What the 2015 budget means for me, and why it’s vile

George Osborn’s budget raises the threshold for the higher (40%) tax rate from the current £42,385 to £43,000. Since I am fortunate enough to earn that much, the £615 difference will now be taxed at 20% rather than 40%, saving me 20% of that £615 — that is, £123 a year, or about £2.37 a week. Whoopy doo. I don’t want to be ungrateful, but £2.37 a week is not going to change my life.

akami

(The Telegraph claims this change could save me up to £1300 a year, but that seems to be flatly wrong. I can only assume they mean when the threshold has been moved all the way up to £50,000, as is the ultimate plan.)

So anyway, that’s me sorted out.

How about the people I know from my church — the Cinderford locals with jobs that pay less well? The news is not so good for them. Changes to Universal Credit, which affect the amount people can earn before benefits start to be withdrawn, will cost 3 million families an average of £1,000 a year. It’s a dead cert that some of those families will be in our church, which is in an economically depressed area.

So here is the impact of this budget: it’s going to take £1000 from the poorest working family we know (and note that this change is explicitly designed to penalise working families) and distribute that £1000 to eight people like me, so that we high earners can have an extra £123 per year.

Those poor families will be £20 a week worse off, so that I and seven others like me can have an extra £2.37. We’ll each be able to buy an extra craft beer, or tub of sun-dried tomatoes, or jar of marinated olives. Of course, the poor working family is going to struggle to afford break and milk, but hey, who cares about them? Not George Osborn, that’s for sure!

As Douglas Adams said: “Many men of course became extremely rich, but this was perfectly natural and nothing to be ashamed of because no one was really poor – at least no one worth speaking of.” And soon, so long as we stick to the austerity scripts, we’ll be rid of some of those troublesome poor people completely, like Greece, where tough austerity measures in Greece leave nearly a million people with no access to healthcare, leading to soaring infant mortality, HIV infection and suicide.

capitalism-and-freedom

So. This is a vile, vile budget. It’s hideous and contemptible and vicious. It makes me ashamed to be British. Or, no, wait — it makes me ashamed that George Osborn is British. He robs from the poor and gives to the rich. It’s a filthy thing to do, and the fact that it’s done under the law makes it filthier, not cleaner.

Oh, and by the way, Britain, you voted for this. The Conservatives told you exactly what they were going to do, we said “sounds great, go ahead”, and sure enough they went ahead. Hang your heads in shame Labour and Liberal Democrats, for not offering the electorate an alternative. Hang your heads in shame, everyone who voted to have a government that would do this.

And I would say hang your heads in shame Conservatives; but it’s perfectly clear that they have no concept of shame.

13 responses to “What the 2015 budget means for me, and why it’s vile

  1. Good news! You can take that extra £123 and donate it to a charity for the less well-off. Thanks to gift aid, you can add 40% on top of that, making £172 in total. If eight people do likewise, that’s around £1400 going to the poor instead of £1000 previously. Further, as you are in charge, not random bureaucrats, you can pick a charity that will use the money effectively. Everybody wins.

    What’s that? You don’t think those eight people will do that? You don’t believe that the rich will act morally without government coercion via taxation? It may be that you are simply more cynical than lovely innocent David Cameron. Who’s shameful now, huh?

    (Note: this post was created in a brain that handles sarcasm and may contain traces of sarcasm.)

  2. Look up the stats on what people actually give to charities. They are extremely disappointing. The average person gives £10 a month — less than £123 in total for the year. In other words, this weedly £123 windfall for high earners totally wipes out their charitable giving. (Oh, and giving is falling. not rising. It’s not that I’m more cynical than Cameron, it’s that I’m looking at the data.)

  3. Looking at data? You’ll never get into politics that way.

  4. Carol Haynes

    It is also true that proportionate to income the poorest in society give far more to charities. The poor are generally rather better connected to compassion … but hey that’s a dirty word to this government.

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  6. You know a pub that sells craft beer for only £2.37?

  7. Oh but Mike, you’re totally not being fair to nice Mr George Osborne. He isn’t *only* giving tiny tax breaks to the comfortably off while completely shafting the poor. He’s also giving really big tax breaks to the children of the comfortably off, via the changes to inheritance tax.

    So if those ungrateful poor people aren’t happy that their loss of £1000/year is helping to pay for giving the likes of us an extra £123/year, they should at least feel better because it’s helping to probably make a lot of us £140k better off apiece one day. Right? … No? Oh, the ungrateful bastards. Can’t they learn to appreciate the interests of their betters?

    Yeah, “vile” isn’t a strong enough word. And we’ve got five more years of this stuff to look forward to.

  8. Yes indeed, Gareth. I didn’t even touch on the startlingly widespread idea that unearned income should be taxed less than earned income — or not at all.

  9. “I didn’t even touch on the startlingly widespread idea that unearned income should be taxed less than earned income — or not at all.”

    I assume you mean inheritance tax here, but wouldn’t “unearned income” equally well apply to unemployment benefit? And taxing that seems perverse.

    Taxing inheritance is a form of double taxation, since the parent/spouse has already been taxed once. If your aim is to redistribute wealth, waiting until the wealthy die before doing it seems…inefficient at best. (Also brings to mind vultures. Perhaps that’s just me.)

  10. I did indeed mean inheritance tax. Taxing benefits would be a monumental waste of time. No doubt, whatever calculation is used in deciding how much to give in benefits, the proportion that “should” be paid back in tax is already take into account — if you like, PAYE operates on benefits, so you get the net amount, not the gross.

    On inheritance tax being a double taxation: I’m not sure I buy that idea (though also not sure that I don’t — I’m open-minded on it.) Here’s why. My salary has already been taxed once, too. Not just the employer’s NI contribution, but the taxes paid by the people who bought my company’s goods and services, enabling me to get my salary. And of course their money had already been taxed by the people who bought the goods and services that their employer sells. And so on.

    So I think that all money gets taxed multiple times as it makes its way through the economy — which I assume is why governments think it’s a good thing when money moves around. That being so, I’m not sure that “twice” is a special number that makes inheritance tax a bad thing.

    Am I missing anything?

  11. I strongly agree with Mike’s analysis of why inheritance tax isn’t double taxation. What gets taxed isn’t *money* but *gains*. If you pay me and then I die and my daughter inherits, first I have gained and then my daughter has.

    The thing that doesn’t quite make sense here, which is what I think makes it seem kinda-plausible to say that inheritance tax is double taxation, is that unlike almost all other taxes inheritance tax *isn’t* actually a tax on financial gain, because the tax is applied to the estate before it gets distributed to others, rather than to the others as they receive their portion.

    I think it would make a lot more sense for inheritance tax to be a tax on inheritances *received*. Unfortunately the simplest thing (treat inheriting money the same way as receiving it in salary, or the same way as getting it as a capital gain, and tax accordingly) is probably all wrong, because receiving a substantial legacy is a rare one-off rather than a regular thing like most income and a large fraction of capital gains. Maybe it could be amortized over five years, or something.

  12. If you *didn’t* die, you would be able to lavish that money on your daughter without tax. You earned it(*), now you get to decide who benefits. For instance, by paying for her schooling. If you die, why is it suddenly OK for the state to take your daughter’s tuition money away? (Retroactively, I might add, at least in the UK.)

    (*) Well, theoretically.

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