Kwarteng scraps top 45% rate of income tax and cuts stamp duty

[muriel_volestrangler]

Cuts to the top rate of tax, national insurance, and stamp duty were announced by the government.

A 1p tax cut planned in the basic rate of income tax for 2024 will be brought forward to 2023, and the top rate of 45% is being scrapped, so the highest rate will be 40%.

A national insurance rise of 1.25% will be cancelled, saving households £330 a year.

Stamp duty thresholds will be increased, cutting the tax paid on purchasing homes. The £500,00 threshold will rise from £500,000 to £650,000. He said the cuts would be permanent.

https://www.theguardian.com/uk-news/2022/sep/23/kwasi-kwarteng-announces-sweeping-tax-cuts-in-mini-budget

So this is overwhelmingly aimed at the rich - it is roughly 1% of people in the UK (600,000 people) on the top 45% rate.

[Tetrachloride]

1. Kwasi Kwarteng: wiki

https://en.wikipedia.org/wiki/Kwasi_Kwarteng

[Eugene]

2. Pound sinks as investors question huge tax cuts

Pound sinks as investors question huge tax cuts

The Institute for Fiscal Studies (IFS), an economic think tank, said the market reaction was "worrying" as the government's new strategy relied on investors being willing to lend more to the UK.

"The plan seems to be to borrow large sums at increasingly expensive rates, put government debt on an unsustainable rising path, and hope that we get better growth," said IFS director Paul Johnson.

https://www.bbc.com/news/business-63009173

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Kwarteng accused of reckless mini-budget for the rich as pound crashes

Economic gamble of sweeping tax cuts leaves markets, opposition MPs, thinktanks and even Tories aghast

https://www.theguardian.com/uk-news/2022/sep/23/kwarteng-accused-of-reckless-mini-budget-for-the-rich-as-pound-crashes

[muriel_volestrangler]

3. Tory backbenchers despair at 'toxic' mini-budget

Kwasi Kwarteng’s mini-budget will prove “politically toxic and economically dubious”, Conservative MPs have said as they lambasted the extra £72bn of borrowing needed to pay for swingeing tax cuts that will disproportionately benefit the very wealthy.

The divisions of the Tory leadership campaign roared back to the fore after Kwarteng’s statement, with critics claiming the chancellor was trying to avoid scrutiny by refusing to publish economic forecasts from the independent budget regulator.

Kwarteng’s “plan for growth” was also compared by one senior party figure to the ill-fated “Barber budget” of 1972, which emulated a similar aim but ended in boom, soaring inflation and ultimately the demise of Ted Heath’s premiership.

“I’ve never known a government that has had so little support from its own backbenches, just four sitting days in,” observed one MP.

https://www.theguardian.com/uk-news/2022/sep/23/tory-backbenchers-despair-at-toxic-mini-budget