Criticism of Labour's new 50p tax rate grew last night after City Minister Lord Myners revealed the Treasury's forecasted gain from the controversial move would have to be recalculated.
He said behavioral changes, such as an exodus of high net worth individuals,and other "less drastic" means of tax dodging, would decimate the expected revenue gain, writes the Daily Mail.
Lord Myners maintained those earning over £150,00 - the rate at which the higher rate kicks in - constitute just 2% of the population and said the Government would look to reduce the rate as soon as it "made sense to do so".
This contradicts previous indications by the Government which suggested the top rate would remain in place over the next four or five years of the next Parliament.
The admission comes as a leaked document shows there is broad agreement in the Treasury that "spending restraint is more likely to generate better economic performance than tax increases".
Lord Myners insisted only "very small" numbers of people are leaving the country as a result of the new tax. However, he conceded the Government has "made adjustments for the behavioral consequences" of upping the tax rate.
"But we still believe it will be beneficial," he said.
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