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March 21, 2012

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D.G.

Also, to add insult to injury, they're whacking 20% VAT onto hot takeaway pastries such as Greggs. They've dubbed it the "samosa tax", presumably because they figured your average working class person is too thick to cotton on to the pastie connection and too racist to care about "that foreign muck".

But the happy times of munching on a Steak Bake while people-watching in John Frost Square are about to get a fair bit pricier.

rwendland

I very much agree with you there DG.

It was annoying that the media kept parroting "2 million removed from tax" yesterday without any analysis of who the 2 million are. They are in fact a mixed bunch of part-time workers, not people working 40+ hours at near min wage struggling to make ends meet.

Many of those part-time workers will be spouses in affluent families doing a little work just beyond the tax free allowance. Indeed some of them will be self-employed using the income transfer trick to nominally part-time employed spouses/family to minimise tax liability.

So this LibDem measure, to some extent, is supporting a transfer of income from tax credit people who really need the help, to fairly affluent families. Essentially a Tory objective.

Increasing the tax free allowance will encourage these part time workers to increase hours to utilise the increased tax free allowance. Perhaps no bad thing in a time of full employment, but now it will make it harder for tax credit folks to increase hours from 16 to 24, and will generally make it harder for the unemployed to get jobs.

But do you hear an analysis like that on the media?

D.G.

The Child Benefit disaster is well represented in the media, but few seem to give a care for the changes to WTC that mean if, as a couple, your hours get cut to below 24 (previously 16) you
lose about £3k.

Guess not many journalists will be affected by the latter.

rwendland

Has anyone in Labour noticed that Osborne has created a marginal tax rate greater than 100% by his Child Benefit clawback scheme? I think Labour should attack him on this - there cannot be many chancellors who have done this, Osborne could have the record for the highest ever!

As I understand it, Child Benefit contnues to be paid (usually to the mother) but gets clawed back using the tax system (tax codes) from one parent if either earns over 50k.

So if the highest paid parent is blessed with 8 kids (gulp) and earns between 50k and 60k they would I think usually have a 100.33% marginal tax+NI rate.

Of course any more kids makes the marginal tax rate even higher.

The Daily Mirror (or Catholic Herald!) ought to have a competition to find the parent with the highest marginal tax rate in the country! Do you have a Daily Mirror contact you could suggest this to?

At least a couple could I think avoid this tax rate by separating! What a result for a Tory chancellor. Remember before the election the Tories were complaining about the Tax Credit+Housing Benefit+Council Tax Benefit corner case which resulted in a 95.5% marginal deduction rate - they have well topped that now.

The maths goes like this:

Child benefit for 8 kids per year:

(20.30 + (7 * 13.40)) * 52 = 5933.20

At the 1% recovery in the tax code per £100 = 59.33% tax rate within the 50k-60k range.

Add other tax + NI:

40 + 1 + 59.33 = 100.33% marginal tax rate

D.G.

"Boris pays his taxes and Ken does not."

And how much *less* tax will Boris be paying, now the top rate of tax has been cut?

I've pre-emptively censored the rest of my comment, as it was a needless personal attack on the Prime Minister and his ridiculous Elvis quiff.

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