UK cuts tax rate for wealthy
Source: Agencies |
March 22, 2012, Thursday
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Print Edition
Print Edition
BRITAIN'S finance minister has cut the rate of tax the country's wealthiest citizens will pay but insisted the rich will pay more via a raft of tax avoidance measures and a punitive new charge on expensive property sales.
In his annual budget statement yesterday, George Osborne said he was cutting the top rate from 50 percent to 45 percent by April next year on incomes over 150,000 pounds (US$239,000) a year. He argued that the original higher rate did not yield as much as expected - partly because the rich were able to avoid tax.
Osborne also sought to deflect any criticism that any largesse was confined to the wealthy by announcing a big hike in the level that individuals start paying tax to 9,205 pounds.
"Together, the British people will share in the effort and share the rewards," Osborne said at the conclusion of his hour-long statement.
The 50 percent tax rate was introduced by the previous Labour government in response to the sharp deterioration in the country's public finances in the wake of a banking crisis that led to the UK's deepest recession since World War II.
Osborne insisted that the rich should pay a bigger proportion of their income than the poor and said he was offsetting the cut in the top rate by other taxes on wealth, including a new 7 percent stamp duty on the sale of houses valued over 2 million pounds, up from 5 percent.
Most of those are primarily located in London, which has been the favored second home of choice for many of the world's super-rich - many Russian oligarchs and hedge fund managers have all converged on the capital, driving up the cost of homes to levels that are unaffordable to the vast majority of Londoners.
Overall, the budget measures were broadly neutral - Osborne has little room for maneuver, given the government's primary plan to cut borrowing.
In his annual budget statement yesterday, George Osborne said he was cutting the top rate from 50 percent to 45 percent by April next year on incomes over 150,000 pounds (US$239,000) a year. He argued that the original higher rate did not yield as much as expected - partly because the rich were able to avoid tax.
Osborne also sought to deflect any criticism that any largesse was confined to the wealthy by announcing a big hike in the level that individuals start paying tax to 9,205 pounds.
"Together, the British people will share in the effort and share the rewards," Osborne said at the conclusion of his hour-long statement.
The 50 percent tax rate was introduced by the previous Labour government in response to the sharp deterioration in the country's public finances in the wake of a banking crisis that led to the UK's deepest recession since World War II.
Osborne insisted that the rich should pay a bigger proportion of their income than the poor and said he was offsetting the cut in the top rate by other taxes on wealth, including a new 7 percent stamp duty on the sale of houses valued over 2 million pounds, up from 5 percent.
Most of those are primarily located in London, which has been the favored second home of choice for many of the world's super-rich - many Russian oligarchs and hedge fund managers have all converged on the capital, driving up the cost of homes to levels that are unaffordable to the vast majority of Londoners.
Overall, the budget measures were broadly neutral - Osborne has little room for maneuver, given the government's primary plan to cut borrowing.
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