Thursday, March 22, 2007

Gordon Brown Cancels Tax Cut for Poor

A reader has emailed to point out something very interesting. He says that none of the press have noticed something very devious in this budget.
Brown has made much of the increase of £150 in child tax credit and £1200
in the maximum income before the working tax credit starts to
get withdrawn. But have a look on Annex A Page 8 of 32 bottom of page paragraph A14 (page 212 of whole document)

"A.14 From 6th April 2008, the rate at which tax credits are withdrawn will increase from 37 per cent to 39 per cent."

In otherwords, if you are on tax credits the cut in income tax from 22 to 20% is
cancelled by the increase in tax credit withdrawal from 37 to 39%, plus you get
the increase from 10-20% with the starting rate abolition.

The increase in child tax credit by £150 if you have children helps and the rasing
of start of withdrawal from £5220 to £6420 also offsets the rises to the extent
that the very low paid are a little better off, but this is no giveaway
for the low paid. They are still taxed at 70% for every extra pound they earn
(20% income tax, 11% national insurance, 39% tax credit withdrawal).

A real incentive to work, eh?


Anonymous said...

One other thing the papers havent't picked up on....the commentariat seem to think that the likelihood of an early (2008) election when the 2p cut comes into force has increased. In order to do this a Brown government would have to force through parliament public funding for political parties and possibly spending caps as NuLab is broke and no way could afford an election in 2008 on current rules

Old BE said...

Two things:

Brown has claimed that this budget is a "simplifying" budget which is laughable given the complexity of the interaction between tax credits, income tax and NI.

The "cut" doesn't come in until a new chancellor is installed. The new chancellor may well want to do his own budget next year... Or is Brown effectively going to be PM and Chancellor?

Anonymous said...

Took you a while to find something wrong eh Dale.

God you're a fat tory twat.

Anonymous said...

It's bloody disgraceful that Brown set up that pantomime farce of a budget yesterday as a political tool to help him win the leadership of the Labour Party and to claw back some support lost to Cameron in the polls.

Is this what budgets are for these days, to help one megalomaniac achieve his political ambitions?

This sort of thing reduces Britain to the level of a banana republic though thankfully, much of the media and the public are now cottoning on to Brown's con trick.

Brown will end up paying a high price for this attempt to con MP's and the electorate.

Anonymous said...

My staff and customers are not impressed!

Newmania said...

The only reason for the manoeuvring on National Insurance (why is it not just called tax ?) credits, ceilings , time lags and so on ,is to quite deliberately confuse and befuddle the tax payer . Its incredible the extent to which we accept that the Chancellor will mislead us whenever he can . There is even a sort of admiring in-game assessing how well he has done it.

Yet again we have seen the tax burden shift from that which we can see, to that which is hidden from us , and we already live in a country where invisible tax is about the same size as Income tax .This is an ongoing grievous attack on our democracy . David Cameron said a long time ago that his primary aim with taxation was to simplify . Certainly there is no point in promising this and that now which can only be rearranging the furniture The reform has to be in stages. Simplify and then cut . In fact the one will inevitably follow the other and that is the only way to make serious inroads to the state ..


Flat tax has been adopted in Estonia, Lithuania, Latvia, Russia, Serbia, Ukraine, Slovakia, Georgia, Romania, and Macedonia. Proponents believe the simplicity and efficiency of the flat tax is a key reason behind Eastern Europe's dramatic growth.. It may not in its pure form be possible to entirely reach the position here, but the closer we are able to get to it the better it would be both for the economy and for the health of the nation. At the moment we have to watch the puffs of smoke and wait for the experts, why ?. It is our money and nothing is more important to me than the eradication of this small print. It would land a financial adviser in Court in ten seconds.

Don`t Put up With It !

So the question you should be asking when someone is unpicking the endless threads of the intricate Brownite tapestry is not .“ What is Happening?”,It is

“ Why the hell are you hiding things from me ?”

Are you lot having such fun being cleverere than the voters you have missed the point.

I think so

Old BE said...

God you're a fat tory t**t.

An intelligent point, beautifully explained.

Anonymous said...

I think that Beau Bo D'Or sums up this budget perfectly.

Anonymous said...

The press might not have noticed it, but real bloggers saw it pretty quickly:

Newmania said...

God you're a fat tory twat.

Iain is not a twat and he is not fat either . He is just little undertall for his weight , or to put it another way " Differently slim".

Any way they say the camera adds about a stone but Doughty Steet they must use a fish eye lens that adds about four stone . I mean , how would you look reflected in a spoon ?

He is pleasantly podgy

( see how I cunningly ingratiate myself ...)

Anonymous said...

"Took you a while to find something wrong eh Dale."

So that delegitimises his argument?

"God you're a fat tory twat."

Why? Because he dared to point out something negative about the budget?

By the way, Tories who believe in leaving people alone and being left alone are morally superior to those of you who want the state to enforce parasitical behaviour.

Anonymous said...

"Took you a while to find something wrong eh Dale.

God you're a fat tory twat. "

You're obviously very upset he found something wrong. Wonder why?

You fat Labour twat.

Anonymous said...

I don't understand this tax credit melarky. What's all this 39% withdrawal rate/marginal rate of 70% business?

Very confusing.

