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Budget 2016

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Dave1987

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So what did people make of the budget today?

I thought it was very very good from a personal perspective. The tax allowance increases was very welcome, as was the freezes in fuel duty and beer duty.

And a bonus was watching McDonnell completely avoiding the question on the BBC News about where he would cut spending even though he is trying to claim economic competence. The SNP are a massive bunch of hypocrites IMO, wanting huge tax breaks for the oil industry but then criticising Osbourne for cut business rates and increasing tax allowances. Yet if Scotland were independent right now it would be facing bankruptcy with the oil price where it is and the SNP spending what they want to.
 
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aformeruser

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The tax allowance increases was very welcome, as was the freezes in fuel duty and beer duty.

The Conservatives had increasing the personal allowance to £12,500 during the term of the next parliament in their manifesto, so there should never have been a question of whether it would be included, the only question should have been how quickly will they do it.

I've not kept track of what commitments they made with regards to the 40p tax rate threshold as it doesn't affect me or anyone I'm close to.
 

Oswyntail

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It is sad seeing that old buffer Corbyn having to respond impromptu to the Budget before he has seen any of the details. Rather than take the opportunity to give the Labour alternative, he has banged the "unfair" drum - he took a punt that there would be at least something he could hang that on when he wrote his speech, but got it wrong. What is more distressing is that the Corbynites on the forums are already re-bleating his sentiments without having apparently looked at what was said. Not surprised, just hoped for better
 

aformeruser

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It is sad seeing that old buffer Corbyn having to respond impromptu to the Budget before he has seen any of the details. Rather than take the opportunity to give the Labour alternative, he has banged the "unfair" drum - he took a punt that there would be at least something he could hang that on when he wrote his speech, but got it wrong. What is more distressing is that the Corbynites on the forums are already re-bleating his sentiments without having apparently looked at what was said. Not surprised, just hoped for better

Since Milliband became Labour leader the response to the budget has usually be done by the leader of the opposition. Last time the response was left to the shadow chancellor as was previously the case but McDonnell's response mentioned Chairman Moa's little red book to the shock of both the government and the opposition!

Regarding the saving accounts for people on benefits that the government will add bonuses to - this was going to happen in 2010 after Gordon Brown put the plans in place pre-2010 election but Osborne pulled it saying it was unaffordable.
 
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Phil.

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So what did people make of the budget today?

I thought it was very very good from a personal perspective. The tax allowance increases was very welcome, as was the freezes in fuel duty and beer duty.

And a bonus was watching McDonnell completely avoiding the question on the BBC News about where he would cut spending even though he is trying to claim economic competence. The SNP are a massive bunch of hypocrites IMO, wanting huge tax breaks for the oil industry but then criticising Osbourne for cut business rates and increasing tax allowances. Yet if Scotland were independent right now it would be facing bankruptcy with the oil price where it is and the SNP spending what they want to.

Without Westminster money Scotland as an independent nation would be bankrupt now. The oil revenues compared with thirty years ago are all but gone.
 

Dave1987

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Without Westminster money Scotland as an independent nation would be bankrupt now. The oil revenues compared with thirty years ago are all but gone.

Trying getting Sturgeon to admit that! When the GERS was released for the state of the Scottish economy it showed a massive deficit. Yet Sturgeon wouldn't admit the Scottish economy was in dire straits and tried to claim that the Scottish economy is strong even without oil. Is she living in a parallel world to the rest of us?
 

backontrack

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I guess I like the idea of a sugar tax, but only if the companies themselves are getting charged. They're actually allowed to charge it to their customers now.
 

backontrack

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I guess, but what about the government looking at these businesses instead of charging the consumer?
 

ainsworth74

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I guess, but what about the government looking at these businesses instead of charging the consumer?

The whole point of the 'Sugar Tax' is to force people away from buying unhealthy sugary drinks. To make the businesses pay the cost rather than the consumer defeats the purpose. It would be like making cigarette companies foot the bill for Tobacco Duty!
 

Xenophon PCDGS

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I heard it said in passing at a meeting that I attended this afternoon that the matter of sugar in many of the soft drink industry's portfolio of products is something that industry has been well aware of for quite some time, yet they have been given a further period of time in order to reduce the sugar level further to the two-band tax system that is said will so apply, but the usual tax increases on tobacco-related products comes into immediate effect from this evening.
 

Dave1987

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The Conservatives had increasing the personal allowance to £12,500 during the term of the next parliament in their manifesto, so there should never have been a question of whether it would be included, the only question should have been how quickly will they do it.

I've not kept track of what commitments they made with regards to the 40p tax rate threshold as it doesn't affect me or anyone I'm close to.

They are increasing the level at which you pay the 40p rate to £45k. IMO its a regressive tax.
 

Bletchleyite

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They are increasing the level at which you pay the 40p rate to £45k. IMO its a regressive tax.

I don't understand. Income tax is a progressive tax because it increases in excess of proportionally to an increase in income.

