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The Autumn Statement II
The politics of the Autumn Statement once again are about fairness. The Coalition points out that under their plans the top 1% of earners will pay a quarter of all the income tax, and the top 5% of earners will pay 45%, more than twice their share of the income earned. The Coalition has raised taxes on the rich by more than taxes on other income groups. Labour says this is not enough, the richer people should pay more.
The Coalition counters by pointing out that the higher rate of Income Tax aimed at the top earners has so far caused (or coincided for those of you who still deny Laffer) with them paying much less total tax, a blow to a Treasury in need of more income to pay all its bills.
The Autumn Statement also reveals that since 2007 average earnings for those in work has risen by 20% (in cash terms – not real) whilst benefits for those out of work has risen by 24%. The Coalition as a result wishes to limit future rises in out of work benefits to 1%, likely to be below inflation. Labour is not sure it will support this, and asks to see the small print as to how many benefits are affected and if some of them are paid to people in work.
The best way to get the benefits bill down is to get many more people back into work. The UK state is still spending too much. Economic success will produce a more affordable state, and a more affordable state is necessary for economic success.
2012-12-06 06:00:16
Source: http://johnredwoodsdiary.com/2012/12/06/the-autumn-statement-ii/
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