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Mugged by the Tories

Tuesday, February 21, 2017 11:21
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Cast your minds back if you can to the 2015 general election. Faced by the possibility of a son  of a communist agitator becoming Prime Minister, propped up by a nasty rabble-rousing single-issue nationalist minority party, the country re-elected the incumbent with an increase in the number of seats. No longer would the Tory PM have to get permission from Nick Clegg to cut the deficit, reform the public sector and the economy, to breathe life and vim into parts of the country moribund after so many years of ignorant socialistic self-defeating rule. Markets would be freed, the public sector refocused on the essentials, assets privatises and taxes cut. The country voted Conservative and the country would thrive.

One of the big discussions in 2010, you may remember, was about Labour’s “jobs tax” – a proposed increase in National Insurance “contributions”. The Right correctly argued that increasing the cost of employing people reduces the chance that people will be employed. Labour lost that election, quite spectacularly.

Since then we have enjoyed years of firm Tory/Liberal and Tory rule, by what we were led to believe were neo-Thatcherites in softer makeup.

One of George Osborne’s triumphs was to increase the personal allowance to take more people out of income tax liability. Championed by right-wingers and lefties alike, this was a bold departure from the Brownian era of fiscal drag on steriods. No more stealthy increases by holding down the thresholds, but a genuine burden reduction. 

Come 2015 the Tories felt confident enough to go a step further. They announced  that the squeeze on relatively higher but still unspectacular earnings had gone far enough: they promised that if elected with a Parliamentary majority they would increase the threshold for paying 40% tax until it reached £50,000 a year.

Well, I have just had a look at the numbers. Very excitingly I am due a £500 a year tax cut when the new thresholds kick in in April. £500 a year is a pretty good tax cut, right? And the threshold isn’t even close to the eventual £50k level. There should be plenty more scope for reductions in upcoming  even if my salary doesn’t move much.

But wait, what is this? The tax calculator site says that my monthly take-home will be *less* rather than more. Surely some mistake? Ah, I see: my NI “contributions” have bounced by £1000. 

The other day I received a letter encouraging me to donate money to the Tory Party. They had to be kidding, right?


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