Budget - for millions or for millionaires?

 
Chancellor on TV screens

Never forget that the chancellor is from a family of gamblers, one of his friends told me.

On Wednesday George Osborne gambled that he could cut the tax rate for the richest because the official figures suggest it raises very little. He's raising other taxes on the wealthy and he's spending much more giving a tax break for those on lower and middle incomes.

Ed Miliband - also something of a spinner of the political roulette wheel, as his brother discovered - is gambling that this decision alone will destroy the coalition's claim that "we are all in this together".

Most people in the days after the Budget focus on how the chancellor's decisions affect them.

Millions of taxpayers will welcome the little more they can earn tax free. But millions of pensioners will see their tax allowance frozen.

Three quarters of a million higher tax rate payers will be breathing a sigh of relief that their child benefit is not, after all, being cut.

BUT millions hoping that their tax credits won't be cut or that fuel duty will be held down will be disappointed.

Nick Robinson's Budget explainer

Smokers, company car drivers, drinkers of sports drinks and eaters of hot chicken on a spit will all lose a little.

Rich buyers of £2m houses or exploiters of tax reliefs will hurt but millionaires who aren't moving house or using those reliefs will get a very big tax cut indeed. Overall the Treasury's numbers only add up on the assumption that the money lost by cutting the top rate is offset by the gain of people moving themselves or their tax back into the UK.

The old political rules state that no-one can win an election promising to increase tax.

Will new rules be written that prove that no-one can win one by giving a tax break to the rich in an era of austerity.

 
Nick Robinson Article written by Nick Robinson Nick Robinson Political editor

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  • rate this
    0

    Comment number 261.

    comment 221- the CEO won't pay higher salaries to his staff because the tax credit system actually subsidises business- he can pay lower wages (so he makes more money) while his employees claim state help, funded by indirect taxation (as per my previous post) of which he pays a much lower percentage of his income - it's a win-win as far as he's concerned.

  • rate this
    0

    Comment number 260.

    'Good for business' = bad for ordinary people. Creating 'a thriving environment for business' by 'competetive taxation and employment laws' means business and rich individuals paying very little while the infrastructure they need is paid for by the masses who are also going to lose whatever little employment protection there still is and who will never get to retire.

  • rate this
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    Comment number 259.

    Income tax does not pay for government expenditure - indirect taxation does, therefore the rich pay very little (even discounting their avoidance schemes) and ordinary people pay the most- both in actual pounds and as percentage of income. It's also why they won't cut fuel duty; (millions having no choice but to use a car to get to work) yet are now talking about privatising roads.

  • rate this
    0

    Comment number 258.

    No problom if it works - might reduce the current situation of town centres being no go areas after 9pm on weekends. Puzzled the |Home Secretary fronted up the public announcement - why this was not announced in the budget (after all its a change in the tax/duty levied), perhaps George is struggling with the lashing he is getting from OAP's and cant take anymore beatings

  • rate this
    +1

    Comment number 257.

    This is a good budget for business, competitiveness and investment in the UK. It paves the way for growth and the creation of jobs. That had to the be the main priority and the Government delivered. Pensioners will not gain as much as they had hoped but once again they will be better off as a result of this budget. Over time millions will benefit greatly from a renewed support for business.

  • rate this
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    Comment number 256.

    The problem that people is the very rich can do just what they want, and are totally free (unlike normal people) to move their income to the place which suites them the most. They are able to move to places where tax is lower, because they can afford it, unlike the rest of us.

  • rate this
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    Comment number 255.

    Our levels of tax are eye watering. When you add NI, VAT and all the other hidden taxes/taxation across the supply chain to anything you buy or do, it is a wonder people don't revolt.

    With tax this high, why work hard.

    The squeezed middle will pay everything. The wealthy will simply "avoid" while the poor will only burgeon creating more dependency on the taxed middle. It's a hiding to nothing.

  • rate this
    0

    Comment number 254.

    251. lefty11 - Actually I do. Not underplaying the difficulties of low wages however that shouldn't = being angry at others who earn more esp as they give more in % and real terms to help others.
    252. AndyC555 - A few probably. I suspect a large number work in the 'City' for large corps and are taxed via PAYE.
    253. DHWilko - Being serious!!! Brilliant love the connection. Nope Clan Scott.

