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George Osborne’s tax plans help the rich far more than the poorest George Osborne’s tax plans help the rich far more than the poorest
(about 2 hours later)
Tax cuts due to be confirmed by George Osborne in tomorrow’s Autumn Statement will help the rich far more than the poor, a new analysis has found.Tax cuts due to be confirmed by George Osborne in tomorrow’s Autumn Statement will help the rich far more than the poor, a new analysis has found.
The 10% highest earners in Britain would proportionally benefit around five times as much as the poorest thanks to the planned tax cuts.The 10% highest earners in Britain would proportionally benefit around five times as much as the poorest thanks to the planned tax cuts.
The Chancellor is set to confirm to Parliament that he will raise the salary at which people pay the higher 40% rate of income tax to £50,000 and raise the income tax personal allowance to £12,500.The Chancellor is set to confirm to Parliament that he will raise the salary at which people pay the higher 40% rate of income tax to £50,000 and raise the income tax personal allowance to £12,500.
The higher rate of tax is currently only paid by the 15% highest earners, who will all get a tax cut thanks to the threshold increase. Many low earners will not benefit from the increase in the tax free allowance either, because they earn under the current threshold.The higher rate of tax is currently only paid by the 15% highest earners, who will all get a tax cut thanks to the threshold increase. Many low earners will not benefit from the increase in the tax free allowance either, because they earn under the current threshold.
The net impact on the poorest could be even higher if the money to pay for the tax cuts was saved by cutting benefits or services – as Mr Osborne has pledged.The net impact on the poorest could be even higher if the money to pay for the tax cuts was saved by cutting benefits or services – as Mr Osborne has pledged.
The tax cuts were originally announced by David Cameron at the Conservative party conference in October. They follow Mr Osborne’s cutting of the 50% rate of income tax for those who earn over £150,000 in his 2012 budget.The tax cuts were originally announced by David Cameron at the Conservative party conference in October. They follow Mr Osborne’s cutting of the 50% rate of income tax for those who earn over £150,000 in his 2012 budget.
A graph comparing the impact of the parties' different tax cut plans by the Resolution Foundation Labour has been highly critical of the top rate tax cut, which only affects roughly the richest 1% of earners. Earlier this year shadow chancellor Ed Balls said he would reverse it, arguing that he wanted the “broadest shoulders bear a fairer share of the burden” of deficit reduction.A graph comparing the impact of the parties' different tax cut plans by the Resolution Foundation Labour has been highly critical of the top rate tax cut, which only affects roughly the richest 1% of earners. Earlier this year shadow chancellor Ed Balls said he would reverse it, arguing that he wanted the “broadest shoulders bear a fairer share of the burden” of deficit reduction.
The study of tax plans from all the parties by researchers from the London-based Resolution Foundation also said Labour's plan to introduce the 10p rate would have “very little impact on households” though it would also have “relatively little cost”.The study of tax plans from all the parties by researchers from the London-based Resolution Foundation also said Labour's plan to introduce the 10p rate would have “very little impact on households” though it would also have “relatively little cost”.
Cathy Jamieson MP, Labour's shadow economic secretary to the Treasury warned that the Chancellor’s Autumn Statement would benefit the rich.Cathy Jamieson MP, Labour's shadow economic secretary to the Treasury warned that the Chancellor’s Autumn Statement would benefit the rich.
"[The Government’s] unfair choices have hit families with children hard, while millionaires have been given a huge tax cut," she said. "We need an Autumn Statement that delivers a recovery for the many, not just a few at the top.""[The Government’s] unfair choices have hit families with children hard, while millionaires have been given a huge tax cut," she said. "We need an Autumn Statement that delivers a recovery for the many, not just a few at the top."
Ukip’s tax policy, unlikely to be implemented, was the only party’s more regressive than the Conservatives’, the report said. Ukip’s tax policy, unlikely to be implemented, was the only party’s more regressive than the Conservatives’, the report said. 
“Despite their claims, no political party is offering tax cuts targeted at low and middle income households,” the researchers said.“Despite their claims, no political party is offering tax cuts targeted at low and middle income households,” the researchers said.
“While Conservative and UKIP proposals are the most regressive, the Liberal Democrat and Labour approaches also result in households in the top half experiencing the biggest gains.”“While Conservative and UKIP proposals are the most regressive, the Liberal Democrat and Labour approaches also result in households in the top half experiencing the biggest gains.”
 
In February this year another think-tank, the Institute for Fiscal Studies (IFS), said people likely to gain the most from a £12,500 personal allowance planned by both the Conservatives and the Liberal Democrats were “those in the upper-middle of the overall income distribution”.In February this year another think-tank, the Institute for Fiscal Studies (IFS), said people likely to gain the most from a £12,500 personal allowance planned by both the Conservatives and the Liberal Democrats were “those in the upper-middle of the overall income distribution”.
The IFS also noted that some of those on low incomes would see reductions in benefits caused by the tax cut increasing their income offset any help it gave them.The IFS also noted that some of those on low incomes would see reductions in benefits caused by the tax cut increasing their income offset any help it gave them.
The tax cuts will be confirmed as a new ComRes/ITV News poll finds that that over half of voters (52%) disagree that the Coalition government has got the budget deficit under control, with just one in five (20%) agreeing that it has.The tax cuts will be confirmed as a new ComRes/ITV News poll finds that that over half of voters (52%) disagree that the Coalition government has got the budget deficit under control, with just one in five (20%) agreeing that it has.