Best of the Week
Most Popular
1.Bitcoin War Begins – Bitcoin Cash Rises 50% While Bitcoin Drops $1,000 In 24 Hours - Jeff_Berwick
2.Fragile Stock Market Bull in a China Shop -James_Quinn
3.Sheffield Leafy Suburbs Tree Felling's Triggering House Prices CRASH! - Nadeem_Walayat
4.Bank of England Hikes UK Interest Rates 100%, Reversing BREXIT PANIC Cut! - Nadeem_Walayat
5.Government Finances and Gold - Cautionary Tale told in Four Charts - Michael_J_Kosares
6.Gold Stocks Winter Rally - Zeal_LLC
7.The Stock Market- From Here to Infinity? - Plunger
8.Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - MarketsToday
9.Electronic Gold: The Deep State’s Corrupt Threat to Human Prosperity and Freedom - Stewart_Dougherty
10.Finally, The Fall Of The House Of Saud - Jim_Willie_CB
Last 7 days
Learning from Money Supply of the 1980s: The Power and Irony of “MDuh” - 20th Nov 17
Trump’s Asia Strategy, Goals and Realities - 20th Nov 17
Crude Oil – General Market Link - 20th Nov 17
Bitcoin Price Blasts Through $8,000… In Zimbabwe Tops $13,500 As Mugabe Regime Crumbles - 20th Nov 17
Stock Market More Correction Ahead? - 19th Nov 17
Universal Credits Christmas Scrooge Nightmare for Weekly Pay Recipients - 18th Nov 17
Perspective on the Gold/Oil Ratio, Macro Fundamentals and a Gold Sector Bottom - 18th Nov 17
Facebook Traders: Tech Giant + Technical Analysis = Thumbs Up - 18th Nov 17
Games Betting System For NCAA Basketball Sports Betting - Know Your Betting Limits - 18th Nov 17
Universal Credit Doomsday for Tax Credits Cash ISA Savers, Here's What to Do - 18th Nov 17
Gold Mining Stocks Fundamentals Q3 2017 - 17th Nov 17
The Social Security Inflation Lag Calendar - Partial Indexing - 17th Nov 17
Mystery of Inflation and Gold - 17th Nov 17
Stock Market Ready To Pull The Rug Out From Under You! - 17th Nov 17
Crude Oil – Gold Link in November 2017 - 17th Nov 17
Play Free Online Games and Save Money Free Virtual Online Games - 17th Nov 17
Stock Market Crash Omens & Predictions: Another Day Another Lie - 16th Nov 17
Deepening Crisis In Hyper-inflationary Venezuela and Zimbabwe - 16th Nov 17
Announcing Free Trader's Workshop: Battle-Tested Tools to Boost Your Trading Confidence - 16th Nov 17
Instructions to Stop a Dispossession Home Sale and How to Purchase Astutely at Abandonment Home - 16th Nov 17
Trump’s Asia Tour: From Old Conflicts to New Prospects - 16th Nov 17
Bonds And Stocks Will Crash Together In The Next Crisis (Meanwhile, Bond Yields Are Going Up) - 16th Nov 17
A Generational Reset That Will Redistribute Wealth to the Bottom 60% Is Near - 16th Nov 17
Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - 16th Nov 17
Gold’s Long-term Analogies - 16th Nov 17
Does Stripping Streets of ALL of their Trees Impact House Prices (Sheffield Example)? - 15th Nov 17
The Trump Administration’s IP Battle Against China - 15th Nov 17
5 Ways Bitcoin can Improve its Odds of Becoming the Future of Money - 15th Nov 17
These Headlines Say Gold is Building a Base for Something Big - 15th Nov 17
Protect Your Savings With Gold: ECB Propose End To Deposit Protection - 14th Nov 17
Gold on the Ledge, Trend Forecast - 14th Nov 17
The Unbearable Slowness Of Fourth Turnings - 14th Nov 17
Silver Sign’s Confirmation & More - 14th Nov 17
Could This Be The End for Tesla? - 14th Nov 17
Harry Dent’s Fourth Cycle: More Evidence of Stock Market Downturn - 14th Nov 17
Why Having Good Credit Is Important If You Want to Invest - 14th Nov 17

