If you smoke, drink or drive, you must really hate Budget Day because when the Chancellor stands up today to present whats going up and whats going down to balance the books in the next financial year, its the fags, booze and cars that get hit every time. As someone who does all three, and usually all at the same time, i know i am going to have to dig a little deeper for the next twelve months.
During a recession, the problem for the Government is that after you hit these three soft targets, you haven't got anywhere else to go to raise revenue without resorting to spin, distortion or stealth and this Labour Party would never do that.
What we will get instead is cuts dressed up as cost cutting measures to save the country some cash. Back in 2003 they announced slashing 100,000 jobs in the Civil Service which must have saved them a few quid even if it means that the guy now dealing with your Tax Return has 15 minutes experience and you are either due a rebate of £150 or you owe them £7,987,045 and you have until Friday to pay up.
The obvious answer, obvious to me anyway, is that you can't raise the basic income tax rates because that would leave those on lower wages worse off and Brown must have learnt his lesson when he messed with the 10% band rate a few years ago and it ended up costing him more than if he had left it alone.
I would therefore put forward the idea that he whack the rich with heavy tax increases. Push the present 40% tax band up to 60% for anyone earning over £150,000 annually. Yes they may whine about it but they can afford it, a family living on minimum wage topped up by Tax Credits can't.
If Brown is determined to cut services, he could look to slash jobs in his own Government by getting rid of unnecessary and unwanted Labour politicians.
Want me to fetch yours and Jacqui Smiths coats Gordon?
4 comments:
Notwithstanding the usual arguments over tax increases causing a 'capital flight' from the UK (there is something to be said for this view, and I'm sure you'll hear from others about this shortly!) I can't see the political sense of raising the top rate to 60% by 2011, since the Conservatives will be in power by then and will never back it.
What they will back (as Cameron and Osbourne have already said) is a raising of the top rate to %45. So it makes sense for Alastair Darling to peg it that rate. It's like when Labour were elected in 1997 - they inherited a top rate of %40 from the Tories, and - up till now - never saw the sense of changing it, up or down.
By the way, I haven't a clue why I put the % sign before the figure in that last paragraph... Mental Note: Don't blog while you're doing six other things...
I see he's gone for 50%... Hopefully that's just short term. It might be tempting for the Tories to keep it like that, although they should remember the productive boost that came from Lawson lowering the top rate to 40% in the late 80s...
Overall it's tempting to agree with Nick Clegg's take on it: "Taxes are still too heavy on those who can least afford it and too easy to avoid for those who know how. That's how this Government and the Tories seem to want it."
I am happy to see that he shifted the top rate to 50% and left the rest well enough alone. The beer, cigarettes and fuel was always going to go up but after a quick glance through the rest of it, nothing stands out but he really didn't have much room to manoeuvre either way.
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