Britain’s Tea Party Budget

[marmar]

from Dissent magazine:



Britain’s Tea Party Budget
Michael Harris - March 23, 2012 12:15 pm


The government of the United Kingdom’s annual budget is set during a moment of pure political pantomime. While drinking an alcoholic drink, the Chancellor of the Exchequer (akin to the U.S. Secretary of the Treasury) stands in the chamber of the House of Commons and reads out a list of statistics and figures meant to illustrate his command over the nation’s finances. Under the previous Labour government, Chancellor Gordon Brown’s set speech would be a marathon list of additional public spending. Yet times have changed. The fiscal restraint promised at the beginning of Britain’s Conservative and Liberal Democrat coalition government has morphed into a budget that would please grassroots Tea Party activists—with huge cuts to welfare to pay for a tax cut for the richest 1 percent of UK earners. The wildest fantasies of the Tea Party movement are being implemented across the Atlantic, in a chilling warning for U.S. progressives.

George Osborne, Britain’s current Chancellor of the Exchequer, leaked almost the entirety of his speech in advance. Even so, the details have been truly shocking. Pensioners, children, and welfare claimants will all be hit to pay for tax breaks for the richest 1 percent. There will be a cut in the top tax rate (on incomes over £150,000, or about $235,000) from 50 percent to 45 percent and big cuts in corporate taxes. Middle-class pensioners will lose nearly $500 a year, and the 18 million people in the UK on some form of welfare (usually lower-income families) will lose $800 each. On average, workers earning $30,000 will lose $300 in welfare, with single parents working up to sixteen hours a week losing a staggering $6,300.

Yet Britain’s millionaire bankers will pocket nearly $70,000 a year each in tax breaks, and the corporate sector will see its tax rate fall from 28 percent to 22 percent by the end of this parliament—18 percent lower than the United States, 16 percent lower than Japan, 12 percent below France, and 8 percent below Germany. This is the total tax rate—there are no state corporate taxes in the UK.



Before the budget, the coalition’s mantra that “we’re all in this together” was found to be wanting. The previous budgets redistributed income away from the poorest 10 percent of the population. They lost out more than any other group—except the very richest. The graph below was produced before the top tax rate was cut from 50 to 45 percent. With the reduction, it’s likely that the poorest are paying the most for the economic crisis. ....................(more)

The complete piece is at: http://www.dissentmagazine.org/atw.php?id=716

[nxylas]

1. And the fact that the richest lose more is purely down to Lib Dem pressure

Ruling as a coalition means that the occasional bone has to be thrown even to a partner as craven and spineless as the Lib Dems.