Stealing From the Poor

You would think that a socialist Labour government would stick it to the rich and go easy on the poor. After all, that’s the point of socialism , isn’t it? Yeah, but Gordon Brown isn’t your dad’s socialist. This is New Labour, remember?

Gordon tried to impress everyone by lowering the main rate of income tax from 22% to 20%. Somebody has to pay for this, though. Gordon’s chosen the poor. The UK doesn’t have as many tax brackets as the US. In the US there are six brackets, ranging from 10% to 35%. Before April 1, the UK had three: 10%, 22%, and 40%. Now it has two. The 10% bracket has been taken away. Tax is payable at 20% from the first pound. At £36,000 ($72,000) it jumps to 40%. By contrast, an American at that income is still at 25%, $5,000 away from paying 28% on anything else he makes.

The 10% only covered the first £2,230 ($4,460). That is admittedly less than the $7,825 covered by the same bracket in the US, though as the Unnamed Women pointed out to me, it will still hit women working part time or students working their way through university the hardest. Obviously the lower the income, the greater the proportion of tax increase.

The Government are planning on a £6 to £8 billion increase in revenue from the change. To raise that money, it is estimated that 5 million households will be worse off. That would be the 5 million poorest households.

Just to re-emphasise the point I have made in the past about an elective dictatorship . . . After the Commons Treasury Committee condemns the changes tomorrow, they will be debated in the House of Commons in two weeks. It doesn’t really matter. They have already gone into effect. Despite the opposition from large numbers of his own party, the Prime Minister said there is no plan to change the policy. Not much point in having a Parliament, is there?

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2 Responses to “Stealing From the Poor”

  1. Mike Harmon Says:

    I came across your blog on Technorati. Nice site layout. I will stop by and read more soon.

    Mike Harmon

  2. Elizabeth Says:

    It will make a big impact on our family budget 😦


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