More austerity: Grim Osborne ready to target richest and poorest

by liamssoft | December 8, 2012 at 07:23 am

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By the time voters next go to the polls in 2015, the number of higher-rate taxpayers in the United Kingdom will have doubled in 20 years, following chancellor of the exchequer George Osborne’s budget changes on Wednesday.

An extra million people will have been dragged into the 40p rate by 2015 because of Mr Osborne’s decision to increase income tax thresholds by just 1 percentage point, the respected Institute of Fiscal Studies declared – bringing the total to five million.

Next year, people earning more than £41,450 will start to pay 40 per cent on the excess.

In 2014, more than 200,000 more will be dragged into the top rate when the threshold rises to £41,865, far below what is needed to cope with inflation, while a further 180,000 will follow in 2015 when it goes to £42,285.

“The higher rate is no longer something faced only by the highly-paid few,” said institute director Paul Johnson, who said Mr Osborne had cut incomes for the richest and poorest, while giving a little to pensioners and low-paid workers.

It warned that billions in extra cuts will follow the 2015 election, because the chancellor will not be able to meet his spending targets: some government departments will be faced with 2015/16 budgets which will be a third smaller than in 2010.....Read more

irishtimes.com