Spending cuts are off the table - so how will the government look to repair public finances damaged by the COVID-19 crisis?
The chancellor hinted, when outlining the generous support he was gave the self-employed at the height of the crisis, that they could expect to pay national insurance at the same rate as people on PAYE in future.before being slapped down by Theresa May.
There is no logical reason why £1 earned by a 67-year old should be taxed less heavily than £1 earned by a 60-year old on the same wages.It might be possible some years from now but, as the Chancellor has only just cut VAT for the hospitality sector, putting it back up again would not benefit consumer spending in the near term.
But the tax raked in from the new band rose by £8bn when, in 2012, George Osborne cut the 50% additional rate to 45%. This can also be shown by HMRC estimates on how much would be raised by increasing individual tax bands. He subsequently reflected in his memoirs:"In five years I found it impossible to draft [a wealth tax] which would yield enough revenue to be worth the administrative cost and political hassle."
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