Pensioners suffer biggest losses from Tory tax raid as Hunt boosts millennials

The Telegraph is running a piece on pensioners losing out in the budget, as most don’t pay national insurance contributions.  They back this up with a brilliant Matt cartoon on the front showing two tax people saying ‘Pensioners are the biggest losers in the Budget.  We decided they were the least likely to hold violent demonstrations

There’s also another cartoon showing Hunt handing out money to a young lady with a push chair, and she walks away, he is seen picking the wallet from her pocket!

All these can be seen here (subscription may be necessary).

In summary, it says that the latest Budget has stirred controversy, particularly concerning its impact on pensioners. Rishi Sunak and Jeremy Hunt’s fiscal policies, which prioritize millennials, have drawn criticism for imposing what’s been dubbed a “stealth tax raid” on the elderly.

According to assessments by the Resolution Foundation and the Institute for Fiscal Studies (IFS), pensioners and higher earners are set to be the most affected by the end of this parliament due to the absence of benefits from recent National Insurance cuts. The freeze on income tax thresholds for six years will result in an average £1,000 reduction in income for eight million retirees. Those in higher tax brackets could face an even greater hit, with some potentially losing up to £3,000.

Critics argue that the significant tax burden on pensioners marks a notable shift from previous policies that favored this demographic. While the Conservative Party aims to keep the triple lock on state pensions if re-elected, concerns persist regarding the erosion of pensioners’ financial security.

Jeremy Hunt defended the decision to cut National Insurance instead of income tax, emphasizing the government’s efforts to support pensioners. However, the lack of adjustments to tax thresholds in line with inflation means that the average taxpaying pensioner could be £1,000 worse off annually compared to the start of this parliament.

In contrast, younger generations stand to benefit from various welfare and tax adjustments, including changes to Universal Credit and benefits for first children. The Resolution Foundation highlights that low-income households have seen significant gains compared to 2019.

Despite the government’s intentions to stimulate economic growth through tax cuts, concerns persist about the overall impact on the economy and the distribution of tax burdens across different income groups. With the tax burden projected to reach its highest share of GDP since 1948, the debate over fiscal policy remains contentious.

 

 

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