or 30 years ago. New entrepreneurs and wealth creators replaced "old money".
Finally, home ownership is not the only source of wealth held by ordinary people. The vast majority of wealth (capital) in the Western world rests in pooled pension funds and other financial instruments also owned by ordinary people. When banks and other financial institutions get a better rate of return, the benefits flow back to ordinary people not the mega-rich. Clearly, the left will have to keep their eyes on the horizon for the real Messiah.....it's not Thomas Piketty.
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