Personal Allowances - Ouch!

LHW99

lhsecons said:

The_Green_Hornet said:

Considering the personal allowance was only £6,475 in 2009, a rate of £12,570 in 2026 still outperforms inflation over that time period.

Can I ask how you know. Do you have the inflation figures up until 2026 available?

£6475 in 2009 was equivalent to around £8,882.19 in 2020

https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator

Thrugelmir

ZeroSum said:

They've also froze the NI ones & thereby breaking an election promise.
Which strangely hasn't been mentioned, think people seem to forget about NI which discussing tax

Same stunt Brown pulled. Never did raise income tax. Instead hid NIC rises in the depths of the budget book for future years. 

ZeroSum

zagfles said:

ZeroSum said:

They've also froze the NI ones & thereby breaking an election promise.
Which strangely hasn't been mentioned, think people seem to forget about NI which discussing tax

No they haven't. They promised to raise the NI primary threshold to £9500, which they did last year. They also mentioned some vague "ambition" to eventually raise the PT to £12500 but no target date

Increasing it to 12,500 was to be done by the end of the election term

eskbanker

ZeroSum said:

They've also froze the NI ones & thereby breaking an election promise.
Which strangely hasn't been mentioned, think people seem to forget about NI which discussing tax

To be fair, this thread is specifically about the frozen personal income tax allowance (affecting all income including pensions, savings, dividends, etc) rather than all the other forms of personal taxation such as NI (only relevant to employment earnings), CGT, IHT, etc, etc....

coastline

At the end of the day it's just as well the LibDem's encouraged the Tories to raise the basic threshold for tax to £12500. Can you imagine being a lower paid worker and then clobbered with a VAT rise from 15% to 20%. Then along comes the Workplace pension to add more strain. It's ok if you have a reasonable income and many simply don't.
A bit of history regarding the GFC. Just months before the crash the Tories went into vote catching mood and were preparing to match Labours spending plans. This was at the same time that Labour were running a budget deficit which has been highlighted ever since.
 BBC NEWS | Politics | Tories 'to match Labour spending'
Watch George Osborne say in 2007 that the Tories would match Labour spending – LabourList
All a myth when you look only 5 years of surplus in 40 years. Even since 2010 when the Tories said it would be balanced within 5 years it never was.
_45690522_uk_budget466x280_2.gif (466×280) (bbc.co.uk)
Talking around £74bn deficit despite frozen allowances and corporation tax in a few years. So still not balanced around 2026 ? 
Sky reporter reveals hidden fiscal drag - Sunak 'gives with one hand, takes from other' | Politics | News | Express.co.uk
In the final paragraph here there's talk of a departmental spending review soon.
Overview of the March 2021 Economic and fiscal outlook - Office for Budget Responsibility (obr.uk)

Thrugelmir

This is the tip of the iceberg. Further tax rises will follow in due course. Cheap borrowing may not be around indefinitely. The Fed seems happy to let Treasury yields rise. Causing a global reaction. 

csgohan4

basically everyone is unhappy with the budget, stealth tax rises and corp tax rises.

But that debt needs to be paid and labour seems to think we should carry on spending like it was blank cheque.  

YellowStarling

Thrugelmir said:

This is the tip of the iceberg. Further tax rises will follow in due course. Cheap borrowing may not be around indefinitely. The Fed seems happy to let Treasury yields rise. Causing a global reaction. 

I agree.  "Tax Day" on the 23rd of this month will be more interesting than the Budget yesterday IMO.

talexuser

I can't buy the argument that the credit crunch would have been fine if the Tories had been in charge, every deregulation of the banks did not far enough for them in those days, and the national debt actually fell under Blair,
https://en.wikipedia.org/wiki/United_Kingdom_national_debt
only shooting up in 2008 with the crunch, borrowing up till then a similar level to previous governments.
https://www.tutor2u.net/economics/reference/fiscal-policy-causes-of-a-budget-deficit
However I am in two minds about the personal allowance. As I understand it the original idea of Beveridge was everyone should pay something and get something back from the state in return. Discounting the inefficiency of churning revenue through the government the idea was social cohesion and a feeling of fairness - we are all in it together. Maybe we should have a starting rate of 5 or 10% for the lowest paid balanced by a slightly lower PA? But stuck in a low wage economy with taxes having to top up wages at the bottom, and a separate NI system it's too complicated for me. 

Thrugelmir

talexuser said:

I can't buy the argument that the credit crunch would have been fine if the Tories had been in charge, every deregulation of the banks did not far enough for them in those days, and the national debt actually fell under Blair,

All the profit and more that HBOS made in the decade prior to the GFC was wiped out by PPI claim reimbursement. RBS speaks for itself. What has RBS cost the taxpayer since it collapsed?  Still effectively in public ownership to this day.  The final tranche of Northern Rock mortgages was finally sold last month. Yesterdays decisions can take decades to unravel. While the actors have moved on.