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Wednesday, February 22, 2012

Obama's Class War Rhetoric Vs Reality: Surtax On Rich In UK Causes Loss Of Revenue

By Susan Duclos

They say that a smart person learns from his or her mistakes but a smarter person learns from other people's mistakes.

Barack Obama has made his class war rhetoric into a recurring theme in his reelection campaign, pitting one group of people against another, even using his 2013 budget to promote the theme, knowing it won't even get a vote, as is, in the House or the Senate.

Obama speaks quite often about raising taxes on the rich, calling it fairness, but the lesson to be learned from the UK, which has done exactly that very thing, shows that instead of raising more revenue, it actually lead to a loss of £509 million compared with January 2011.

The Treasury received £10.35 billion in income tax payments from those paying by self-assessment last month, a drop of £509 million compared with January 2011. Most other taxes produced higher revenues over the same period.

Senior sources said that the first official figures indicated that there had been “manoeuvring” by well-off Britons to avoid the new higher rate. The figures will add to pressure on the Coalition to drop the levy amid fears it is forcing entrepreneurs to relocate abroad.

The self-assessment returns from January, when most income tax is paid by the better-off, have been eagerly awaited by the Treasury and government ministers as they provide the first evidence of the success, or failure, of the 50p rate. It is the first year following the introduction of the 50p rate which had been expected to boost tax revenues from self-assessment by more than £1billion.

There is a lesson here for Obama, liberals and Democrats, but it is doubtful they will learn it when class warfare has been their theme for decades.

The rich will pay more in taxes than anyone else, but there is a limit to how much of their income they will simply hand over to a government that cannot control it's own spending habits.