Results tagged “tax” from Birmingham Post - News Blog

The Chancellor insisted today: "What I can't do is to rewrite the budget."

He sounded almost regretful. Hearing Alistair Darling speak, it didn't sound as if he believed the changes had been entirely for the best. The impression was strengthened when he pledged to "return" to the issue in future financial statements.

He was referring, of course, to the decision to scrap the starting 10p rate of income tax - so that people pay the higher, basic rate instead - to pay for a cut in the basic rate from 22p to 20p.

The effect is to increase taxes for people on lower salaries. The Chancellor and Gordon Brown, who announced the change back when he was Chancellor in 2007, would point out that most of those affected will enjoy the benefits of higher tax credits to make up for it. But an estimated five million are still worse off.

In fact, I wonder if the Government hasn't placed too much faith in this tax credit stuff. If you increase someone's taxes but make up for it in some other way, I suspect that what they remember is that you increased their taxes.