Brown's £14.8 billion tax grab
Posted by Ian at 8 18 PM on Saturday, September 19
GORDON Brown is secretly planning a thumping 3p hike in income tax to claw in an extra £14.8BILLION.
Leaked Treasury documents show the government’s tax grab will cost the average family an extra £2,770 a year in tax by the year 2013.
The confidential files are revealed just days after the Conservatives disclosed government plans for a staggering 9.3 per cent cut in public spending.
Now Tories claim that in the next four years income tax receipts will rise by 32.5 per cent.
New data obtained by the News of the World also reveals Mr Brown needs to find £140bn to plug the black hole in public finances. But his private Cabinet talks have only identified minor spending cuts of £15bn.
The PM has over-ruled ideas to slash the defence budget, scrap ID cards and cut tax credits — so the axe will fall on higher education and rural development instead.
Even after the top rate of tax is raised to 50p as planned next year, and if the economy recovers, the Treasury still intends to rake in an extra £14.8bn.
That’s equivalent to 3p in the £ on the base income tax rate.
By 2011-12 the Treasury predicts it will collect £161.5bn from income tax, an increase of 11.6 per cent — way above what is possible to achieve through economic growth.
The huge tax rise is necessary because vast amounts of government cash will be swallowed up to pay Britain’s ballooning national debt.
Tory Shadow Chancellor George Osborne said: “Labour’s secret spending plans appear to reveal an income tax bombshell.
“Income tax receipts are set to rise by a third. Are they asking us to believe that this is due only to recovery from recession and the 50p rate? Hard-working families are having to pay a heavy price for Labour’s economic incompetence.
“The tragedy is so much of the money will be spent on the bills of social failure like the cost of unemployment and paying the interest on our debt.” The Tories have also been considering an income tax rise of 2p in the £ but intended to scrap the increase after four years.
Last night the government mounted a desperate counter-attack with ministers claiming the economy will bounce back quickly, making further tax rises unnecessary .
However, they refused to rule out any increases in income tax.
Chief Secretary to the Treasury Liam Byrne said: “Osborne’s claims are false. These government tax projections simply set out what is raised by our existing published measures as the economy returns to growth.”