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PC: Tory Budget
#1
Since the Government decided to 'drop the mic' in the House of Commons and Harold didn't get a chance to actually deliver a reply, the Conservative Party is now prepared to present its budget vision.  I apologize if this isn't quite a full Budget Speech, but we have included more detailed proposals in the rather thick handouts.  Subject to elaboration, unlike Labour's stunt budget we actually intend to implement this budget promptly upon election.

Let's start with tax.  First and foremost, we're raising the Personal Allowance from £12,500...its current level...to £16,000.  That, right there, is £700 per year to the average working man or woman in Britain.  The Higher Rate threshold will be raised in line with inflation, so £50,000 to £50,700.  The Top Rate will be held steady at £150,000.

Next, rather than executing a merger between the income tax and National Insurance, we're going to instead seek to harmonize the lower National Insurance threshold and the Personal Allowance for the income tax.  Thus the lower threshold will be raised from £166 to £308, exempting roughly £7,400 per year...I get £7,384...from that tax as well.  That is another roughly £886 per year in income in the pocket of the average working man or woman, bringing the total savings in this budget for the average British worker to just a shade less than £1,600/year.

There is, of course, a cost to be had here: The Additional Rate for NICs will be set at 12%, in line with the standard Employee Rate, up from 2%.  This places no additional tax burden for anyone earning less than £50,700  Some rough back-of-the-envelope math suggests that the break-even point for this will be approximately £67,000...just under two and a half times the average worker's wage.  Put slightly differently, a two-income household earning £100,000 should see no increase in tax.

On the employer's side of things, we intend several additional assessments:
-We will proceed with a 5% Employer-side surcharge on pay over £150k/yr.  We estimate that this will raise approximately £3.2bn/year at present; we also intend to tie this rate to the current Top Rate of income tax so that should said rate be adjusted for inflation it will as well.
-We will also proceed with a 50% Employer-side Surcharge on compensation, including stock options and so on, exceeding 50 times average company wages.  At the moment we are awaiting more detailed estimates, but we estimate that this will raise another £1.25bn per year.
-We will require the matching of share buybacks with mandatory employee bonuses with supplementary legislation.
-Finally, we will implement a lower rate of 2.5%, company-side, on wages below the Lower Threshold for companies with more than 100 full-time equivalent employees.  To be perfectly frank, this is directed at a mixture of gig economy companies which are paying little or no NICs for their workers and large companies using large amounts of part-time labor and thereby paying little to no NI on a disproportionate share of their workforce.  In order to offset the impact of this, we will be using at least half of the revenue from this to subsidize a reduction in Business Rates.  We are, again, waiting on exact estimates.

Moving on, as to investment income we will do the following:
We will abolish capital gains taxes, full stop.

We will abolish the taxation of dividends and interest on basic rate taxpayers, full stop.

These tax reductions will be of great benefit to pensioners, in particular, but they will represent a significant savings to all those who seek to save and plan for their future.

On indirect taxes, we do the following:
-Hold wine duty steady next year, and reduce beer duty from £0.33 to £0.30 and spirits duty from £13.75 to £13.00.
-Raise the tax on tobacco from £2.20 to £2.25 per pack of 20.
-Increase fuel duty from £0.51 to £0.55.
-Increase vehicle excise duty from £225 to £250, but exempt alternative fuel vehicles from vehicle excise duty and assess VAT on the sale of alternative fuel vehicles at the Lower Rate.  We estimate the cost of this latter move at £500 million.*
-We plan to reform Air Passenger Duty in line with my speech of several weeks ago, but will implement those changes in separate legislation.

Moving on, we implement the first year of our manifesto pledges:
-We hire 7,000 new police towards our stated goal of 20,000 over three years.
-We hire an additional roughly 700 Border Force officers, towards the goal of 2,000.  This can be found under "Other Police", for reference.
-We add 2,800 prison places towards our goal of 10,000 extra spaces; and hire 2,600 staff towards our goal of 15,000.

