Britain’s wealthy enjoy the lion’s share of the Kwarteng. announced tax cuts of £45 billion

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Liz Truss and her Chancellor Kwasi Kwarteng accused them of producing an economic plan to help the “already rich” after announcing a series of tax cuts that would benefit the rich the most.

Treasury estimates put the cost of the tax cuts announced by the Chancellor – including the abolition of the top income tax rate for the highest earners – at nearly £45 billion a year by 2026.

High earners who earn more than £150,000 a year no longer pay the highest income tax rate of 45 percent, but instead pay the 40 percent rate paid by those earning more than £50,000.

It means those earning more than £150,000 will enjoy an average tax cut of £10,000 a year, according to Treasury officials. The government is losing more than £2 billion a year on plans to cut taxes on the 629,000 people in the highest tax bracket.

Labor shadow chancellor Rachel Reeves said the government had “decided to replace leveling with trickle down” – she accused Ms Truss of endorsing “an ideology that says if we just reward those who are already rich, all of society will benefit.” “.

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The Joseph Rowntree Foundation said the mini-budget proved that Ms Truss and Mr Kwarteng “had no understanding of the economic realities facing millions” – saying the government had “clearly chosen to turn its back on the lowest-income millions.” turn”.

Chief economist Rebecca McDonald said: “This is a budget that deliberately ignores families struggling through a cost of living emergency and has instead focused its action on the wealthy.”

Mr Kwarteng said the changes above the top tax rate will “simplify the tax system and make Britain more competitive”, arguing that his economic outlook will “turn the vicious circle of stagnation into a virtuous cycle of growth”.

But the government unveiled a massive £78bn increase in additional loans for the remainder of the fiscal year, mainly to pay for the loss of revenue.

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The Chancellor also revealed that the Treasury estimates the energy bill bailout will cost around £60 billion over two years in the first six months of October, with the household plan costing £31 billion and the emergency response portion of the package costing around £29 billion.

The main tax cut package included cuts in national insurance and corporate taxes, VAT-free shopping for foreign visitors and reductions in stamp duties.

The Chancellor has accelerated a planned 1p cut in the base income tax rate – from 20p to 19p – that will now take effect in April, rather than 2024.

The recent 1.25 percent increase in national insurance will be reversed in November. The planned April corporate tax hike from 19 percent to 25 percent is being cancelled, cutting government tax payments by £19bn a year by 2026.

The immediate reduction in stamp duty means that the exemption level was immediately doubled from £125,000 to £250,000, while the exemption for new buyers increased from £300,000 to £425,000.

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Paul Johnson, the director of the economic think tank Institute for Fiscal Studies (IFS), said Mr. Kwarteng’s “big gamble” was the “biggest tax cut since 1972.”

“I am sure this will lead to the Bank of England raising interest rates more than they would otherwise,” he told TAUT News. “This is a big gamble.”

He added: “In a way, I’m more concerned that the government is putting tens of billions into the economy right now at a time when inflation is very high, where growth may be slowing down, but prices are rising very high.”

The cap that limits bankers’ bonuses to 200 percent of annual salary has been removed by the chancellor. “We need global banks to create jobs here, invest here and pay taxes here in London, not in Paris, not in Frankfurt, not in New York,” the chancellor said.

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