UK government to introduce stealth taxes
Alastair Darling is set to hit the higher paid in the UK in his budget later this week with what is becoming known as stealth taxes. In simple terms, the Chancellor of the Exchequer will freeze all income tax bands in the UK which effectively means that as salaries recover in the UK more people will be pushed into higher tax bands and effectively pay more tax. This is a very subtle approach to increasing tax income for the UK government but it is one which will no doubt catch the attention of many analysts and economists.
It seems as though Alastair Darling, pushed on by Gordon Brown, will attempt to increase the tax take for the UK government while at the same time pushing through more public sector investment. This comes at a time when UK government finances are literally on the floor with more and more investment experts concerned about the short to medium-term outlook for UK government debt.
Whether this strategy will change after the election, assuming the Labour Party is reelected, remains to be seen but there is no doubt that Gordon Brown and Alastair Darling will be presenting a very political and a potentially controversial budget later this week.
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