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Workers Must Pay £1,200 More Tax To 'hit Cuts Target'

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http://www.telegraph.co.uk/finance/personalfinance/consumertips/tax/8075176/Workers-must-pay-1200-more-tax-to-hit-cuts-target.html

cThe prediction from the highly-regarded economic forecaster will come as a blow to the Chancellor, who today outlines how the Coalition expects to reduce public spending by £83bn a year from 2014/2015. Deep cuts to the police, justice and business departments as well as the welfare bill are expected.

Speaking on the eve of the Comprehensive Spending Review, Ray Barrell, NIESR’s acting director, said: “They are very unlikely to achieve the scale of cuts they are looking for. Taxes will have to rise by the end of the parliament ... Plan B is very simple. You put up income tax by 2pc of GDP.”

He added that 2pc of GDP equates to “about £36bn” – roughly £1,200 for every working person in the UK. The current income tax bill is £150bn, equivalent to £5,000 per working adult.

Mr Barrell cautioned that taxes may have to rise still further if the Chancellor is to meet his “fiscal mandate” of eliminating the country’s £109bn structural deficit – the annual spending that will be left once the economy has fully recovered – by 2015/2016.

On NIESR’s forecasts, the Chancellor will miss the target by £26.6bn, though the official prediction from the Office for Budget Responsibility is that he will hit his mandate a year early.

Mr Barrell said: “The political reality is that they won’t be able to hit the [spending cut] projections ... We estimate they will get a half to two-thirds of what they are after ... There there will have to be a reaction to that.”

NIESR’s prediction of more pain for households came as Mervyn King, Governor of the Bank of England, declared an end to the “nice [non-inflationary consistently expansionary] decade” and coined a new acronym, saying “the next decade is likely to be a sober decade – a decade of savings, orderly budgets, and equitable rebalancing”.

Taxes don't have to be taxing but they might impact aggregate demand.

Still at least the recovery is on track and it's all contained.

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It's hardly that simple , putting income tax up 1,200 would cause tax take in other areas to fall since the worker has less money to spend elsewhere in the economy.

The balancing needs to come 100% from cuts , not tax increases.BBC license fee should be scrapped altogether as a nice tax cut , BBC to earn money from commercials and DVD etc sales.Stop all overseas aid , that saves 4 billion.Most of the cuts need to come from the NHS.

You don't need another quango to work out these cuts , just a whip around HPC.I'll do it for a packet of hobnobs and a nice cuppa tea.

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It's hardly that simple , putting income tax up 1,200 would cause tax take in other areas to fall since the worker has less money to spend elsewhere in the economy.

The balancing needs to come 100% from cuts , not tax increases.BBC license fee should be scrapped altogether as a nice tax cut , BBC to earn money from commercials and DVD etc sales.Stop all overseas aid , that saves 4 billion.Most of the cuts need to come from the NHS.

You don't need another quango to work out these cuts , just a whip around HPC.I'll do it for a packet of hobnobs and a nice cuppa tea.

Nah obviously you've never heard of the Gordon Brown school of economics. YOu put income tax at 110%, then you give out stipends to people to live on of say £5 a day. That should balance the books pretty darned quick!

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  • 145 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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