Labor Party budget tax raid in UK - Resignation of Keir Starmer

Introduction

Rachel Reeves, the Chancellor in the UK’s Labour government, is set to deliver a Budget with significant tax increases, potentially the largest in British history. Key aspects of this tax raid include:

Scale of Tax Increases

The Budget is expected to involve up to £35 billion in tax rises, the most on record in cash terms.

This tax raid aims to fill a £40 billion gap in public finances, covering various expenses including workers’ pay rises and NHS funding.

Specific Tax Measures

Capital Gains Tax: Likely to increase on the sale of shares by “several percentage points” from the current 20% rate.

Employer National Insurance Contributions:

Expected to rise, potentially raising £8.5 billion.

Non-Dom Taxation:

Changes to the taxation of non-domiciled individuals, though details are still uncertain.

Energy Profits Levy:

Increase to 38% for oil and gas companies, with changes to investment allowances.

Other Potential Changes

Possible restrictions on pension tax relief, though this is unpopular among the public.

Consideration of changes to inheritance tax exemptions and rules.

Removal of VAT exemption on private school fees.

Public Reaction

A survey indicates that 66% of Britons are worried about potential tax increases.

Capital gains tax hikes received the most public support at 44%, while restrictions to pension tax relief were least popular at 22%.

Economic Context

The Labour government claims there is a “£22 billion blackhole” in the nation’s finances.

Conclusion

Changes to fiscal rules are expected to allow for increased infrastructure spending.

This Budget represents a significant shift in fiscal policy, with Labour attempting to balance increased taxation with economic growth and investment commitments.

Labor party Keir Starmer who took office on July 5, 2024 seems short lived due to petition circling around.

if Budget is passed, the citizens will want new elections which would become inevitable