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Johnson Proposes 10 Billion-Pound Tax Cut To Shore Up British Working-Class Support

Courtesy of ZeroHedge View original post here.

As the Tories scramble to stitch up what's expected to be a first-place finish in the upcoming UK election, Boris Johnson is taking on Labour where it counts: With payroll tax cuts that will help to roll back the Tory's reputation for austerity.

Reuters reports that Johnson has raised the possibility of a multi-billion-pound cut to the payroll tax revenues. The PM reportedly promised to increase the amount of earnings that would be exempt from taxes should he return as PM.  On Wednesday, Johnson said he would bring the National Insurance threshold in line with the income tax levels if he won.

Presently, workers pay National Insurance contributions on annual earnings over 8,632 pounds, less than the 12,000-pound threshold at which workers start to owe income tax.

"We’re going to be cutting National Insurance up to 12,000," Johnson said in response to a question during a campaign event in northeast England about how he would help the average wage earner.

If implemented, Johnson's tax cut would give workers earning more than the threshold an extra £404 pounds a year.

A study by the Institute for Fiscal Studies found earlier this year that every £1,000 increase in the NIC threshold would cost roughly £3 billion, meaning Johnson's tax cuts could come with a £10 billion price tag.

Furthermore, the IFS ruled that these types of cuts wouldn't do much to benefit the most needy workers because the lowest-paid workers wouldn't benefit much (most of the benefits for increases in the threshold accrue to better-paid workers).

The Conservatives haven't yet released their full policy platform for next month's vote, which was called to break a deadlock over the withdrawal agreement Johnson's team negotiated with Brussels (which isn't much different from the deal negotiated by Theresa May's team).

But with Labour Leader Jeremy Corbyn pursuing the most far-left agenda in years – offering to dramatically boost spending on public-welfare programs and housing while expanding the rights of immigrants to live, vote and work in the UK – Johnson has been forced to offer the people a little extra something.

And it looks like that will come in the form of having more money in their pockets. Labour, meanwhile, is still finishing work on its own election platform. 

 


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