“London is full of leaving parties for people heading to Dubai or Asia. A recent survey of millionaires by Skandia, a financial consultancy, found that just over half say they may emigrate. Of those thinking of leaving, high tax was the biggest factor. For a Government that collects £14 billion in tax from 14,000 millionaires, this is something of a concern.

The basic fact is that Britain is hugely dependent on a very small number of highly mobile taxpayers. The best-paid 1 per cent earn 13 per cent of salaries paid in Britain, but contribute 28 per cent of income tax collected – this is what you might call a “fair share”.”

The 50p rate was never about economics. It is about politics; forcing the nasty Conservatives to prioritise their rich chums in the City while the majority are squeezed. Or alternatively have a long running internal barney on a subject that reminds people that many nasty Tories want to help their rich chums in the… you get the picture.

What makes the trap so tricky is that our coalition partners have a strong interest in maintaining its existence.  The Lib Dems 2015 strategy is based on portraying themselves as the nice part of Government. “You may not like the tuition fee rises, but just imagine what the Tories would have done if we hadn’t been there” they will say on the doorstep. But as Fraser points out it is not beyond possibility to neutralise the Brown Bomb.

• While the public is still in the mood to emotionally lash out at “bankers” they are more concerned about improving the economy, getting growth. If the economy picks up by 2015 few people will care about the death of the 50p tax.
• The public wants leaders to lead, and make responsible decisions. If it is constantly explained that reducing the top rate tax to previous levels will raise more money for the nation then the public will see that the Government is prioritising economics over politics.
• As Fraser points out, there are other ways of raising tax revenue from the richest, thus ensuring that “we are all in this together”. Minimising the 50p tax should be accompanied with strong messages around how banker bonuses will be taxed if they are unreasonable, and with a promise to reform the economy in such a way that people become responsible for their actions. It is also worth pointing out the 50p tax does not just impact on financiers, it catches doctors, headmasters, entrepreneurs ect.
• The decision to raise more tax revenue should be linked with raising the tax threshold to £10,000. Collecting more money from the rich will allow the Government to redistribute wealth to thousands of the poorest working families. Most people understand that in the current economic climate every progressive action needs to be paid for somehow.

Returning the top rate of tax to 40p needs to happen at the same time as the poorest in our society are lifted out of the tax system, and needs to happen soon. If George Osborne and friends truly believe that returning the top rate of tax to previous levels is the best thing for the British economy then the upcoming budget is the best chance the Conservatives have of deactivating this issue.