Dr. Art Laffer developed the Laffer Curve which proves that when you raise tax rates, tax revenues go down and when you lower tax rates, tax revenues go up.
Where have all the millionaires gone?That’s a question many Britons are asking now that new data show nearly two-thirds of the country’s million-pound earners have disappeared not even one year after a tax hike on the nation’s highest earners went into effect.
Britain’s Telegraph newspaper reports that just 6,000 Britons declared income over a million pounds ($1.6 million) to the nation’s tax authority, down from more than 16,000 in the 2009-10 tax year.
Former Labour Party Prime Minister Gordon Brown raised the top rate from 40% to 50% in 2010, shortly before losing the general election to Conservative Prime Minister David Cameron.
The closely watched wealth tax was a disappointment from the beginning, with the first monthly receipts last January bringing a half a billion pounds less than the same month in 2011.
The Telegraph reports the tax increase has so far cost the U.K. Treasury 7 billion pounds.