This is someone floating an idea

One Nation Tory MPs at centre of rebellion against ‘insane’ scrapping of 45p tax rate
The influential group, representing a bloc of centrist MPs, is building resistance to Kwasi Kwarteng’s mini-Budget

Really?

A former minister told The Telegraph that they expected the first meeting of the caucus after MPs return from the conference recess to be a significant moment in organising resistance to the mini-Budget.

“There’s widespread anger from people even in safe seats in the Home Counties who feel that this can’t go on,” said the former minister. “The question is how and what do we crystallise around?

“There’s some work possibly through the One Nation Group … that I think could be quite an interesting forum to discuss some of these things.”

They pointed out that Liz Truss had not mentioned cutting the additional rate during the Tory leadership contest, making it the “obvious and justifiable area for a coherent resistance to form around”.

No, not really. It’s someone posting an idea so that when they all get back the three of them can claim to be a cabal. OK, maybe four of them.

20 thoughts on “This is someone floating an idea”

  1. The media and its puppet masters have chosen the 45% cut as their weapon of choice to bring down the government and these little turds in suits, plumped up with the self-righteous satisfaction of knowing that they and they alone are in tune with the true will of the people (as expressed by the bbc), will be their enthusiastic enablers. The momentum is becoming irresistible.

  2. There’s an army of disgruntled civil servants and not a few political rivals keen to feed journalists with anything that might harm the government.

  3. It’s about time that the constituency associations deselected the Cameroon metrosexuals (whatever that means) and adopted Conservative candidates rather than LibDems.

  4. I’ve been trying to find an estimate of the cost of abolishing the 45% band. Hard details are thin on the ground but an annual figure of £2bn is quoted in various places along with “up to £6bn”. Few if any of the so-called economists are mentioning Laffer.

    In any event these potential costs appear tame compared with HS2 (£75bn, probably nearer twice that once it’s finished) and the various pandemic support measures (£400bn?). It’s all about politics though, this is the new partygate.

  5. The June 2022 House of Commons library publication “Tax statistics – an overview” links to a spreadsheet “Direct effects of illustrative change”.

    For the current and next two fiscal years the cost of decreasing the additional rate of income tax is shown as between £105m and £190m for each 1p reduction. Roughly speaking then, doing away with the 45% band will cost between £0.5bn – £1bn annually.

    By comparison the HMRC figures show that the effect of changing the basic rate by 1% varies between £5.25bn – £6.4bn annually over the same period. The truly enormous costs (or increased revenue depending on which way you look at it) of freezing allowances are also clearly shown. The increased tax revenue obtained by withdrawing the personal allowance at £100k is not shown for some reason.

  6. The tax take isn’t going to go down year-on-year. If the take doesn’t go down (as it didn’t for the rather larger Lawson cuts of 1988) then it doesn’t need ‘funding’. It does not ‘cost’. Check back with me when the figures come out, that’s a disproveable claim for you.

    But if I’m right, I never want to hear again on economics from those who say I’m wrong.

  7. Well, no, inflation is going to take care of that. Which will give us a lovely argument to have for decades, measuring the tax take pre or post inflation effects…..

  8. It appears to me that whenever HM Gov imposes a tax (or increase an existing tax), it invariably raises far less than the ‘expert economists at the Treasury’ think it will. As Hollande found out when raising VAT, Income Tax and Corporation tax ten years ago in Frogland.

    Likewise, when there is a ‘tax cut’, it seems the tax take goes up; maybe not as much as if the tax had remained as was, but looking at the numbers from the days of Fatcher, it doesn’t go down.

  9. Isn’t there a presumption here that an idea has occurred in the Tory party? That’d be a first for a very long time.

  10. Yes, even accounting for inflation, which would be wage inflation as this is income tax. Only a massive increase in unemployment would derail it, as it would all the numbers. Otherwise tax take will increase. No economist weasel excuses, that is what will happen. Of course as I am not a professional economist I don’t have to have a bunch of excuses lined up. If I’m wrong so be it.

  11. Let’s hope these “centrists” stick their heads above the parapet; getting rid of a few more closet Libdems would do the Tories the world of good.

  12. So the 40% income tax band which was OK under PM Toni Blair is now a right wing populist menace under PM Liz Truss? Bonkers.

  13. Good piece by Daniel Hannan in Telegraph

    It is depressingly easy to turn people against an otherwise desirable policy – more housing, say – by pointing out that someone will make money out of it. Prof Bryan Caplan of George Mason University calls it “anti-market bias”, and has shown that it is a constant across all eras and cultures. Voters persistently favour policies that make them poorer: nationalisations, rent controls, price controls, high taxation
    .
    As Caplan puts it in The Myth of the Rational Voter, “they focus on the motives of business, and neglect the discipline imposed by competition”.
    .
    This is most obvious in the reaction to the scrapping of the 45p top tax rate
    https://archive.ph/OhxHq

    [ telegraph.co.uk/news/2022/10/01/without-budget-post-lockdown-britain-heading-terminal-decline/
    ]

    People:
    Tax cut for me, but not for thee
    Tax rise for thee, but not for me

  14. So the bbc reports that the 45% rate will remain in situ and the telegraph leads with an article that finally mentions Laffer. Presumably a precursor to criticising the conservatives yet again.

  15. Back in 1974, people paid 83% tax on income above £20,000. Perhaps we should go back to that.

    Anyone opposing it would clearly only be looking out for the wealthy.

  16. The income above which the top rate of tax is paid is £150,000. That was the level set in 2010.

    It hasn’t changed since.

    Same with the withdrawal of personal allowances which starts at £100k. Introduced in 2010.

    Above £50k income, Child Benefit is clawed back through taxation. Introduced 2013.

    Those numbers would be £232,500, £155,000 and £62,500 if they’d kept pace with inflation.

    Fiscal creep. C*nts.

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