Darling to unveil tax increases for wealthy in Pre-Budget Report

| November 24, 2008 | 0 Comments

Chancellor Alistair Darling’s plans to boost the economy were unveiled over the weekend after it was announced that he plans to cut VAT by 2.5% in a bid to stimulate the economy and prevent a ‘very deep recession’.

However, the plans to boost the economy are to come at a high price after the Government plans to borrow over £100 billion which will have to be paid back in the years to come, when the economy is expected to recovery, perhaps 2010 or 2011.

In a bid to help pay for the emergency package, it has been reported that Mr Darling will increase income tax for high earners during the next parliament.

Income tax for those earning over £150,000 a year will rise to 45p in the pound, this group of people account for approximately 2% of workers.

These tax increases are aimed at avoiding any tax rises for the remainder of the population.

According to Robert Chote, director of the Institute for Fiscal Studies, the UK’s leading tax thinktank, an enormous amount of revenue will not be achieved via this method. The current top rate of tax (40p in the pound) affects earnings exceeding £39,825 a year, affecting around 4 million people.

Finally, there is speculation that that national insurance payments will have to rise.

The Pre-Budget Report is taking place today.

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