Friday, March 23, 2012

remember, we’re all in this together (episode 28)…

When it comes to passing comment on this week’s Budget, you might expect an old duffer like me to pour scorn on George’s so-called “Granny Tax”… but I won’t (even if I’m not at ALL impressed).
For some time now, I’ve been very critical of the super-rich and the tax-avoiders (eg.
Feb 2012, Feb 2011, Nov 2010 and Mar 2009 for starters). So, I was particularly interested in what Channel 4 News’ Economics Correspondent, Faisal Islam, has had to say (note: as some of you may be aware, Channel 4 is my television news channel of choice!):
“Apart from the leap in the personal tax allowance, what was the largest annual tax cut (in Wednesday’s Budget)? Expected tax avoidance this year. In fact you may have missed the mini fiscal stimulus at the heart of this Budget. There will be a £3bn fiscal loosening over the next year, followed by a £3bn tightening in the following years. What may be surprising is that this is almost entirely caused by £2.4bn of tax avoidance from Britain’s rich this year, that is then unwound in later years. Yes, this is the OBR’s expectation in this financial year that the rich will not pay out £6.5bn of dividends and bonuses in this tax year, but shift it into April 2013 when it attracts the 45p tax rate. Perfectly legal”.
Very depressing.
This year’s Budget was probably the most-leaked budget of all time. The Chancellor of the Exchequer had made great play of his intentions to make this Budget an “Anti-Tax Avoidance Budget”. On last night’s Channel 4 News, Islam pointed out that the Institute for Fiscal Studies (IFS) had looked back on the last 10 years of UK Budgets in terms of the expected revenue to be gained from tax avoidance. Its conclusion? That this Budget was the third worst!!
Very, very depressing.
And yes, remember, we’re still all in this together!

PS: Oh, and wasn’t this government going to be the ‘greenest government ever’ (in reality, not all that difficult)? Well, putting money into airport expansions certainly doesn’t hit the green button… and the extra investment into North Sea oil and gas extraction essentially smacks of short-term thinking… and there was absolutely nothing in terms of renewable energy investment. What a surprise!

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