Taxing Peter to pay Paul
So the government managed to “resolve” the 10p tax issue before the bye-election in Crewe.
Only thing is it doesn’t really resolve the issue:
- As far as I can tell, all people paying only the basic rate of income tax (i.e., not 40p) are getting money back. That means that many people who made money out of the budget are now getting extra money. Nice for those people, but it doesn’t really look like a correction of the original problem, does it?
- Some people are not getting full compensation. It seems very low earners (making around £12k a year, I believe) are only getting back half of the money they lost when the 10p rate way abolished.
- Where will the money come from? The government will be borrowing another £2700000000 (that’s £45 per person in the UK, including babies like Anna) at a time when borrowing is already far too high and we’re facing recession.
- Also, is this fix temporary or permanent? If the former, the former 10p rate payers will lose out again next year. If the latter, they’ll have to borrow £2.7 billion every year.