Thursday, May 27, 2010

Legally robbing poor Bennies

The budget proposals are out and while much of the content was probably unavoidable I was suprised by the multi-pronged attack government is making on the lower income earners and the private sector.

Lowering the personal allowance by two thousand pounds perhaps seemed an easy win and is also somewhat difficult to argue against on first consideration, however when the lower tax band too is lowered by a thousand pounds, it becomes clear that the main point of this budget (from a tax point of view) will be to squeeze as much money as possible out of the lower paid while keeping those on more significant salaries paying little more.  The tax bill for someone with a salary in the low to mid teens will significantly increase - this in a country which has a high cost of living as it is - while someone with a salary in the 50-60K bracket not only has a much lower increase in percentage terms but the affordability of the tax increase for those more blessed is of course much higher.