bookmark_borderTax rise for incomes under £19k

Gordon Brown’s reduction of the basic rate of income tax from 22% to 20% is going to be paid for by people on low incomes because it’s paid for by raising the reduced rate from 10% to 20% (that is, the 10% and 22% rates are conflated).

I know it won’t apply for another year, but if it kicked in now, according to my calculations, it would hit incomes under £18,605. For people on £13k a year, the increase in tax will be more than £100. On the other hand, people with salaries above £34k will get tax cuts worth more than £300 a year.

I know the budget will hand out more money to some people on low incomes, but at the end of the day, this is giving money from the poor to the rich.