Well, it looks like George Osborne is going down the US Republican route of cutting taxes for the top wage earners (though he is taking £3 billion out of pensioner’s threshold funding to pay for it)… And Corporation Tax (something he flagged as long ago as 2006) is coming down to 22%. This second is, according to Paul Mason, his biggest pro growth measure:
@paulmasonnews OBR: Corporation tax cut increases growth by 0.1%, through 1% rise in business investment.
— Andrew Sissons (@ACJSissons) March 21, 2012
At the moment, around five million people over the age of 65 pay income tax on their pensions and other earnings. They are currently not taxed on at least the first £10,500 of their income. This will now be frozen in future years, saving the Treasury £360 million next year, £670 million in 2014, £1 billion in 2015 and £1.25 billion in 2016. The changes will help fund an increase in the personal allowance for everyone under the age of 65 and a 5p cut in the rate of income tax for the highest earners.
In better news (for Northern Ireland too, presumably) Paul Mason also notes that some of the fiscal pain has now been postponed until after the next election (that’ll be fun for Labour):
Important! Table 1.2 shows 6bn less fiscal tightening than plannedbefore election, but 12bn more in 2015-17.
— Paul Mason (@paulmasonnews) March 21, 2012
Though if you want the doom laden version of that, Peter Oborne is your man…
he has abandoned his target, set out explicitly in his emergency budget after the 2010 election, to abolish the structural deficit within the lifetime of this parliament.
Adds: Gordon from JRF says, calm down, calm down…
It raises £3.3bn a year by making 4.5m pensioners who earn between £10,500 and £24-29,000ish pay a bit more tax. On average, that’s £63 more next year, and £197 in following years. Not nothing, but not whopping either. Bear in mind the state pension is going up by 5.3% this year, while the Treasury expects inflation to come down later this year.
And he posts this on Twitter:
— Gordon Hector (@gordoh) March 21, 2012