Maybe the 50p rate of income tax paid by the highest earners on incomes over £150,000 is bringing in a few hundred million a year. Maybe it isn't. Either way it won't be raking in billions.
What the debate about the 50p rate is all about generating headlines without really changing much. The government fiddles about with a few hundred million to grab headlines all the time. The government will spend £680bn this year. Throwing a fraction of one per cent of its tax raising and spending power changes nothing fundamental about the impact government has. The Coalition's commitment to raising the personal allowance to £10,000 (as promised by the Lib Dems) is a much bigger shift that will cost the Treasury £17bn once it has been realised (and benefits lower earners the most). Now that's what I call income tax reform.
There is nothing wrong with rewarding success - cutting the 50p rate to 40p would do this a very little bit. There is also nothing wrong with wanting to see the richest pay more of their fair share - keeping the 50p rate would do this a very little bit.
But given the trivial size of the change, it's frustrating is seeing progressives get drawn into this debate.
Yes, income tax is progressive and is directly linked to the ability to pay. Yes, the marginal rates look stupid when plotted on a graph and a few tweaks would make it technically fairer:
However, any changes to income tax of this nature would only affect a tiny amount of the money earned by the richest 5% shown in this graph:
Getting into a heated debate about the top end of income tax is like arguing over the position of a few grains of sand in a sandcastle, when what the argument should be about is what overall shape the sandcastle should actually be.
As an example, take property. The richest 5% of property owners have a hugely disproportional amount of wealth compared to the rest of us.
Fiddling with income tax will do nothing to redress this inequality. If anything it will distract attention from the fact that such a huge wealth disparity exists.
It is measures like Vince Cable's mansion tax that would really get the ball rolling on redistributive taxation.
(Hat-tips: Adam Corlett for the marginal income tax rate graph and ALTER for the income and property distribution charts from this PDF.)