Archive for the ‘Deferred Taxation’ Category

Deferred Taxation

Dimanche, juin 6th, 2010

David Laws, before his unfortunate and forced resignation as the treasury chief secretary, put it very succinctly with his confident command of financial affairs in stating that government borrowing is effectively only deferred taxation.
It is on the tax front then where Conservative voters have been disappointed that a pre-election pledge to provide more generous Inheritance Tax allowances has now been withdrawn. Indeed the government is also bringing Capital Gains Tax into line with Income Tax, although the annual exempt allowance will apparently not be cut and the new rate is not likely to exceed 40%, even for 50% tax payers. This is the result of a policy compromise between the Tory right and the Liberal Democrat left, which includes Vince Cable the business secretary; however, it also reflects the grim reality of the government’s empty coffers.
Otherwise it would appear that the tactic to keep the coalition together is to not try and reach a compromise on every issue when each side could end up dissatisfied. Thus the Conservatives have kept the major part of their tougher policies on immigration and Europe, whilst the Liberal Democrats have their way on voting reform if MPs approve a referendum on this, as well as their zero tax band on the first £10,000 of earned income (which also suits the progressive Conservative approach to the less well-off, even in times of austerity).