It seems common for people to incorrectly use the term regressive tax to simply mean a bad tax - you're not doing that, are you? A regressive tax is one that hits poorer people disproportionately hard. The changes to income tax are quite the opposite of this.

Increasing the level of the 40% band a bit is just keeping it up with inflation; to do otherwise would be a real-terms tax increase.
 
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GrimsbyPacer

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It's a terrible budget.
The cut in help for the disabled will mean 400,000 will have support fall from £82 to £55, another 200,000 will lose all help altogether.
What is it with the government attacking the disabled while giving a taxcut for those earning £44,000?

The sugar tax will cost my family a fortune as we don't drink products containing certain sweetners which are linked with cancers. Plus sugar tastes better.
But why just pop? It makes no sense to target just that one type of drink.

The transport plan is very lacking.
I'm not impressed with any of it.
 

Steveman

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The sugar tax will cost my family a fortune as we don't drink products containing certain sweetners which are linked with cancers. Plus sugar tastes better.

A fortune ? does your family drink sugary drinks by the bucketful then.
Regarding your cancer claim there has never been any evidence to link cancer with sweeteners in humans.
Getting fat by drinking loads of very sugary drinks is a proved and definite cancer risk so I would say you've got things rather mixed up.
 
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Mojo

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I think another excellent budget from Osborne. Increased limit at which the 40% tax applies will really help a lot of the "squeezed middle."
Also support and encouragement for people to save would be great. Won't really help me as my savings are mostly built up already, but I do really think people need the support and it's a bit of extra money for the people who are prudent.
Lots of great and useful transport projects being talked about today.
The whole point of the 'Sugar Tax' is to force people away from buying unhealthy sugary drinks. To make the businesses pay the cost rather than the consumer defeats the purpose. It would be like making cigarette companies foot the bill for Tobacco Duty!
I'm against the idea of a sugar tax applied to all confectionary items such as chocolates which has been suggested in the past. I think applying it to fizzy drinks, which have alternatives available, and are much more unhealthy and serve little purpose, is a much better idea.
 

Dave1987

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I don't understand. Income tax is a progressive tax because it increases in excess of proportionally to an increase in income.

It seems common for people to incorrectly use the term regressive tax to simply mean a bad tax - you're not doing that, are you? A regressive tax is one that hits poorer people disproportionately hard. The changes to income tax are quite the opposite of this.

Increasing the level of the 40% band a bit is just keeping it up with inflation; to do otherwise would be a real-terms tax increase.

Because it puts a sort of glass ceiling on income. Once you start earning more than the 40p threshold you only see about half of the money you earn over that threshold once tax and NI have been taken on it. So there really isn't much point in earning between £45k to say £60k a year because you get hit for tax so much that you never really see that income in your pay packet until you earn more than £60k a year. So a lot of people who earn between £45k and £60k shove that income above the 40p threshold into addition pension contributions so they don't get taxed to death on it. So in that way it is regressive as that money is not put into the economy as spending and not put into exchequer because people avoid the tax by putting it into pension pots. And if we are going to start putting obstacles in the way of people wanting to progress in their careers and earn more then I certainly see that as regressive. Just as the rise in the minimum wage is a good thing, trying to put a metaphorical cap on wages by taxing the hell out of people is definitely a bad thing.
 
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deltic

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Since Milliband became Labour leader the response to the budget has usually be done by the leader of the opposition. Last time the response was left to the shadow chancellor as was previously the case but McDonnell's response mentioned Chairman Moa's little red book to the shock of both the government and the opposition!

Regarding the saving accounts for people on benefits that the government will add bonuses to - this was going to happen in 2010 after Gordon Brown put the plans in place pre-2010 election but Osborne pulled it saying it was unaffordable.

The leader of the opposition always responds to the budget speech and has done so for decades AFAIK. Interesting article by Danny Finklestein in the Times today (he was William Hague's advisor when he was leader of the Tories) saying Corbyn should ignore what Osbourne says in his budget and set out what he would have done instead. As you dont know what is in the budget in advance you are on hiding to nothing trying to respond to it on the hoof.

Apart from the sugar tax, which should have been applied across the board, it seemed a very timid budget with not much in it - presumably not trying to upset to many people before the EU referendum.
 

aformeruser

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The leader of the opposition always responds to the budget speech and has done so for decades AFAIK.

Cameron let Osborne respond to it when he was Shadow Chancellor so it must have been Cameron who did the unusual opposed to Milliband. Although, like I said McDonnell responded after the previous budget.
 

Dave1987

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A fortune ? does your family drink sugary drinks by the bucketful then.
Regarding your cancer claim there has never been any evidence to link cancer with sweeteners in humans.
Getting fat by drinking loads of very sugary drinks is a proved and definite cancer risk so I would say you've got things rather mixed up.

