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Budget 2015 - Child Tax Credits to Be CUT, Payments Limited to 2 Children

Politics / UK Tax & Budget Jul 08, 2015 - 04:05 AM GMT

By: Nadeem_Walayat

Politics

The newly elected Conservative government is finally about to take grip of Labours benefits culture voter bribes Working and Child Tax Credits black hole that has grown far beyond its initial budget of £2 billion to today's annual monster of £30 billion, that also plays a large part in Britain's immigration crisis as being one of the primary reasons well over one hundred thousand families annually relocate from Eastern Europe to the UK to profit from low paid jobs coupled with generous in work benefits such as tax credits and housing benefit that results in doubling or even tripling of family incomes that typically approaches TEN times similar family incomes of right across Eastern Europe.


In today's budget the Chancellor George Osborne will make clear the role cuts in Tax Credits will play towards contributing towards the £12 billion of welfare spending cuts signaled in the Conservative election manifesto as the Conservatives implement their five year plan towards winning the May 2020 general election that involves 3 years of austerity followed by 2 years of election bribes.

The BBC reports that one mechanism for cutting the Tax credits bill will be to limit child tax credit payments to only the first 2 children. Although this would only apply to new applicants and hence only result in a saving of £1.4 billion, whilst the target amount to be cut from tax credits is approximately £5 billion, some of which will come from a reduction in the benefits cap from £23k to £20k.

Many of the recipients of tax credits will be un uproar when the tax credit cuts are announced, and then next contemplate what they need to do to increase their earnings through employment which is the whole point of the tax credits cuts so as to galvanise those who have grown comfortable on tax credits to seek better higher paying employment opportunities.

The overall Tory strategy is to take the low paid out of tax altogether by raising the annual tax free allowance whilst reducing the amount paid as in work benefits which in effect amounts to a substantial subsidy for employers i.e. today as many as 3 million low paid employees receive more in benefits than are paid by their employers. Dealing with tax credits amongst the other in work benefits will also play its part in making the UK a less enticing destination from european benefits migrants. Ultimately this means to really address the immigration crisis then that would mean in work benefits such as tax credits would need to be phased out altogether!

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By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2015 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.

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