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A Firm Rebuke For The Chancellor

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A firm rebuke for the Chancellor

Is it possible to have sympathy with Kwasi Kwarteng over his reverse ferret tax move?

I’ll have a go.

So the 45p tax rate isn’t paid by that many people, so in turn it doesn’t raise that much money. Cancelling it is symbolic rather than a (nother) massive hole in the UK’s finances.

What would the symbol have been?

It would be that income taxes don’t always have to go up. With the 45p gone, the Tories could later have begun a debate about the 40p higher rate.

Specifically, how many more people are paying it these days.

Fiscal drag, in the jargon, means that inflation and higher earnings tip more and more people into higher tax brackets without the government explicitly raising tax rates.

For the 2022/23 tax year, the 40% tax rate kicks in at just over £50,000.

No one reading this regards that as an impossible fortune.

But it applies to six million people, up from 4.3 million in 2019.

The Chancellor and the PM were trying to shift the debate away from one about just how much revenue governments can collect to how much money people can keep, untaxed.

They did this at the wrong time and in a chaotic manner, but that was the plan.

Anyway, results in: Can you have an open debate about tax and who pays it?

Not at the moment.

For our Find Out Now poll this week we asked: Chancellor Kwasi Kwarteng has reversed plans to scrap the 45p higher rate of income tax. Do you think this was the right decision?

Almost universally, across all socio-economics groups and voting intentions, the answer was “yes”.

You can see the full results below.

Press release of the day

Easy tabloid fodder here from Slingo, which comes up with the famous families with the biggest business interests.

The Trumps are top with more than 500 entities/brands.

The Kardashian-Wests and the Jenners are also in there.

Stories that will keep rolling

1) Will markets react to the Truss speech?

2) What does Tesco have to offer on the CoL crisis?

3) Which businesses are helped by a lower pound?

4) Is the Topps Tiles DIY boom over?

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