Market Oracle FREE Newsletter

Traders Workshop

UK General Election Forecast 2015 - Cameron Tory Tax Cut Fact Check

ElectionOracle / UK General Election Oct 06, 2014 - 06:58 AM GMT

By: Nadeem_Walayat

ElectionOracle

The big election bribe news out of the recent party conferences was David Cameron's promise / voter bribe to substantially raise both the starting and higher rate tax bands that the mainstream media uniformly costed at £7 billion to be added to Britain’s black hole (budget deficit of £95 billion per year).

I can tell you now that a future Conservative Government will raise the tax-free personal allowance from £10,500 to £12,500.

That will take 1 million more of the lowest paid workers out of income tax – and will give a tax cut to 30 million more.


So with us, if you work 30 hours a week on minimum wage, you will pay no income tax at all. Nothing. Zero. Zilch.

The 40p tax rate was only supposed to be paid by the most well-off people in our country...

...but in the past couple of decades, far too many have been dragged into it: teachers, police officers.

So let me tell you this today.

I want to take action that’s long overdue, and bring back some fairness to tax.

With a Conservative government, we will raise the threshold at which people pay the 40p rate.

It’s currently £41,900…

…in the next Parliament we will raise it to £50,000.

So here’s our commitment to the British people:

No income tax if you are on Minimum Wage.

A 12 and a half thousand pound tax-free personal allowance for millions of hard-working people.

And you only pay 40p tax when you earn £50,000.

The specifics of David Cameron's promise / voter bribe are -

1. To raise the minimum starting rate of tax from the current £10k to £12.5k.

2. To raise the 40% tax band from £41,865 to £50,000.

3. That these are to be achieved by the end of the next parliament.

Tax Cut Fact Check.

The key point is that the tax cuts are expected to be implemented by the END of the next parliament, that's 5 YEARS from May 2015 or May 2020. So that is 6 YEARS of indexation for inflation to apply against the proposed tax cuts which at an average probable inflation rate of 2.5% would convert into an indexation of 16% which means -

1. Starting Rate of Tax

That by 2020 the tax band would already be set to rise to approx £11,517, therefore the actual tax band increase would be nearer £903 rather than the £2,500 that propaganda suggests which at 20% would translate into a tax cut of £160 per year (by 2020) rather than the £500 implied.

2. 40% Tax Band

That by 2020 the 40% tax band would already be set to rise from £41,865 to approx £48,591, therefore the actual tax band increase would be nearer to £1400 than the £8,100 propaganda suggests which at 40% would translate into a tax cut of £563 per year (by 2020) rather than £3,240 implied.

The net effect of these much smaller than publicised actual tax cuts would be an extra cost of just £1.2 billion per year rather than the £7 billion that the mainstream press is regurgitating at length which begs the question why are journalists so dumb ? Why run around like headless chickens without checking the facts!

UK General Election Forecast

My long-standing forecast for the outcome of the next general election is as excerpted below -

30 Dec 2013 - UK House Prices Forecast 2014 to 2018, Inflation, Trend Trajectory and General Election 2015

In conclusion a May 2015 general election at an average house price inflation rate of 8.5% would result in a Conservative overall majority of at least 30 seats. Therefore this is my minimum expectation as I expect UK house prices to start to average 10% per annum from early 2014 with my actual forecast converging towards average UK house prices breaking to a new all time high just prior to the May 2015 general election which would be a significant boost for housing market sentiment and thus the Conservatives election prospects.

The recently updated election forecast graph shows that contrary to recent opinion polls (ComRes, ICM, Ipsos MORI and YouGov weighted average) that erroneously put the Labour party ahead of the Tories on 36% for Labour against 31% for Conservative, instead the Tories have already achieved mission accomplished and barring a house prices crash are heading for an outright election victory, never mind the prospects for another Coalition government which now appear to be extremely improbable.

Source and Comments: http://www.marketoracle.co.uk/Article47618.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2014 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife