Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Time to take the RED Pill - 28th May 24
US Economy Slowing Slipping into Recession, But Not There Yet - 28th May 24
Gold vs. Silver – Very Important Medium-term Signal - 28th May 24
Is Gold Price Heading to $2,275 - 2,280? - 28th May 24
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24
Micro Strategy Bubble Mania - 10th May 24
Biden's Bureau of Labor Statistics is Cooking Jobs Reports - 10th May 24
Bitcoin Price Swings Analysis - 9th May 24
Could Chinese Gold Be the Straw That Breaks the Dollar's Back? - 9th May 24
The Federal Reserve Is Broke! - 9th May 24
The Elliott Wave Crash Course - 9th May 24
Psychologically Prepared for Bitcoin Bull Market Bubble MANIA Rug Pull Corrections 2024 - 8th May 24
Why You Should Pay Attention to This Time-Tested Stock Market Indicator Now - 8th May 24
Copper: The India Factor - 8th May 24
Gold 2008 and 2022 All Over Again? Stocks, USDX - 8th May 24
Holocaust Survivor States Israel is Like Nazi Germany, The Fourth Reich - 8th May 24
Fourth Reich Invades Rafah Concentration Camp To Kill Palestinian Children - 8th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

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

© 2005-2022 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