UK Budget: Tax rate lowered for rich
The Chancellor of the Exchequer George Osborne with the Budget box stands with his Treasury team Financial Secretary to the Treasury Mark Hoban, Chief Secretary to the Treasury Danny Alexander, Economic Secretary to the Treasury Chloe Smith, Exchequer Secretary to the Treasury David Gauke and Commercial Secretary to the Treasury Lord Sassoon on March 21, 2012 in London, England.
George Osborne, the UK's Chancellor of the Exchequer, announced the budget for the next fiscal year today, with cuts to the top rate of income tax and an increase in the amount that people can earn before they start paying taxes, according to the BBC.
Labor leader Ed Miliband called the budget a "millionaires' budget" after it was confirmed that the tax rate for the top income tier (those earning above £150,000) would be cut from 50 pence on the pound to 45 pence in 2013, according to the Guardian.
The amount of income an individual could earn before having to pay taxes was increased to £9,205 ($14,500), benefiting working people, said the Associated Press. The measure will reportedly cost the Treasury £3.3 billion ($5.3 billion) in 2013-14. Around 300,000 more people will be drawn into the higher income bracket, under the new tax measures.
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Child benefit cuts would be phased in for those earning more than £50,000, Osborne said. Only those earning more than £60,000 would lose all their child benefits. "This means an extra 750,000 families will keep some or all of their child benefit. 90 percent of all families will remain eligible for child benefit," he said, according to Reuters.
The Guardian reported that Osborne also introduced tax measures aimed at the rich, including a seven percent duty rate for properties worth more than £2 million and a limit on the tax allowances top earners could claim, in order to compensate for the politically controversial decision to cut the tax rate for top income earners.
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Osborne defended the tax rate cut, saying it had encouraged tax avoidance. "It raises at most a fraction of what we were told, and it may raise nothing at all." He said the rich would now pay five times more in taxes, with all the measures implemented together, according to the Guardian.
At the end of his statement, Osborne said, "Together, the British people will share in the effort and share the rewards. This country borrowed its way into trouble, now we're going to earn our way out," according to the AP.
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