Wednesday, April 22, 2009
Note: The average house price in the UK is above £150,000. The average wage is around £25,000 a year. For people to attain “middle class” status by actually owning their own “average” home and not being mired in mortgage debt, it would take them over 30 years – and that’s if they were able to save 20% of their income each year, before tax. These people cannot be considered “middle class” – by every reasonable measure they are poor.
All the newspaper headlines today in the UK are about “taxing the rich”. £150,000 a year is not “the rich” – it is the true middle class. People making £25,000 a year and scraping around not far above the poverty line while laboring under the burden of masses of debt cannot be considered “middle class”. They are poor, since the total amount of debt they are under far outweighs their tangible assets.
Millionaires and billionaires are “rich” – people who would have to save a huge chunk of their income for decades before even saving £1 million are not “rich”.
Chancellor Alistair Darling today punished high earners in a bid to drag Britain out of the worst recession since the Second World War.
In a Budget harking back to the bleak days of Old Labour, Mr Darling made clear that he would soak the rich to plug the enormous black hole in the public finances.
Mr Darling stunned Westminster by introducing a new 50 per cent tax band for those earning more than £150,000 which will come into force next year.
The move represents a break with Labour’s manifesto pledge not to raise the top rate of tax. It appeared to hark back to the 1970s when chancellor Denis Healy promised to ‘tax the rich until the pips squeak’.
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Personal allowances will also be fully withdrawn for those with incomes over £100,000 from next April – the first time a section of the population has been denied a tax break.
And from April 2011, the Chancellor will restrict pension tax relief for those with incomes over £150,000 so it is gradually tapered to the 20 per cent rate.
Personal allowances to be fully withdrawn for those with incomes over £100,000 from next April.
The Conservatives have suggested they would leave the new rate in place if they win power at the next General Election.
This article was posted: Wednesday, April 22, 2009 at 6:48 am