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Britain's middle class faces £30 billion tax raid to pay for coronavirus bailout


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A £30billion tax raid on the wealthy is being planned to help pay for the massive cost of coronavirus, it was claimed last night.

Treasury officials are said to be drawing up plans to target the better off, businesses and pensions to plug the gap in the nation's finances.

Capital gains tax and corporation tax would both be raised in proposals reportedly set to play a central part of Rishi Sunak's Budget in November.

The Chancellor is specifically understood to be looking at hiking corporation tax from 19 per cent to 24 per cent to raise £12billion next year and £17billion in 2023/24.

Second-home owners would also be hit under proposals to require people to pay capital gains tax at the same rate as they pay income tax.

That would involve people who own second homes and buy-to-let properties paying capital gains tax at 40 per cent or 45 per cent as opposed to the current 28 per cent when they sell the properties. 

But the tax moves are likely to spark a furious reaction from businesses still reeling from the impact of the pandemic and from Tory MPs in the party's heartlands. 

Mr Sunak is set on unveiling a number of 'soak-the-rich' measures to get control of the public finances, The Sunday Times reported.

A Tory ally told the newspaper: 'The political reality is that the only place you can get the money is from the better-off. The polling shows this would be popular.'


Almost two-thirds of the 9.4 million people whose salaries were paid by the Government worked during April and May, despite businesses being banned from claiming for employees who did so.

Chancellor Rishi Sunak's £30 billion scheme, which pays 80 per cent of salaries for furloughed staff up to a maximum of £2,500 a month, was introduced to save millions of jobs. But a study by academics at Oxford, Cambridge and Zurich universities reveals widespread abuse of the furlough system.

Family businesses that live off company dividends rather than a salary could also see their taxes rise. 

Treasury officials are also said to be looking at slashing billions from pensions tax relief which assists higher-tax payers to save for their retirement, the Sunday Telegraph reported. 

Meanwhile the Chancellor is said to be conscious of the need to 'address the balance' between online retail giants like Amazon and independent High Street businesses crippled by the Government's Covid-inspired lockdown. 

The Treasury is looking to rectify the perceived unfairness by pressing ahead with an online sales tax.

However, the proposals are opposed by business groups which fear it will leave the UK 'out of kilter' with other countries and deal a hammer blow to Britain's international competitiveness, The Sunday Telegraph reported.     

Last night there were reports that though no decisions had yet been made, No 10 was putting up fierce opposition to the tax-hike plans, with some officials demanding to know why reining in Whitehall departments' spending was not being considered instead.

Earlier this month, Mr Sunak hinted at tax rises to pay for the massive Government borrowing that has helped fund the fightback against the pandemic but which has led to the national debt topping £2trillion for the first time.

Government borrowing of over £150billion in just four months has funded emergency measures – which the Chancellor said had helped support millions of jobs. In an interview, he warned that 'difficult decisions' lay ahead. 

However, the Chancellor is also reportedly targeting the foreign aid budget to find extra cash although deep cuts would involve repealing legislation that states that the UK must pay 0.7 per cent of national income on overseas aid. 

Mr Sunak ordered a review earlier this summer of how to reform capital gains. His officials are now understood to be examining plans to 'equalise' capital gains and income tax.  

 

 

https://www.dailymail.co.uk/news/article-8677749/Britain-faces-biggest-tax-rises-generation-pay-coronavirus-bailouts.html

 

As I predicted here the middle class will be taxed not the ultra rich who can easily avoid  Also LOL @ them FINALLY admitting that the foreign aid budget has to go.. Only took them 8 years to see what nonsense it is.

 

 

Edited by Warlord
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BJ and Cummings will "come to the rescue" and heads will roll at the Treasury. Civil servants' heads, of course, not ministers.

Cummings' plan to "reform" the civil service, as with Health and Education, will continue unabated.

Clowns like Hancock, Williamson and Sunak will be cleared of any blame and the matter will be declared closed.

Who will be next? Home Office or Foreign Office?

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11 minutes ago, Bruce Banner said:

BJ and Cummings will "come to the rescue" and heads will roll at the Treasury. Civil servants' heads, of course, not ministers.

Cummings' plan to "reform" the civil service, as with Health and Education, will continue unabated.

Clowns like Hancock, Williamson and Sunak will be cleared of any blame and the matter will be declared closed.

