What intrigues me somewhat about this issue is that it was actually announced more than twelve months ago in last year�s budget. Now, two days after its introduction, we (allegedly) have MPs jumping up and down and threatening rebellion. The time for them to jump up and down was last year when they voted on the Finance Bill that followed the budget. Now is too late and their action smacks of posturing.
We mere mortals should not be at all surprised at the measure. The government�s argument is that �many� people will be better off when the effect of Tax Credits and benefits are taken into account. That�s because they would like all the electorate to become ever more dependent upon the state for their existence and consider that people who are simply trying to provide for themselves and their families (and so keep as much of their hard-earned as possible) are jeopardising that aim.
Someone working 40 hours per week for the National Minimum Wage of �5.52 will see their tax bill increase from �21.32 to �23.25 from this week. They will see a small reduction (of about 50p per week) in their NI contributions but overall they face an increase of some 9% in their deductions. Someone on a more modest income of �8,000 pa will see their tax bill increase by almost 50%.
Looking at linylou�s example, if she is not yet 65 and assuming she has the full State pension, then the tax bill on her �7,700 income will increase from �5.39 per week to �8.77 � an increase of some 62%. Meanwhile, of course (tax free) benefits rise in line with inflation.
Yes, there are winners and losers, but the losers in this instance can scarcely afford to lose a penny. MPs should have been up in arms on behalf of their low-income constituents last year. They were not, and that just about says everything there is to say about all of them of all parties.