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Alistair Darling gambles with banking super tax

Alistair Darling has today taken a massive gamble in his pre-budget report with the introduction of a banking super tax on bonuses in excess of £25,000 year. This new tax is set to bring in around £560 million for the UK coffers, although in the overall picture this is fairly insignificant and more of a political move than an economic move. So what does this mean?

Yet again the government has moved to demonise the UK banking sector and all of those who work in this particular environment. Not only will there be a super tax introduced on banking bonuses over £25,000 but those earning in excess of £20,000 a year will also see a 0.5% increase in their national insurance rate. This is purely and simply an act planned in advance of the next general election which will differentiate the Labour Party from the Conservative Party.

However, it does seem to ignore the fact that "new Labour" very much depended upon the support of Middle England where incomes of £20,000 and above are commonplace. The hammering of high earning individuals in the UK is a very high-risk gamble by the Labour Party and is nothing but a blatant attempt to bring those "traditional" Labour supporters back on board.

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