Former Bank of England chief economist Andy Haldane told the BBC's Sunday with Laura Kuenssberg programme this was "the single biggest reason why [economic] growth has flatlined". In response, Alexander said there was always speculation in the run-up to Budgets but the chancellor had been clear about her priorities. Chancellor Rachel Reeves is widely expected to increase taxes in her Budget on Wednesday to help fill a multibillion-pound gap in her spending plans.
Stamp duty is a way to siphon off some of the gains when a property transaction goes through. Capital gains tax allows the state to take a slice of wealth after a sale. Never mind that both taxes deter people from buying and selling. It allows everyone to avoid the clearer, fairer annual tax on wealth that many economists support.
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In April 1975, the Labour chancellor Denis Healey sought to grip the UK's runaway inflation and rising unemployment rates an economic crisis triggered by the shock rise in global oil prices by raising the basic rate of income tax. Now Rachel Reeves, faced with her own set of difficult economic circumstances, including a multi-billion-pound budget shortfall, is contemplating the same remedy breaking a 50-year taboo by becoming the first chancellor since Healey to hike the basic rate of income tax.
In a report that will be closely scrutinised in the Treasury, it said an additional 6bn a year could be raised through a policy to cut employee national insurance by 2p, with a corresponding increase for all income tax bands. This is because income tax applies to a wider group of taxpayers than employee national insurance including pensioners, landlords and self-employed people.
Retirees need to stay informed about income taxes, as the potential threat of enforced tax collection has decreased, allowing current tax brackets to remain stable.
