Monday 26 November 2012
The government should be wary of increasing taxes for the wealthy as it continues to promote an economic recovery led by the private sector, it has been suggested.
Phil McCabe, spokesman for the Forum of Private Business, said that such a policy could have a damaging knock-on effect for innovation in the UK.
"The concern is that increasing taxes for the wealthy will necessarily mean adding to the tax burden faced by entrepreneurs," he stated.
Mr McCabe said his organisation is of the view that small business owners already pay more than enough in tax.
What they actually need is tax reductions to stimulate the economy, he noted.
Pushing up tax for people running their own business could potentially lead to a 'brain drain', where entrepreneurs choose to set up their companies outside the UK, Mr McCabe said.
"This is obviously not what we want to see and not what the country needs," he stated.
The coalition government has taken steps to encourage entrepreneurialism by reducing the small business rate of corporation tax during the current parliamentary term.
However, increasing income tax for high earners could see individuals pay more tax on the salaries they are paid by their own companies, ultimately leaving such individuals in a worse financial position.
Posted by Steve Williams