Budget 2012: Will it help the rich or the poor?
- 21 March 2012
- From the section UK Politics
It will be a "Robin Hood" budget giving money to the poor, Nick Clegg tells us.
No, reply Labour, it's a handout to the rich of the sort the Sheriff of Nottingham might have approved.
The chancellor will, I suspect, say that it will help hard working families.
So, which will it be? Well, a lot depends on what you mean by rich or poor.
By poor, do you mean out of work? They won't benefit from a tax cut because they don't pay any tax.
Or do you mean the working poor? They will gain from an increased tax allowance but may well be losing a lot more from working tax credit cuts.
Or do you mean those feeling squeezed which includes many who are, in fact, statistically what we might just - please don't shout - call rich.
Take the top 15% of taxpayers. They're clearly richer than most and they pay higher rate - 40% - tax. However, few earning around £45,000 think of themselves as rich.
We can all agree that someone able to pay over £2 million for a house is rich but what about the owner of a business who might in good years get paid £150k (putting him or her in the top 1% of earners paying 50% tax) but in bad years might take home very little?
The chancellor will insist that it's what you tax - wealth not earnings - that matters as much as who you tax. He will claim to be giving more to those on lower earnings and taking more from the highest.
The shadow chancellor Ed Balls will point out that a pound spent on a tax cut is a pound that could have been spent on avoiding a cut to tax credits.
Economists will pore through the tables, the graphs and the charts to tell you which decile (that, to you and me, is a one tenth slice of the population) will get more or less than another.
Ordinary folk wait for the Budget small print to emerge and do their own sums before reaching their Budget judgement.