Progressive seems to be the new buzz word in politics so it is no surprise that both the Tories and Lib Dems were keen to call last weeks budget a progressive one but the reality is that this budget is far from progressive.
Personally I earn more than the national average, I have no dependants and don’t receive any tax credits. You would imagine that a “tough but fair” budget where everyone “shares the pain” would mean that someone like me would therefore be facing a higher tax bill this week. However, the reality bizarrely is actually the opposite. By raising the threshold for paying income tax Mr. Osbourne gifted me £200. Factoring in the 1% rise in national insurance that Labour announced and the new government is keeping I am likely to be taking home just £86 of this (less than you may imagine as they are also intending to raise the threshold in line with the income tax threshold). Sure with the VAT increase I am likely to be shelling out an extra £190 in tax when I buy things but the freezing of council tax for two years will mean that in real terms I will be paying under £100 more tax a year in the future.
This does not seem right that an above average earner is facing such a small increase from a “progressive budget”.
The part I find particularly annoying is that those that will be hit hardest are the poorest in society. The government loves to talk about the income tax threshold helping the poorest people in society but sadly this just isn’t true. It helps the people that are on low to middle incomes. The poorest people in our society are those people that don’t earn over £6,000 but instead rely on hand outs from the government. By cutting things like housing benefit and reviewing disability allowances as well as increasing regressive taxes like VAT it is these people that will find themselves worse off this week.
Mr. Osbourne, please stop lying to us, this is not a progressive budget.