Who will be next? Home Office or Foreign Office?

And then we'll have an inflationary sh#tstorm and the economics of the situation will ruin the govt.

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2 minutes ago, Si1 said:

And then we'll have an inflationary sh#tstorm and the economics of the situation will ruin the govt.

Which will be blamed on the Civil Service and the Government will grant itself new powers to make sure it can't happen again.

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2 hours ago, Warlord said:

Last night there were reports that though no decisions had yet been made, No 10 was putting up fierce opposition to the tax-hike plans, with some officials demanding to know why reining in Whitehall departments' spending was not being considered instead.

This bit is interesting and spot on. 

They don't need to tax more if they cut the size of government. Quango's and useless departments cost over £100 billion. Cutting 30% of these will produce the billions he needs.  However the permanent state would NEVER cut the size of government due to VI so instead they want to raise taxes which is counter productive because there is only so much you can squeeze and at some point people become less productive and have a disincentive to work or invest due to the taxation.

 

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22 minutes ago, jiltedjen said:

Taxing second homes seems very sensible and moral 

especially during a housing crisis

 

How much would it raise though?  Probably a pittance. They need to cut gov't!

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Ooops, I forgot about Mark Sedwill.....

The Johnson-Cummings war on the civil service is very troubling. It looks like the start of a rolling coup against institutions.The corruption of constitutional order can happen very quickly and reversing it can take a very long time and at huge cost

https://www.independent.co.uk/voices/boris-johnson-dominic-cummings-civil-service-war-mark-sedwill-judiciary-a9591721.html

For the record, I am absolutely no fan of Jonathan Powell, but as former chief of staff to Blair, he knows more than most what the non elected staff at No 10 can achieve.

 

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Posted (edited)
10 minutes ago, shlomo said:

I do not think the middle classes can afford this.

Well of course not but someone has to pay for the furlough scheme, the NHS, schools etc.  There's no free lunch or magic money tree,. Stuff has to be paid for and soon most people will realise it when they get hammered with taxes.

Edited by Warlord
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12 minutes ago, shlomo said:

I do not think the middle classes can afford this.

Well they can't afford this as well as sending their kids to public school, shopping in waitrose, holidaying in Florida and having a second home.

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1 minute ago, Social Justice League said:

Many working and middle class people will be regreting voting for this Tory communist party for only one reason.............'Get Brext Done'

Hilarious actually.  They were fecking warned.

I forgot about Brexit, coronovirus takes up all my attention 

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4 minutes ago, Si1 said:

Well they can't afford this as well as sending their kids to public school, shopping in waitrose, holidaying in Florida and having a second home.

Those were the good old days, we have a sharp crash coming 

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2 minutes ago, shlomo said:

This is nothing to do with Brexit or the Tories, this is the new business environment because of the coronovirus 

As well as the debt carried over from the credit crunch, and stupid house price propping policies etc

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The sensible approach is to stop subsidising all the low tax stuff - TC subbed wages, housing benefit over ~600/m, free access to public services by non citizens, BTL.

And encourage activity that does not require sub and yields tax revenue.

Weve not seen this since the mid 90s.

 

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1 minute ago, spyguy said:

Here is a long list of things to claw back some money.

Some will happen. Some wont.

 

 

 

What about Triple Lock Pension?

Anyhow, it's a new political world. One where they can't lean on hpi to win elections.

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1 minute ago, Si1 said:

As well as the debt carried over from the credit crunch, and stupid house price propping policies etc

Can kicking. Eventually you hit a wall. Or break the can.

The policies immediately after 2008 were fine - as long as the UK did not have a recession in the next 3 years,.

They could have only been implemented by a man who stopped booms and busts.

The reality is that you take the hit then and there.

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Just now, spyguy said:

The sensible approach is to stop subsidising all the low tax stuff - TC subbed wages, housing benefit over ~600/m, free access to public services by non citizens, BTL.

And encourage activity that does not require sub and yields tax revenue.

Weve not seen this since the mid 90s.

 

What do you think the effects would be on Scarborough if they stopped All these benefits and multiple that by the country 

we are screwed 

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1 minute ago, shlomo said:

What do you think the effects would be on Scarborough if they stopped All these benefits and multiple that by the country 

we are screwed 

The benefit class would go back to Leeds, Donnie and Bo4o.

The effect on Scabby with the current policies are pretty negative.

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