An extra half million people will be liable to income tax as a result of Mr Brown's budget last month (according to Revenue and Customs estimates reported in the Daily Mail). That is because, as usual, Mr Brown did not increase the tax-free personal allowance with earnings.
During his time in office, the numbers liable to income tax will have jumped by 4.7 million. In the final year of the Tories, 25.7 million were liable to income tax. Next year, 30.5 million are expected to be liable according to the government.
Mr Brown talks about the poor and talks up his tax credits. It is true that many of the people who are liable to income tax will claim tax credits, but not all - either because they are not entitled to them or they fail to claim them. It is simple fact that Mr Brown has made millions more poor people liable to income tax.
Posted by James Bartholomew • Indexed in Tax and growth
Comments (2)
TrackBack (15)
Comments
I don't think it is counter-intuitive - you just need the right mind set. ;-)
I believe such thinking is why many countries are moving to a flat tax system. The 'progressive modernisers' and special interest groups will squeal but the principle that people are always more careful with something they've had to pay for (including their tax) is sound. It will also help to discourage the corrosive attitude that the better off are just walking wallets that may be plundered at the whim of the 'majority' (and probably deserved it anyway), something that is in itself a good thing.
Posted by: Gekko at May 9, 2005 06:33 AM
Warning: file(http://63.247.138.2/~bartholo/randomquotes.dump) [function.file]: failed to open stream: No route to host in /home/bartholo/public_html/archives/2005/04/mr_brown_taxes.php on line 284
Warning: implode() [function.implode]: Invalid arguments passed in /home/bartholo/public_html/archives/2005/04/mr_brown_taxes.php on line 284
Here is a counter-intuitive thought. It is an inherently good thing that more people pay tax, the problem is the amount they pay, not whether thay pay at all. Increasing the number of taxpayers means that more people have a direct financial stake in the government's spending decisions. We ought to be concerned if large numbers of people are freed from tax, because they can vote for policies that need higher taxes with impunity. In fact, Gordon Brown is storing up more trouble for later, when the inevitable tax rises come. Whoever it was who linked taxation and representation got it the wrong way around - How about no representation without taxation !
Posted by: Ricky at April 24, 2005 07:15 PM