Shadow Chancellor Ed Balls announced in a recent speech the Labour party's intention to return the top rate of income tax to 50%, should they win the next election.
Last year the Coalition Government reduced the tax rate for those earning over £150,000 to 45%, which was welcomed by businesses.
Today in an open letter to The Telegraph, heads of 24 companies heavily criticised the Shadow Chancellor's plan, warning that increasing the tax rate would halt the economic recovery and cost jobs. The letter said, 'We think that these higher taxes will have the effect of discouraging business investment'.
Katja Hall, Chief Policy Director for the Confederation of British Industry (CBI), agreed: 'We don't believe that introducing a 50p income tax rate is the right way to raise money because this puts talented people off coming to the UK to invest and create jobs'.