Thursday, March 22, 2007

Tax Goes Dutch

Could it be spring again?

In case you missed it, the TaxPayers' Alliance initial budget analysis is here, and is well worth reading.

Eschewing shot foxes entirely, their soundbite comment was that "Gordon Brown has basically delivered George Osborne’s first Budget". It's been widely picked up in press coverage this morning.

Corin Taylor, TPA Head of Research, fingers the key point:

“Gordon Brown has established the principle that cuts in tax rates are possible. Never let it be said again that they will create damaging instability for the economy. Politically speaking, the pressure on the Conservatives could now mean that there will be a benign tax Dutch auction between the main parties ahead of the next election. The fiscal horizon of the United Kingdom looks very different this afternoon. This is not a tax cutting budget, it is not a tax raising budget, it is a post-dated cheque which will make most people better off in 13 months time.”

From stock markets to central banking to tulips, Britain has always benefited by learning from the Dutch.
PS The TPA note also includes a table showing how the income tax and National Insurance changes will impact across the income distribution. In summary, all but the lowest income groups gain, and by the time you're on £45,000, you're gaining £450 pa. Unless of course you're a small businessman.
PPS The TPA- along with guests including the Bloke- discussed the Budget on 18 Doughty Street's Your Money programme (a 1 hour special, just like Elvis in Las Vegas).

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