UK Budget 2016

Looking at the main points of the UK 2016 budget, I'm pleased that the Chancellor is cutting spending, but I'm not happy about where he's cutting it. Here are some comments on the specific items:

  • Abolition of Class 2 National Insurance contributions. Good. National Insurance is a regressive tax, and should be abolished entirely.
  • The threshold at which people pay 40% income tax will rise from £42,385 to £45,000 in April 2017. Bad. If there's money to spare for tax cuts it should be used to cut the taxes of the poor.
  • Tax-free personal allowance to rise from £11,000 to £11,500. Good. This is cutting taxes for the poor, which tackles inequality.
  • Capital Gains Tax to be cut. Neither. Capital Gains should be taxed at exactly the same rate as income.
  • Annual Isa limit to rise from £15,240 to £20,000. Bad. ISAs should be abolished. They're bureaucratic and the money should instead go to abolishing taxes on the poor.
  • New "lifetime" Isa for the under-40s. Bad. As above.
  • New state-backed savings scheme. Bad. As above.

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