The solution might have been found if, a year ago, Westminster had reversed the cuts on the
higher rate of income tax and abandoned plans to cut corporation tax.
5% each and increasing the point where a person starts paying the
higher rate of income tax from [euro]33,800 to [euro]34,600 will cost almost [euro]300million.
In his annual budget on Wednesday, Osborne cut corporation and capital gains taxes and lifted the earnings threshold at which the
higher rate of income tax is payable while warning the economy would grow more slowly than previously forecast.
25,000 individuals will no longer pay the
higher rate of income tax compared to 2015-16.
Dividends are drawn from a company's 'distributable reserves,' which are made up of current operating profits and other money in the bank, and are a more tax-efficient way for most company owners to draw an income from their firms than taking a simple salary, which attracts a
higher rate of income tax.
She would cut middle class benefits, such as the threshold for paying the
higher rate of income tax, to offset the tax credit cuts.
They pledge not to raise the basic or
higher rate of income tax, National Insurance or VAT.
These include more spending on infrastructure projects, lowering energy prices and supporting on the so-called "squeezed middle" by ensuring fewer pay the
higher rate of income tax.
And Tory backbenchers in the Free Enterprise Group, led by Dominic Raab, want relief for the middle classes suggesting, amongst other things, abolition of stamp duty on homes worth less than [pounds sterling]500,000 and an increase in the
higher rate of income tax to [pounds sterling]50,000.
But attention has also focused on a series of measures which were less well publicised by the Chancellor, including: Lowering the threshold for the 40p
higher rate of income tax, bringing up to 1.
Chancellor George Osborne rowed back on controversial plans to scrap child benefit for all households where one parent earns enough to pay the 40 per cent
higher rate of income tax, following complaints - including from Conservative backbenchers - that it would hit families in the "squeezed middle".
George Osborne rowed back on controversial plans to scrap child benefit for all households where one parent earns enough to pay the 40%
higher rate of income tax, following complaints that it would hit families in the "squeezed middle".
