James Chapman and Sam Fleming
Wednesday, November 26, 2008
Labour’s emergency mini-Budget will mean tax hikes for average earners, Britain’s most respected economic forecaster has declared.
The Institute for Fiscal Studies said millions of people earning more than £20,000 a year would pay more.
This casts serious doubt on the Treasury’s claim that all those with salaries under £40,000 are safe.
The tax burden is set to rise because of the increase in National Insurance contributions in 2011.
The Institute also warned that the Government was planning to introduce a 60 per cent tax rate for higher earners – as well as cutting spending on schools and hospitals.
The verdict was deeply embarrassing for Chancellor Alistair Darling, who spent the day touring TV and radio studios to insist that only those earning £40,000 or more would be hit by future tax rises.
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His ‘spend now, pay later’ Pre-Budget Report was widely seen as having heralded the death of New Labour, paving the way for unprecedented levels of Government borrowing and a new 45p top rate of tax.
The national debt is set to rise to £1trillion.
The Institute’s calculations were based on individual taxpayers with no children.
This article was posted: Wednesday, November 26, 2008 at 9:57 am