Also, I'm a Russell Group uni graduate. So if I don't understand it, how is an illiterate manual labourer supposed to?

Richard Havers said...

The vote on the BBC web site about Gordon's con is getting better, or worse, depending where you are coming from. Earlier today those that thought it was a bad budget for them was a tad under 60%

Was the Budget good for you?
33830 Votes Cast

tory boys never grow up said...


if you ignore all the hyperpole I think you'll find that aligning the tax brackets for NI with those Income Tax that Gordon Brown has mved towards simplifying the tax structure in the manner you appear to be arguing for. Taxes on income will be at 0%, 31% and 41% rates - compared with the previous 0%, 21%, 33%, 22%, 41% structure. Given that anything else other than a tax neutral budget would have been bonkers in the current economic environment what has been done is quite clever (possibly too clever?). The only way there could have been tax cuts would have been through cutting back expenditure plans - Dave the marketing man was rather too easily fooled into thinking that there were tax cuts - didn't he listen to, or understand the bits about the economy at the start of the speech?

Anonymous said...

My tax rate for 2008/2009 has just doubled from 10% to 20%.

Now who once told me that New Labour always looked after the working class?

And who was it who promised in 1997 not to increase tax at all?

Yet more broken promises from the New Labour school of bullshit!

Anonymous said...

The tax credit system -as it stands - stops people from bettering themselves and climbing up social & economic ladder. If one earns x% over a stated amount, then penalties and withdrawal click in.
The blanket 400 quid on on/off road vehicles guarantees rural wrath. Milli'brand'@ defra 'loves' rural Britain!
My most important point is now we have Mr Brown et al controlling the future: Many Xs will not happen until Y. Surely this is indicative of control freakism.

Elliott said...

Has anyone noticed that defence spending has been frozen? Even including the "additional £400m" mentioned in the Budget speech? The total "departmental spending limit" for defence remains at £40.8bn for fiscal 2007/08 (including the £400m reserve), which is the estimated outturn for 2006/07. (Detailed arithmetic plus link to Treasury numbers here.)

Allowing for inflation of 2%, this means a cut in real terms of £816m. Not what was announced. And not the kind of thing we should be expecting from the man who aspires to lead the troops he's penalising.

Anonymous said...

"Gordon Brown has mved towards simplifying the tax structure in the manner you appear to be arguing for"

Hahaha. Haha. Hahahaha. Ha!

Gordon Brown simplifying the tax structure?!

Whatever next, the Pope converts to Islam?

Gordon has not simplified anything. He's spread his taxes around like horseshit around a cabbage field.

He takes money from the poor and then they have to apply to get it back from him through tax credits. A man who has introduced over 100 new taxes since 1997 and quadrupled the size of the tax law handbook.

Gordon is about as transparent as the Stazi.

Anonymous said...

Who on earth is going to want to be the useful idiot, sorry, Chancellor, obsequiously implementing Brown's loony pocket-picking doubling of the 10% rate in 2008-09? Even by NuLab standards, that'll need Serious Creep material.

Anonymous said...

It's not just our pockets that Brown picks.

Be warned this is disgusting and not for the squeamish.

Anonymous said...

"God you're a fat tory t**t"

Anon at 11.58 - why not try reasoned argument? You'll find it has rather more in its favour than stupid childish abuse.

Of course, that presupposes you have a reasoned argument........ or does childish abuse pass for debate at 11 Downing Street these days? Gordon will no doubt throw you a biscuit for your hard work today.

Anonymous said...

If you work less than 30 hours a week - a lot of the very poorest do and not necessarily through choice either - then you can't claim Working Tax Credit. Up to 40% of those eligible for the WTC - a million people - don't claim it, probably because they are too proud to claim benefits.

Brown has doubled the tax bill for these people.

Newmania said...

Gordon Brown has moved towards simplifying the tax structure in the manner you appear to be arguing for.

Ha ha ha ha ha oooo ha ha ha ... can`t be bothered I have already spent to long explaining the operation of the FSA to you.The current economic enviroment indeed...yeeesh

( No I did not listen to the whole speech I was at work )

Anonymous said...

A real incentive to work, eh?

It's an incentive to remain dependent on state handouts, and thus be more likely to vote for a tax-and-spend party that promises to keep the welfare money flowing.

Anonymous said...

the rasing

remember "i"

Ralph said...

Another first for Gordon, 'cut' taxes, then go two points further behind in the polls.

The latest YouGov poll (conducted after the budget) has the Tories on 39% (+1), Labour on 31% (minus 1), and the Lib Dems on a steady 16%.

Anonymous said...

A Budget brainteaser (from 23/03/07 Indie)

"Gordon Brown's promise that four in five households would be better off because of his budget was impossible to prove, leading accountants said yesterday. The missing information includes:

* The level of income at which basic-rate tax will become payable from 2008-10

* The level of salary above which NI is payable for that time

* Increases in personal allowances for people under the age of 65 from 2008-10

* When higher-rate tax becomes payable in 2008-09

* Details on who is able to claim working tax credits or child tax credits and how much

* Levels of inflation Treasury has assumed for its figures

* No commitment to provide this information in next week's Finance Bill, which will only cover tax changes in 2007-08"

So it is a CON trick by Macavity.