United Kingdom: Tax punishment for the middle classes turns against the Sunak government | International
In its effort to appear a "compassionate conservatism" that would not leave behind the most vulnerable citizens in the face of the recession facing the United Kingdom, the Government of Rishi Sunak has awakened the ghost that terrifies any political party: the rage of the middle class . That middle class was fundamental to the success of Labor Party Tony Blair in the 1990s, and which he himself defined as "millions of people traditionally considered working class, but whose ambition is much higher than that of their parents or grandparents." The opposition, and several of Britain's leading think tanks, have accused Sunak and his Chancellor of the Exchequer, Jeremy Hunt, of dooming the demographic group that normally decides the outcome of elections to decades of lackluster well-being.
“[El plan fiscal del Gobierno] It will affect everyone, but the hardest hit will probably be for middle incomes. They will not benefit from the selective aid announced for the most vulnerable, their salaries will continue to fall and their taxes will rise. Middle-class England must brace itself for shock therapy,” said Paul Johnson, director of the prestigious Institute for Fiscal Studies (IFS). Analyzing the plans announced this Thursday by Minister Hunt to deal with a fiscal hole of more than 60,000 million euros, aimed at calming the markets and restoring the international credibility of the United Kingdom; The IFS accuses the Conservative Government of carrying on the backs of the citizens the consequences of a whole decade of erroneous economic decisions or those motivated more by ideology than pragmatism.
“We now have to pay the price for a long failed attempt to grow the economy, an aging population and very high levels of indebtedness. We have a hard, long and unpleasant journey ahead of us, which they have managed to make even worse by chasing [los conservadores] their own economic goals," Johnson said. And it included, when referring to these objectives, the cuts in health, education or public investment from the austerity years of David Cameron's Government, the poorly planned abandonment of the European Union by Boris Johnson, or the straw that broke the bank. glass: Liz Truss' irresponsible tax cut, which led to her resignation.
“It is not possible to raise 25,000 million pounds [más de 28.000 millones de euros al cambio actual] based on taxing a small group of people, the richest. I am quite transparent in that regard ”, Hunt tried to defend himself this Thursday on the BBC against accusations that he had decided to squeeze the middle class. The decision to lower the level of income from 150,000 pounds (about 170,000 euros) to 125,140 (143,000 euros) from which the maximum rate of 45% of personal income tax is paid will mean that some 350,000 taxpayers pay more. But it is, above all, the announcement that the exempt minimum will be frozen until 2028 both in income tax, inheritance tax or social security contributions, which will cause a much higher generalized tax pressure. Normally, this exempt minimum is updated with inflation, which in October was already at 11.1% in the United Kingdom. With an expected average wage increase in the private sector of around 6%, many workers will start paying the minimum rate of 20% when they exceed £12,570 per year. The Office for Budgetary Responsibility has put them at 2.6 million. And many more - the IFS calculates that they can be eight million - will go on to pay 40% when they exceed the threshold of 50,000 pounds.
A future of hardships
The mortgages for the future contained in the Sunak government's fiscal plan will mean a permanent blow of 3.7% to the finances of a middle-class family, after more than a decade of stagnant wages, the center of Thought Resolution Foundation. The cuts decided by Sunak and Hunt in direct aid to households for the payment of gas and electricity bills will mean that more than three million families (3.3) end up paying 2,300 euros more next year to heat their households. “As an energy importing country, during a crisis like the current one, the UK is becoming poorer. It was in the hands of the Minister of Economy to decide how that was distributed. And he has decided that families pay more expensive energy bills, higher taxes and worse public services than expected. Adopting these measures may have been hard, but what is really hard will be the cost of living for citizens for years to come,” said James Smith, the organization's Director of Studies.
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The Labor opposition, for which the polls predict success at the polls within two years, suspects that the Sunak government has decided to commit most of the cuts for after 2024, to transfer to a new Parliament and a new Executive the most unpopular measures. “After having done enormous damage to our economy, they have decided to now attack the workers, with a series of invisible taxes [así se denomina el efecto congelar el mínimo exento] and local tax increases, while they do not modify, for example, tax exemptions for non-residents. The richest, the super-rich, do not pay taxes in this country," denounced Labor leader Keir Starmer.
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