Xmas comes again for the wealthy - but for us, it's time to stand up for our due!

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07 April 2008

Since this Sunday, the bottom 10% rate of income tax is no more. The change was part of last year's budget, even though it was concealed behind a headline cut of the 22% tax rate down to 20%.

Taking into account changes in National Insurance Contributions introduced at the same time, wage earners on low incomes are the only ones to lose out. A single employee getting between £5,876 and £15,350 a year will be worse off. Brown has chosen to target the poorest, including most part-timers and those full-timers working a 40-hour week on less than 30% above the minimum wage.

By contrast, all those above this level get a 2p cut in their tax bill for every pound they earn above £15,350. But this 2% cut is peanuts for those of us who get it, compared with the fall in our standard of living over the past few years. Of course, it is a completely different matter for the wealthy: for many this cut is more than enough to buy themselves a second or third Ferrari!

In fact, Darling and Brown have chosen to turn this Sunday April 6th into a kind of second Xmas for big business. For the 3rd time since 1997, corporation tax is cut from 30% down to 28%! For the country's 100 richest companies alone, this means an additional £5bn over and above their already enormous net profits.

Shareholders and other capitalists have even more reason to rejoice. Ten years ago, Brown cut Capital Gains Tax (CGT - the tax on profits from stock market or property speculation) by creating a complicated relief system, which allowed the 40% CGT rate to come down to as little as 24% in some cases. Now, to "simplify" this system, all relief is replaced with a single rock-bottom 18% tax! Thanks to Brown's "Labour" government, it is now cheaper to make a living from any kind of dubious speculation than from honest, waged, labour!

Despite this reduced tax, however, there is still no question of subjecting these speculative profits - let alone dividends - to National Insurance Contributions. But why shouldn't speculators and shareholders pay their share in the funding of the welfare state, like the rest of us? All the more so, because if they were made to pay, the present slide into a "worsefare state" could be stopped and there would be no more justification for talking about postponing retirement age or keeping the state pension at its present ridiculous level!

In any case, at a time when bills and prices are going through the roof for working class families, these new handouts to the rich and attacks on the poorest can only bring the issue of wages back to the fore. And while this government is busy lining the wealthy's pockets, we can only count on our collective strength to reclaim the loss in our standard of living - in other words, our due!