Budget rumours

[longfingernails]

This seems to be the most informed article yet

blogs.notw.co.uk/politics/2010/06/george-osborne-is-sharpening-his-axe-for-a-30---billion-assault-on -public-sector-wages-pensions-and-benefits-this-weekthe.html

It doesn't seem as drastic as I was expecting, if it is true.

Thanks,
Yes they will ALSO be paying VAT. But it wont effect them as much as someone on £25k or someone on benefits paying the extra. It will effect them more as they have less money.
The person on £25k will be paying out the same as the same as the person on £200k and fuel etc and this will also be the same. Just as someone on benefit will pay the same for fuel as a top earner.

Higher rate of tax-yes but that is not changing-they will not have anything taken away like say a family on £40k, £35k, £30k or a family on benefits.

yes, everyone may loose thier job;private or public-that also cuts across the board.

So my question about high earners remains unanswered doesn't it?

Heard the expression 'stealth taxes'? Under Labour, middle income/higher earners have had quite a lot steadily taken away. Something like 50% more people are now in the upper tax brackets than was the case in 1998. Tax deductible items are no longer tax deductible. Death duties apply to 4 in 10 estates. The 50% tax bracket for earnings over 150k was introduced not so long ago. Until they messed it up and got rid of the 10% tax, those on lower incomes would not have noticed any of these changes because they simply didn't apply.

Having said that, I'm sure the wealthy end of society will continue to see their tax bills rise in the next budget.

Lego, but the higher earners have only just been affected by the last labour budget. Personal allowance have been affected and those over £150 have just had a 10% tax rise.

You can't tax the same people over and over again. Mostly because it just doesn't bring in enough money to the treasury, (there are just few of them), and also because eventually they will just leave, and that will create an even larger hole in the treasury.

Besides, we all live in this country don't we? Why should only a few pay.

"Having said that, I'm sure the wealthy end of society will continue to see their tax bills rise in the next budget."

We already have. The changes for people earning over £100-150k are already biting, plus the forthcoming changes to tax relief on pension contributions. That is quite a lot. Although some of our income is a discretionary bonus, HMRC are already calculating our tax codes as though the bonus we had last year will be repeated this year, and effectively taxing us in advance. The difference to our monthly income will be around £500 more in tax.

We can afford it, but it means that our discretionary spending and saving will fall dramatically. I don't even feel unhappy about it - we are in a in a very fortunate position (although, through our own hard work) and the country is in a dire mess financially. It's all going to get much worse before it gets better. We all have a duty to do what we can.

However, I can quite see how other people in our position are going to start to feel very resentful if we are willing to help shoulder this burden of debt that the country faces, but people either taking out of the benefit system or employed by the state are not prepared to make similar sacrifices.

. They need to sell that off.

yes, I read that too Riven. That is £18k in what, 7 weeks?

Apparently buying this grotesque amount of young wine saves money for the taxpayer. Anyway, just as shocking is that all the wines total value is £864,000!

These are indeed hard times for us all

Lego - VAT, pay freeze, possible pension cuts/increased contributions, greater income tax and NI, (the former because the thresholds haven't risen for the last few years, so pay more at 40% than at 20%).

what about proportionally though?

I mean with VAT, high earners can afford the extra and it takes less of their income, so a rise in VAT is ok.

With the lower incomes, it takes more of their income. So that is an unfair tax isn't it-it is regressive? Yes they pay more at 40% and then above £150 at 50%, but they earn a lot more; they can afford to?

I do not think people employed by the state are not willing to help and help share the problem [who also work very hard]. I think it is unfair to take away from people on benefits and expect them to take some of the financial responsibilty when they simply do not have the 'extra' to give up.

Maybe I am thinking that another tax [or few] bracket go in somewhere between the current £50k and £150k bracket as that is a vast gulf to be taxed the same. Don't some other European countries do this? Also what about a super duper tax for riddiculous footballers wages and such to have an even bigger tax!
It just seems to me, the whole tax thing needs looking at.

Income tax thresholds are going to rise by £1000 - that is £200 extra for most people, and 850k people are taken out of income tax altogether.

Raising the lower income tax threhold to £10k This was the best Lib Dem policy by a long way. I am so glad it is being slowly implemented!

A VAT increase will reduce the amount everyone spends whatever their budget. I live in Belgium where VAT is currently 21%, so I come back to the UK to buy clothes, or do it online from UK companies; the same for books and CDs and games etc and especially for ds's footwear!

There is also VAT on food here at 6%, so I shop far more frugally here for food than I ever do in the UK. Your money goes twice as far in UK as it does here.

VAT is avoidable to a certain extent depending on what one buys.

You could argue from the other perspective that those who pay tax at 40%, and that is a great deal more than did when Labour came in in 97, due to GB not raising thresholds and allowances, are already contributing a lot proportionally. There comes a point as many on here have pointed out in the past, that it is not sustainable to keep hammering the same people each time for money because they will leave, or retire early, as it won't be worth working and then the burden will fall on those who can afford it least.

You also say it is unfair to take away from those on benefits - I find it astounding that it is possible to have a joint income of up to £66,000 and get tax credits! When ds was a baby, we were earning less than that, paying a mortgage, and shelling out for f/t nursery fees when I went back to work, and tax credits hadn't even been thought of. Interest rates were much higher as well. It is possible to cope without tax credits and I think that Labour should shoulder a lot of the blame for the fact that people can't.

Perhaps people need to defione what taking away from those on benefits means? TBH I would be rather upset to see my CA cut (and surprised)* but wouldn't class some on a good wage getting tc help as falling into 'on benefits'- after all Katie Price qualifies for CB, would she be v'on benefits'?

*I am not saying they will, bery much doubt in facxt. And would accept a frreeze, but the VAT rise I do expect will eat any space I have to be taken away from IYSWIM?

I am possibly expecting CB to be amde taxable in the way my CA already is, CA is sort of non means tested (they test how much you bring in as claimant, and you have to prove you earn it, but don't take household income into the equation) so a similarish benefit.

I would be happy with that. And a VAT rise,

I;d also like to see fuel payments to people living abroad (often on high incomes) stopped, being a pensioner does not automatically = being poor. And whilst I'd be angered at a charge for seeing a GP (penalises the most sick and is a incentive to those on lower incomes (and even if we discount benefits claimants, there are always those on the borderline) from attending a GP and quite possibly getting an early dx for a syndrome that is treatable early on, or more cheaply treatable- easy to dismiss a lump / slightly odd mole / headache that won't shift if the washing machine needs replacing after all....) I would accept a fee for those who don't bother to cancel appts and simply fail to attend. perhaps with el;der;y people and those with theirn own LD excluded.