  • rate this
    0

    Comment number 253.

    prestonpans
    Your comments are obviously trolling, very entertaining trolling though. Are you supposed to be David Cameron? as in the Clan Camerons involvement in the battle of Prestonpans? The Salary is a bit out, unless it was higher last year.

    Sagamix
    Just in case. Congratulations. I can't be bothered to open a twitter account.

  • rate this
    0

    Comment number 252.

    "Up2snuff
    a significant proportion of the 300,000+ top rate taxpayers in the UK must be paying via PAYE, how can they cut their hours to avoid paying tax or evade it in other ways?

    That's one for Andy C555 to explain."

    The point would be that many in this pay bracket run/own the company that employs them. Yes they are on PAYE but they are nevertheless effectively working for themselves.

  • rate this
    +1

    Comment number 251.

    250 preston
    You have no idea what it is like to survive on a 16k salary and the plethora of distress this sort of salary entails. Welcome to the reality for many of loan sharks, debt collectors and bailiffs, constant worry, pawn shops, depression, insolvency, bankruptcy, fear, exhaustion, sadness etc etc.......and watching the millionaires on the front bench give themselves a tax cut.

  • rate this
    +1

    Comment number 250.

    247. GuillotinePete - Hello again, I am not complaining that about paying a high % in tax, although I wish it was much lower, I have simply been pointing out that the relatively well off DO pay a 'fair share' which is contrary to what a lot of people believe. Highly paid = greedy?! About as correct as Low pay = lazy/stupid?!

  • rate this
    +1

    Comment number 249.

    I pay a higher percentage of my income in income tax than my cleaner does. What is misleading or factually incorrect about it? I am paying vastly more in % and real terms than someone who earns less. Isn't that what people want.....redistribution of wealth and a reward for failure?

  • rate this
    0

    Comment number 248.

    The point I am making, as borne out by HMRC's own figures, is that the tax system in this country IS progressive. The wealthy do may a huge proportion of all income tax raised and its been increasing year on year. The tax take from the less well has fallen significantly over the same period. Whether the rich deserve their wealth is an entirely different question...........

  • rate this
    -1

    Comment number 247.

    Hi prestonpans.

    I am very happy with my lot - in the words of Billericay Dickie, I am doing very well. I am just fed up to the back teeth of greedy b's like you whingeing about paying 50% tax on income over £150k. Don't you know the meaning of ENOUGH!

  • rate this
    0

    Comment number 246.

    #244 lefty11

    Your point is meaningless or misleading.

    There was a debate earlier based on the IFS paper "Do the poorest really pay more in tax?"

  • rate this
    0

    Comment number 245.

    244. lefty11 - if that is correct then explain the following: I earnt £238k last year and I'm taxed at source by the business that employs me...I paid circa 44% of that amount in income tax. My cleaner is paid £15k a year and is taxed at source by the business that employs her....she paid circa 16% of that amount in tax. Explain the unfairness....what is your point?!!!!!!!!!!!!!!!!

  • rate this
    -2

    Comment number 244.

    241 Espritv8
    Of course the wealthy pay more tax, they earn more. I have never understood why this most obvious of obvious points keeps getting repeated as some sort of new revelation to excuse greed and propagate an unfair tax system.
    What is less known however is how much less the wealthiest pay in tax per every pound earned. A cleaner paying more per pound earned in tax than a millionaire.

  • rate this
    -1

    Comment number 243.

    241 They pay to for services their employees use and to help the government subsidise low pay that includes housing benefit that goes to wealthy landlords on behalf of the tennants who take all the flak. Why is everyone here and on the BBC so obsessed with figures? All Figures are good for is lying to us. Probably impossible for the bottom 50% to pay the same as the top 27% as they earn so much.

  • rate this
    +2

    Comment number 242.

    241. Espritv8 - Excellent post and info. Not sure how people on this board can argue that the current income tax system is not highly progressive and 'fair' as they love to shout. The UK has the highest top rate of tax in the G20......it should be cut significantly from 45% to encourage aspiration and and reward success.

 

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