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, Political editor Article written by Nick Robinson Nick Robinson Political editor

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  • rate this
    -3

    Comment number 1.

    Lets actually look at the facts - The richest 10% stump up the majority (53%) of tax collected in Britain. And the richest 1% stump up a staggering 22% of the tax collected.

    Instead of demonizing the rich maybe we should thank them for their extremely large contribution to the welfare state?!

    Personal responsibility not politics of envy please!

  • rate this
    +26

    Comment number 2.

    Definitely welcome the rise in what we can earn tax free

  • rate this
    +1

    Comment number 3.

    You didn't need a chrystal ball to know that the banner headline after this budget was going to be top rate tax cut.Everything else gets ignored.Says more about the media and its political agenda rather than focusing on the picture as a whole.

  • rate this
    -17

    Comment number 4.

    as one of the people who will be pushed into the higher rate tax bracket I will certainly be speaking to our company's financial advisor to work out how I can better arrange my finances to reduce my tax liabilities. Should have done this years ago but this budget has provided the push I needed to finally go ahead and do it.

  • rate this
    +5

    Comment number 5.

    AGree with prestonpans, quite why it is deemed fair to pay an ever increasing proportion of your money to the state is beyong me. Sureley the fiar way is everyone paying the same %, the "richer" you are the more you pay at the moment(unless you have some very good accountants) that's where they should focus. A nice simple tax system would make this possible and increase revenues.

  • rate this
    0

    Comment number 6.

    Excuse me , but no one got rich by themselves.

  • rate this
    +4

    Comment number 7.

    1#
    'Personal responsibility not politics of envy'

    You mean of course one-for-one and non-for-all... sad way for human beings to organise themselves. Still, don't suppose you really care.

    The diff between 45% and 50% would only raise an extra £5billion or so over 5 years anyway, so it's chicken feed isn't it.

  • rate this
    +20

    Comment number 8.

    " why it is deemed fair to pay an ever increasing proportion of your money"

    Because as you have more money it is less valuable to you. If you are broke then £100 is worth a lot - if you have a million it is trivial - but it buys the same goods and services.

  • rate this
    +18

    Comment number 9.

    Prestonpans falls into the trap of only looking at income tax. Taking all taxes the poorer you are the Higher the proportion of your disposable income goes in tax because taxes on spending such as VAT, fuel duty, etc are so regressive. If your sticking huge proportions of your income into a pension pot your not paying VAT on it and your getting 20% tax relief of the first £50,000.

  • rate this
    +28

    Comment number 10.

    Why on earth would anybody who could afford to pay 2 million for a house pay 7% stamp duty. Why not move to Guernsey/

    "my place is worth 2.5 million but you can have it for 1.9 million, provided you by that rusty old fiesta in the field over there for 0.6 million" Nothing will be raised by this Stamp duty and Ozzie knows it. It is simply a sop to the Libs

  • rate this
    +16

    Comment number 11.

    Pretty much as expected, The rich get richer at the expence of the welfare state.
    I was made redundant 3 weeks ago due to the cuts, so nothing in it for me after 35 years of constant work

  • rate this
    +36

    Comment number 12.

    The rich will always dodge tax unless you make it illegal. As with Capone, go for the book maker - make all tax evasion and avoidance schemmes illegal and strike off accountants, lawyers or solicitors found guilty of creating them whilst simultaneously making them liable to pay for the tax loss. Paying tax should be a true public duty, then it will be possible to cut everyones tax.

  • rate this
    +7

    Comment number 13.

    Lower rate boundary moved up, Higher rate boundary moved down.
    Sounds like a squeezed middle to me.

    Nothing here for anyone who earns just over 50k, has children and can't afford to buy in London. At the very least, the child benefit should be based on net salary after income tax, not gross!

  • rate this
    +2

    Comment number 14.

    4.jl45
    Why will this budget push you into a higher tax band? I don't think the personal allowance rise is being paid for by a reduction in the point at which you enter the higher band is it?
    Its not worth the cost of trying to avoid it really just use some sensible money management. Make additional pension payments (its taken pre-tax) and use your ISA allowance.

  • rate this
    +19

    Comment number 15.

    The rich have the means and the money to make use of accountants and solicitors to exploit loopholes, meaning they don't contribute as much to society. The rich aren't being demonised, they're just being asked to contribute as much as their lower paid counterparts. I'm not low paid but I'm compassionate enough to understand that we 'should' be in this together and 'should' contribute fairly.

  • rate this
    +2

    Comment number 16.

    #14 I dont currently have a pension but do make full use of my isa allowance. If taking out a pension takes money away from greedy osbourne then i will do it.

  • rate this
    +3

    Comment number 17.

    16.jl45

    Hmmm tax avoidance me thinks

    PAY YOUR SHARE

  • rate this
    -8

    Comment number 18.

    12. Ibwa
    Absolute rubbish, paying tax is a requirement by law to fund public services. As such there is no moral responsibility to pay more than is legally required.
    In this case there is a clear difference in my mind between morality and legality and tax comes firmly in the second.
    If you want to comply with your "public duty" I'm sure plenty of charities would take your money.

  • rate this
    -1

    Comment number 19.

    It does effectively yes, you get a full relief on the money up to a certain point so if you are a 40% tax payer and choose to pay in £100 then whole £100 goes in whilst the earnings in your pocket sacrificed would be £58 (INC NI). Don't pay someone a little research can save yourself a reasonable amount of cash, with an ISA make sure you use the full allowance as well not just the cash amount.

  • rate this
    -8

    Comment number 20.

    #15 if you read the facts attached to my comment you will see that the rich are making an overwhelming contribution to the tax take?! I think the top 10& paying over 50% of taxes seems to say that the rich are in this together and are contributing fairly?!

 

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