Monday, 19 March 2007
Well I know the budget is only on Wednesday, but I thought it may be a discussion worth having to see what are the treats that Gordon Brown has in store for us tax payers.
At times such as this we need to turn to tax accountants and economists, who have so much skin in the game for a decent look at the prospects for the budget given current economic conditions.
I start with the E&Y view, two horrid ideas here. One is actually extending the reach of Inheritance tax (rather counter to the views of Nick Drew). This is as always a nice socialist and regressive tax.
The second key idea is a new 'planning gain' tax. This is a tax on property where the planing permission has been changed. As such it is a tax on future development. This will utterly stymie the small property developers in favour of large ones. it is also an extra tax as large developers already sign bribes in the form of section 106 (e.g. you can build houses but must pay for a bypass too etc.)
KPMG's view on the state of the economy is as follows:
"There will be questions about the next cycle however. Since the early 2000s, public spending has risen at a much faster rate than the economy as a whole. But without higher taxes, this leeway has been used up, particularly now that public debt has risen to within a few percentage points of its 40 percent of GDP ceiling.
Consequently total public spending growth is slated to slow sharply over the next four years, to below the rate of growth of the economy. Education is expected to be a priority although we will probably have to wait for the Comprehensive Spending Review in the summer for full details of the allocations to health, alleviation of child poverty, etc.
Even this projected squeeze on spending still leaves the public finances looking tight and although there is no immediate need to raise taxes, equally there is no scope to cut them."
PWC have a great predictions website, two of their highlights are the possibility of further green taxes on cars and new taxes for carbon consumption. The Chancellor knows a helpful bandwagon when he sees on.
Finally, Deloitte's Roger Bootle is quite scathing about the state of the economy. he is brave enough to state that the real GDP deficit is more like 90% rather than the 37% the Chancellor fictitiously maintains and also notes taxes need to rise by £10 billion.
So what do you think? My prediction is for more stealth taxes as the Chancellor needs a war chest. He can't go and become PM without any money for baubles to offer. So he will store them up now and try to hide behind all the other mess that Blair and crew are creating.
Mostly, we will be poorer by Friday.
Posted by CityUnslicker