Budget 2007 Tax Rate Increase

So the fanfare of what is likely to be Gordon Brown’s last budget this March 2007 on the reduction of the personal tax rate from 22p to 20p had most of the tabloids fooled.

Of course this is for 2008 and beyond - but even at the beginning of his speach he said it would be a neutral budget. And because he also scrapped the initial 10p income tax band, it actually meant that poorer people are worse off - and those earning most are better off.

But the biggest blow that was hardly reported was that small businesses would have their tax rate increased from 19p to 22p in the pound over the coming years.

Small businesses prop up the economy in the UK and employ over 50% of people. This is where entreprenurialism begins - where folks want to make something of themselves, take an almighty risk in their dreams financially, not get paid in the first year and juggle everything to attempt to develop a successful business.

So Gordon Brown penalises them for attempting to better themselves - why is this ?

It’s a bit of an unknown as to why Gordon Brown even delivered this budget. Overall it was neutral. Poorer people are worse off and small business owners had their tax % increased by over 10%.

The headlines had most people fooled - maybe the policy setters just don’t know what they are doing?