RE: Climate action.9 Sep 2025 12:19
Maybe you are too young to remember the disastrous Wilson government policy that saw massive tax rises on unearned and earned income. Exit the big earners at that time... Extraordinarily, also an interesting fact that Income tax is a temporary tax....mandate renewed every year. Pitts original Tax to pay for removing Napoleon collected less than expected first time round!
" There have been two tax years since WW2 when income tax rates exceeded 100%. In 1947/48, Clement Atlee’s Labour government imposed a ‘special contribution’ of 50% on investment income above £5,000 – this applied on top of basic rate income tax at 45% and surtax at 52.5%, giving an overall rate of £147.5%! A similar special charge imposed by Harold Wilson’s Labour government on investment income over £8,000 for the 1967/68 tax year resulted in a slightly lower effective rate of 136.25%.
Even leaving those two anomalies aside, tax rates remained at eye-watering levels until 1979 despite the abolition of surtax in 1973, which was simply replaced by higher income tax rates by Labour chancellor Dennis Healey (who famously said “I warn you that there are going to be howls of anguish from those rich enough to pay over 75% on their last slice of earnings”).
The turning point came shortly after the Conservatives, under Margaret Thatcher, won the 1979 election. In his post-election Budget, Geoffrey Howe retrospectively lowered tax rates from the start of the 1979/80 tax year (the top rate dropped from 83% to 60%). The tax cutting trend continued under the Conservatives, culminating in Nigel Lawson’s 1988 Budget which abolished various intermediate tax rates leaving just a basic income tax rate (cut from 27% to 25%) and a higher rate (cut from 60% to 40%)."
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