Incoming prime minister Gordon Brown yesterday ruled out creating a new 50% income tax band.
He was asked by a GMB member at the trade union’s annual congress in Brighton whether he would charge 50 pence in the pound for those earning above £100,000 per year.
Brown replied: “I think it is right that we stick to our manifesto promise that we will not raise the top rate of tax.”
However, he raised hopes of a change in the tax system that is allegedly exploited by private equity companies.
Presently, private company owners, who often rely on loans to finance buyouts, pay lower corporation tax as interest payments on debt are tax deductible. They also benefit from a capital gains tax rate of just 10% when selling a firm that has been privately owned for two years.
“In March, we created a review into the issue, and we will deal with this important issue to make sure there is justice and equity in that area,” he said.
GMB general secretary Paul Kenny said: “From what Gordon Brown told the congress today, the GMB concludes that the fat cats are losing the argument on tax.”