At the NHS, we hire an additional 1,000 doctors and 8,200 nurses towards our goals; we would hire faster, but due to training requirements we consider ourselves constrained by practicalities.  We will also work to ensure that properly-trained immigrant doctors can achieve certification, particularly in the event that their home country circumstances are dysfunctional in terms of relaying records.

We provide £1bn per year towards additional mental health support and £1bn per year towards community care, again in line with our manifesto; we initiate the construction of five new hospitals in line with our pledge of 40 over a decade; and we offer an additional £2.5bn in line with our spending pledges, to be allocated in consultation with the NHS.

We will also abolish prescription charges.  This will be accompanied by the Health Secretary initiating guidance on prescription practices to avoid any sudden rush to over-prescribe medication.  It is my view, in particular, that per-script charges miss the mark slightly, landing on individuals with complex health situations or faced with messy cocktails of drugs...often those who can least afford even nominal charges.  Guidance regarding prescriptions seems to be a more reasonable way to achieve the stated policy goal here.

Under Education, the Education Secretary will be provided with an additional £3.5bn/year starting this year for investment.

Finally, back to Economic Affairs we will provide an additional £1.5bn for Transport to begin the process of bidding out and planning for both the proposed HSR connections for Heathrow and Gatwick and the conventional rail improvements for Heathrow, and for the expansion of ferry services in the Irish Sea and across the English Channel.  Again, announcements for details will come in time.

We will, upon Brexit, have additional provisions for business loan facilities and business support.  The nature of such support depends on the Brexit we get, and so we cannot responsibly cost that at this time.

This budget provides for Britain.  This budget stands up for the average British worker and puts money in his pocket, it responsibly manages the deficit, and it provides for much-needed investment across the board.



[Note: The following items are not in the pack itself due to technical limitations:
Tax:
-5% NIC Employer-side Surcharge on pay over £150k/yr: £3,200m in revenue (per manual estimates from the pack...I found about £640m/yr per 1% at the relevant income level (£2800/week)
-50% Employer-side Surcharge on compensation exceeding 50x average company wages: £1,250m in revenue (based on going with a relevant NIC assessment; it is presumed that pulling in stock options, etc. will generate additional revenue but that this will trail off).
-Employer-side NIC Assessment on lower-end wages (to offset widespread use of part-time labor): £3,000-6,000m/yr; half to go to a reduction in Business Rates.
-Exemption of Basic Rate Dividends: Unknown
-Lower Rate VAT on AFVs: £504m/yr based on 15% of the sale price (20%-5%) of an average new car (roughly £20,000) with 7% of the market affected (2019 market share was 7.3%).
Total tax impact: Deficit Reduced by £5,400-6,900 less Basic Rate Dividends.

Spending:
-£2.5bn in additional Health spending.
-£1.5bn in additional Transport spending (directed at a mix of the Heathwick/HS4Air proposals, the Heathrow Access proposals, and the ferries).
-£3.5bn in additional Education spending.
Total Spend Impact: Deficit Increased by £7,500

Net impact of footnote items should be close to neutral/no more than about a £1-2bn increase of the deficit.]

(File Attached)


Attached Files
.xlsx   2019 Tory Budget Pack.xlsx (Size: 195.76 KB / Downloads: 23)
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#2
This was the big election stinker. People in the UK have had a decade of tax cuts being prioritised over public service investments, and these tax cuts don't go far in winning over the voters you were targeting while there were only piecemeal spending commitments made. Public service investment and money handed towards pensioners was all put under question and doubt. People who know me know I'm a big believer in PolUK players being able to shape consensus and shift it away from irl, but you went into this election throwing this bomb to the electorate without laying any foundation for the public to be perceptive to these kinds of policies.

The sad thing is, this is very much a budget that could be pitched to Toryville suburbia - but they'd have been alienated by all the specific tax rises in the process, alongside your general Brexity-ness.
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