The government admitted today that 50p tax rate payers alone did more than £6 billion of tax avoidance on one income tax ruse alone.
No, that\’s not what the government has done at all.
They have admitted that a change in the tax rates changed peoples\’ behaviour. Which really shouldn\’t be a surprise, a change in incentives will lead to a change in behaviour.
This is why we tax petrol for example, so that people will use less of it. And if people drive less as a result of a rise in fuel duty we do not in fact call this tax avoidance, we call it changing behaviour in the face of changed incentives.
This is true of booze taxes, fag duty, airline passenger duty: why anyone at all would think that it\’s different for income tax I\’m not sure.
There really is a Laffer Curve you know.