ConDem recovery plan: tax cuts for the well-off

Life is full of little surprises.

Surprise number one is that despite repeated denials, the bulk of lobby journalists have received informal briefings that treasury officials are "drawing up plans" to cut the 50p tax rate. Surprise number two is that senior Liberal Democrats will not be opposing the move provided that tax cuts for the richest are “offset by other measures” – or something equally mealy-mouthed in nature.

The somewhat insulting ‘rationale’ offered up as justification to us lesser-off proles is an analysis which suggests the extra revenue generated between the 45p and 50p tax bands raises as little as £750m. Of course, this does not take into account that people on higher incomes are more likely to have accountants with expertise in tax avoidance. Nor does it factor in an incontrovertible truth that HMRC is now less able to pursue the loophole-exploiting merchants thanks to successive staffing cuts and other 'efficiency savings' imposed by the ConDem coalition.

The Independent reckons that the Conservative-driven plan will prove “controversial” at a time of severe cuts to public-sector jobs and services. We suspect that this might well be an understatement.

Update: Interesting points raised by A Change of Personnel - among which is the question as to who is responsible for running the country this week.