I have been trying to make sense of the Budget and how it will effect the population at large. I've read and listened to the various so-called experts, and the first thing that becomes clear is that few of them are experts but rather lobbyists of the various political parties or special interest groups which may be effected, and thus their comment is far from impartial.
My personal view is that government cuts should hit everybody equally as a percentage of their expenditure. I believe that there is no group which should be exempt, even those on benefits. The government has been giving claimants more than it can afford, and hard that it may be, they have to accept that they need to make cuts as well as everyone else.
Certainly arguments that VAT increases fall disproportionately on the poor don't stand careful examination. Theoretically, the poor should be spending the bulk of their income on housing, heating and food. Basic food is VAT free, but of course if they prefer takeaways, not only are they paying extra tax, but also getting obese in the process. Presumably the poor aren't buying wide screen plasma televisions, computers or indeed petrol on which VAT is paid by the better off.
As a pensioner drawing the state pension in addition to a private pension, I pay tax at the standard rate, and it seems that I will be largely unaffected except for increases in fuel duty and VAT. How the re-indexing of my state pension will affect me, only time will tell.
Both my daughters will be affected as their husbands are higher rate tax payers and any future change to mortgage interest rates could cause a problem.
I don't know any really wealthy people; however one strong argument for not overtaxing them is that they frequently employ staff, which with the present unemployment situation, can only be a good thing. Cut their income, and being businessmen, their first economy will always be to cut staff.
So, provided that one does not accept the Labour argument that the way out of the present crisis is to spend, spend, spend, it seems to be a reasonable budget under the present circumstances. Indeed, there are arguments that it didn't go far enough, but that depends on what savings the government actually intends to make elsewhere.
I'm happy to go along with it so far; its just a pity the Chancellor didn't make one big saving by saying that he was not going to pay any more money to the EU until we all can see a full, independently audited set of accounts showing exactly where all the money is going.
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