UK slams rich with tax before election

LONDON – Prime Minister Gordon Brown’s government used its last budget before a looming national election to take from the rich and give to the poor, raising accusations it is invoking a class war as it attempts to win over recession-weary voters.

With just weeks to go before the national poll, the ruling Labour Party said Wednesday it was hiking taxes on the wealthy to pay for breaks given to lower income earners such as scrapping house purchase duties for first-time home buyers.As Labour wallows behind the main opposition Conservative Party in the opinion polls, Treasury chief Alistair Darling’s budget statement was light on financial detail but heavy on political rhetoric.’This will be a budget to secure the recovery, tackle borrowing and invest in our industrial future,’ Darling told lawmakers in the House of Commons. ‘It will continue targeted support for business and families where and when it is needed.’At the centre of that promised support was a headline-grabbing pledge to drop so-called stamp duty on house purchases made by first-time buyers on properties costing up to 250 000 pounds (US$370 000).That measure will be funded by a doubling in the stamp duty to five per cent on all properties costing over one million pounds from the start of April.In other Robin Hood-like measures, Darling said an increase in income tax would not hit anyone earning less than 25 000 pounds a year, but there would be significant tax increases and reduced personal allowances on those earning more than 150 000 pounds a year.Darling attempted to downplay the moves, saying they were not made ‘out of dogma or ideology’ but a determination to ensure the country’s ‘overall tax regime remains competitive.’But commentators in class-conscious Britain were quick to jump on the implications: the right-wing Daily Mail newspaper blared: ‘Now it’s a class war! Darling hammers the better off with tax rises’ referring to ‘punishments’ for the better off.And in a further dig at the Conservatives’ blue blood, Darling announced that Britain had signed a tax information exchange with three offshore tax havens, including Belize where the Tories’ controversial multimillionaire Deputy Chairman Michael Ashcroft is based. Ashcroft’s admission earlier this month that he has non-domiciled tax status, meaning he doesn’t pay UK taxes on foreign earnings, caused the opposition much embarrassment.The budget plans shows current expenditure rising from 604,6 billion pounds in the current financial year, which ends on March 31, to 644 billion pounds in the next year and 662 billion pounds in 2011-12.The government maintained its forecast for economic growth this year of 1-1,5 per cent, but lowered next year’s forecast slightly to 3-3,5 per cent from 3,5 per cent. Most economists still consider that optimistic.Borrowing would reach 167 billion pounds this year, Darling said, down from the previously forecast record 178 billion pounds. A series of reductions in the next few years would leave the deficit 100 billion pounds lower in 2014-15 than previously thought, he added. – Nampa-AP