Text Only Version Last Update: Press Releases (22 May 2023)
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How Brown will put 3m more in the top tax band
Paul Eastham, Daily Mail, 16 December 2023
GORDON BROWN aims to double the number of workers paying the top rate of income tax to a record six million, it emerged yesterday.
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The Chancellor's scheme designed to fill the black hole in his spending plans will see many more key workers such as senior nurses, teachers and police officers being forced to pay 40 per cent tax on their earnings over the next five years. They will be sucked in by Mr Brown's deliberate failure to adjust tax bands to match the increase in wages. The higher-rate threshold which is now 30,500 has been steadily falling behind wage inflation, meaning over a million more Britons currently pay higher-rate tax than in 1997.
Pressed by Tory committee member David Ruffley, Institute of Fiscal Studies director Robert Chote said one of the key questions over the Pre-Budget statement was how Mr Brown could balance his books over the next five years on what he called 'unchanged policies'.
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He said it was highly significant that the Treasury had failed to tell anyone what it expected to happen to workers' earnings over that period.
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If they go up by an average 2 per cent slightly less than normal 'then that would see the number of people paying higher rate tax roughly double over the next five years'.
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This, he said, had serious implications for pay packets.More and more middle-income workers are being brought into the top rate tax net.
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When Tony Blair entered Downing Street, a worker had to earn 161 per cent of the average wage to start paying top rate. That has fallen to 143 per cent and Mr Chote warned that it will come down further.
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'If you have five years of real earnings growth at 2 per cent, you are probably down to 129 per cent,' he said. 'That would increase the number of people paying higher rate tax from about three million at the moment to around six million.' He told MPs: 'So I think we need to be a little careful about what we think of as unchanged policies.
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Mr Ruffley expressed outrage at Mr Brown's sleight of hand, saying: 'Buried away in his Pre-Budget literature is the terrible truth, that middle England is having to face yet more stealth taxes.
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'Why doesn't he (Mr Brown) just come clean and admit he is going to have to raise taxes to fill the holes in his fiddled figures and dodgy documents?'
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