15 March 2010

Gordon Brown's 2007 Budget Analysis, Left Foot Forward Style

In the Budget of 2007, the Chancellor Gordon Brown announced to much fanfare that the basic rate of tax would be cut by 2p from 22% to 20%. This policy was great news for taxpayers! Earners received a tax cut of up to £647.

This tax cut was largely paid for by scrapping the 10p tax rate, which hit the lowest earners. But this is immaterial - since the 2p tax cut is worth £8bn, the policy should be looked at on its own merits.

We can therefore conclude that the 2007 Budget was hugely beneficial for the majority of taxpayers, and if we ignore those who suffered, there were no regressive outcomes.

Ta da!

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