Dismantling the Budget 3: Tax
by Part three of deconstructing the budget, looking at Alastair Darling’s plan for the British economy. In this section I will be looking at tax.
• Income tax for those earning more than £150,000 to rise to 50% from April 2010
This is a real bone of contention in parliament at the moment. I don’t know why, it’s not like it’s going to make any difference. People who earn that much money are usually very good at dodging taxes (legally of course), and even if that wasn’t true, this 50% represents an income £75,000 per person per year… but how many people really fall into this bracket? A few thousand? In the grand scheme of things, this is really a very small amount of money compared to what the country will be borrowing. Still, it can be forgiven if it is part of a network of small income increases designed ot contribute to a much larger plan.
• Tax relief on pensions to be reduced for people on more than £150,000 a year from April 2011
People with this much money don’t need pensions. They can quite happily contribute to a scheme and/or save. This increased money to the government and possibility of increased saving may help put more money into the national kitty, but in order for an economy to actually be viable, money has to move and be traded as well as be saved. In short, this will generate more tax for the government, but it may also put some people off taking out a pension. If it does, then they will probably save money, which will then go to the banks. Either way, it can help, but perhaps encouraging money to move would help more.
Part 1: Alcohol, Cigarettes and Fuel
Liked it
