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.

Adding on the "popular tax" of MSL (more of that lunacy later) someone earning £14K now has to find an extra £560 per year just to pay their tax bill.   That will seem a paltry sum when viewed from the lofty financial perches most of the councillors enjoy but to a single person scraping by it is a significant cost, particularly when the you look at all the other costs they have to bear, many of which also look set to be significantly increased.  Compare that to someone on £60K: yes, I know they pay more tax anyway (that's how the tax system works) but their burden under the new regime will increase by a mere £1,170 - so they'll earn just over four times the salary but suffer only double the tax increase?  In what twisted financial way is that a fair and equitable increase, paticularly in these difficult times?

It has been some time since The Beak has taken to his high horse, keeping up with the local scene while travelling is never easy, but while we're up here let's have a quick chat about MSL as well.  We are constantly told this was a popular tax before its abolition in the nineties and everyone feels we should pay it.   "Popular" tax, my feathered arse - there is no such thing.   Some people say it's a fair tax because everyone uses the medical service.   By the same token, everyone uses the education system so, if that's your argument, shouldn't we have an education levy too?  The MSL will raise £660,000 per year according to the Director of Corporate Treasures but that is just bollocks too, isn't it?   It should raise about £165,000 from the civil service - but then we will be giving them a 1% pay rise so that doesn't really count this year - and The Beak wonders if FIG is counting the 1.5% they should be contributing?  If so, then that's another £275,000 gone from the pot, - no matter what sort of financial wizardry is used which says FIG can contribute to FIG, it is money going around in circles however you paint it.  That leaves just over £200,000 from the private sector which is hardly going to save the medical department.  (Although as they are only paying for two doctors at the moment the costs must be plummeting anyway - but that's another story!)

By comparison, how much would a small percentage rise on the upper tax bracket have raised?  Or even, God forbid, a higher tax bracket after the 26% bracket of say 30%.  No one wants to see the sort of super tax they had in the UK a few years ago but let's be realistic, the more you earn the more tax you can afford, so the more you pay - that is just the way it is.  Or at least the way it should be!

The councillors have had a couple of days to deliberate since the proposals were announced and The Beak has wings and legs crossed that tomorrow's news will be better...

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