A report from the Resolution Foundation has estimated that the UK Chancellor’s raising of the higher rate income tax threshold in this year’s budget will boost incomes for higher rate taxpayers by £200 per year.
At the same time, his increase in the personal tax allowance will raise incomes for basic rate taxpayers by just £60 per year.
When you look at the changes by distribution of household income, these inequalities are even more stark, with the poorest 10% of UK households receiving less than £10 per year extra, while the richest 10% (myself included) will receive an average of around £270 per year extra.
But it gets worse.
When you take into account other changes to benefits and taxes, the Resolution Foundation calculate that by 2020-21, households in the bottom half of the income distribution will be £375 worse off, while those in the top half will be £235 better off.
How can this be right?
Having had a few days now to reflect on this budget, I am appalled by the preferential treatment of the rich:
- As a high earner with a secure job, I will gain by an extra £2,615 of my salary being taxed at a lower rate;
- As someone who can afford to save, I could invest in shares and pay less tax when I sell those shares for a profit;
- I could give up to £4,000 per year to each of my children to put into a new lifetime ISA, to which the government will add £1 of tax payers’ money to every £4 they save;
- When Esther and Joe move away from home later this year, we could rent out the extra rooms through AirBnB and earn up to £1,000 per year tax-free.
Meanwhile, the chancellor has announced that he will cut £4.4 billion from benefits for disabled people. Apparently this means that 200,000 disabled people who are dependent on personal independence payments for help in personal care will lose out on these benefits, while a further 400,000 will see them cut.
If the health of our nation is measured, even in part, by how we treat the poorest and most vulnerable of our neighbours, it seems to me that we are sadly lacking at present.
But let justice roll on like a river,
righteousness like a never-failing stream!