Worse Off Wednesday

Today the 40% tax rate kicks in at £35,000 above the personal allowance. The tweaking, down from around £37,000, is expected to raise just £500 million this year. Given we are spending £120m every day on our debt interests, it’s not worth the pain. The £500m could have been found through other savings rather than whacking wallets.

The top-rate of tax hits 52p with Labour’s rise in National Insurance also kicking in today. “An exploded tax-bombshell designed to go off under the future economic recovery” as Osborne put it in 2008. But he’s hardly done much to ease the pain, there’s not even a little retail therapy due to his choking rise in VAT. This is not a growth strategy.

UPDATE: It was pointed out to Guido that the gift of £600m that Cameron pledged to Pakistan yesterday is more than the tax take from this squeeze on middle-earners. But it’s ok he’s sure they are very grateful.




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Quote of the Day

Paul Goodman as sagacious as ever on Arron’s entryism…

“… one must watch for former UKIP donors and a very few left-of-Party-centre MPs propping each other up, like drunks at the end of a pub crawl. It suits the former to claim the power to organise a programme of mass infiltration. It suits the latter to react by complaining about extremist entryism. The rest of us should keep a cool head.”

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