Thursday, March 22, 2007

Brown's "tax cut"

2p off the rate of income tax - sounds good doesn't it? I'll be £300-400 a year better off under Gordon, so I should be singing from the trees, shouldn't I?

Afraid not. I might be better off*, but there are loads of people who will be hit in the pocket by this. Brown has aboloshed the 10p lower rate, so you start paying 20p on all your taxable income. It evens itself out when you reach my level of earnings, but those on low incomes - particularly the elderly with a small private pension or those working on minimum wage - will be hard hit by this.

I can see two reasons for Brown's move: the first is that this tax cut doesn't come into effect until the 2008-9 fiscal year, so the rumours he might run for election next autumn might have legs. Gordon can effectively hold us all to ransom: "you want this tax cut? Then you'd better vote for me". Second, I wonder if he's worked out it's easier to tax the poor than the rich. The poor don't have the luxury of accountants who spend their days finding out new and inventive ways to dodge paying tax on their clients' earnings. Isn't it ironic, how the poor - who need every penny they can get - are taxed to the hilt while the rich - who just sit on it or fritter it away - manage to avoid paying their fair share?

So I might be better off, but Toni isn't and besides, I don't vote for the person who tries to appeal to my selfish nature. It's just a shame so few people share my view...

*Actually, it appears I won't be necessarily, with Brown performing his usual trickery in raising National Insurance thresholds to give with one hand while taking with the other.

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