Indeed if it gets people away from drinking sugary drinks and gets them drinking more water then that's surely a good thing.
 

aformeruser

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Because it puts a sort of glass ceiling on income. Once you start earning more than the 40p threshold you only see about half of the money you earn over that threshold once tax and NI have been taken on it. So there really isn't much point in earning between £45k to say £60k a year because you get hit for tax so much that you never really see that income in your pay packet until you earn more than £60k a year. So a lot of people who earn between £45k and £60k shove that income above the 40p threshold into addition pension contributions so they don't get taxed to death on it. So in that way it is regressive as that money is not put into the economy as spending and not put into exchequer because people avoid the tax by putting it into pension pots.

So would you be more supportive of a 10p rate, a 20p rate, a 30p rate, a 40p rate and a 50p rate, with the latter only for very high earners?

The idea of a fixed rate for everyone either wouldn't balance the books or would push a considerable number of people in full time jobs in to poverty.
 

deltic

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Cameron let Osborne respond to it when he was Shadow Chancellor so it must have been Cameron who did the unusual opposed to Milliband. Although, like I said McDonnell responded after the previous budget.

Are you sure - a quick google suggests Cameron responded to all of Labour's budgets when he was leader of the opposition
 

Dave1987

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So would you be more supportive of a 10p rate, a 20p rate, a 30p rate, a 40p rate and a 50p rate, with the latter only for very high earners?

The idea of a fixed rate for everyone either wouldn't balance the books or would push a considerable number of people in full time jobs in to poverty.

I'm definitely in favour of something like that yes. The unfortunate thing you have with the very high earners is is that they can easily move out of the country to somewhere like Monaco or Switzerland if you want them to live and spend money in the UK you can't tax them to death by doing so. Middle earners are an easy target for higher taxation which is why the "squeezed middle" cliche was born. I really do want to see the day when very low earners are not taxed at all, and when working is always the better option financially than a life on benefits.
 
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dcsprior

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Because it puts a sort of glass ceiling on income. Once you start earning more than the 40p threshold you only see about half of the money you earn over that threshold once tax and NI have been taken on it. So there really isn't much point in earning between £45k to say £60k a year because you get hit for tax so much that you never really see that income in your pay packet until you earn more than £60k a year. So a lot of people who earn between £45k and £60k shove that income above the 40p threshold into addition pension contributions so they don't get taxed to death on it. So in that way it is regressive as that money is not put into the economy as spending and not put into exchequer because people avoid the tax by putting it into pension pots.

IMO, "about half" is stretching it slightly, they get to keep 58%. For comparison, a basic rate taxpayer getting to keep 68%

If a basic rate taxpayer earns an extra £147.09 by working harder or longer, they get an extra £100 in their pocket.

If a higher rate taxpayer earns an extra £147.09 by working harder or longer, they get an extra £85.29 - i.e. the amount they get to keep from their additional earnings is £14.71 less than for a basic rate taxpayer. I don't think 14.71% is a significant deterrent to the higher rate tax payer wishing to work harder or longer.

As an aside, I think that both the personal allowance and 40% threshold should be linked to either RPI or CPI or average earnings - then chancellors of all parties should announce changes (or lack of changes) relative to a wage/price index, rather than in sterling terms. Doing the same for the minimum wage would also be a good idea.
 

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I think the idea is to drive you towards drinking water.

Well maybe they should sort the water out, it currently tastes disgusting when it comes out of taps across the country, and it has added stuff in it, not just H2O.

Steveman, I do drink 'a bucketfull' of pop (Lucozade), I have no diet alternative, I'm not obese or with any health problems. Why should I have to pay more? Sugar is essential and comes in many diffent forms, Lactose for example, so why do milkshakes get away from the tax while pop doesn't?
 
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Dave1987

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Well maybe they should sort the water out, it currently tastes disgusting when it comes out of taps across the country, and it has added stuff in it, not just H2O.

I do drink 'a bucket load' of pop (Lucozade), I have no diet alternative, I'm not obese or with any health problems. Why should I have to pay more? Sugar is essential and comes in many diffent forms, Lactose for example, so why do milkshakes get away from the tax while pop doesn't?

I get bottled water that is dirt cheap and tastes fine.

The sugar most people drink is refined cane sugar which is not good for you at all. There are many different types of natural sugars that are found in fruits etc etc which are good for you in moderation. Can't say I would consider drinking 'a bucket load' of Lucozade as being remotely good for you.
 
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aformeruser

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Well maybe they should sort the water out, it currently tastes disgusting when it comes out of taps across the country, and it has added stuff in it, not just H2O.

Move further to the North and West then. Tap water which has originated from the Lake District is almost as good as the bottled Buxton and Harrogate water.
 

GrimsbyPacer

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But I need the sugar, I would collapse without it, I have to get up at 4am everyday, and it's a huge boost that I need.

So the East Coast needs to be abandoned so people can have nice water?
 
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Steveman

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But I need the sugar, I would collapse without it, I have to get up at 4am everyday, and it's a huge boost that I need.

If you have to drink a "bucketful" of Lucozade every day to avoid collapsing you must have some medical problem because that is not in any way normal.
 
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