What happened to the Rishi Sunak I knew at school?
But we accept 20 per cent as the basic rate for the moment, the switch from income tax to NI contributions in recent decades has been remarkable. In 1979, the basic rate of income tax was 30 per cent and the main rate of NI for employees was 6.5 per cent. Notionally, the combined rate of basic rate income tax and NI – at 33.5 per cent – is now lower than it was then. But that ignores a very important difference: NI is only payable on earnings, and only then on earners below the retirement age.
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Continued cuts to income tax rates combined with rises in NI rates have skewed the tax system rather horribly against people who work for a living, while sparing pensioners and other people who live off investments, trust funds and property. We have moved from a tax system where, under the 1970s Labour government, unearned income was penalised – levying up to 98 per cent in some cases – to one which punishes earned income.
Did successive governments of all colours – Labour, Conservatives and the coalition all contributed to the switch – really mean to create such a tax system? Or did they keep skewing the system because they thought that we would be less likely to notice a rise in NI rates than we would a rise in income tax? It is hard to believe they deliberately set out to punish the workers, which leaves the second possibility: they calculated that they would enjoy popular support by cutting income tax and that this support would not be eroded too much by simultaneous rises in NI rates.
Yet surely that calculation has changed now. Most workers will soon notice the rise in NI rates today and that this will impact their living standards just as a rise in income tax rates would. The Conservatives were right when, in opposition, they called NI the ‘jobs tax’. If I were Keir Starmer I would not only oppose the NI rate rise – which he has done – I would revive the Tories’ old slogan and use it as a very potent weapon against them.
Dune: Part Two is not a sequel but a continuation of Dune, so picks up exactly at the point you’d started to wonder if it would ever end. All I can remember from the first film is sand, sand, so much sand, and it must get everywhere, and into your sandwiches. But it is set
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