The Perception Of Taxes

Update at end of post]

Sometimes it doesn’t matter how fair a tax appears, or how logical it can first seem when spun by the Government of the day, if the public perceive it differently. And in the vanguard of managing that perception is the newspaper part of the Fourth Estate, where yesterday’s budget statement by the Rt Hon Gideon George Oliver Osborne, heir to the seventeenth Baronet, has not gone down well.

Where Osborne took a calculated risk was to reduce the top rate of Income Tax from 50% to 45%, while elsewhere moving the tax thresholds in a way that would see as many as five million folks soon getting caught in the 40% Income Tax band, and also being less generous to tax-paying pensioners. With the last point, he was on a hiding to nothing. And has he been given a hiding.

The obedient hackery of the legendarily foul mouthed Paul Dacre were on the Chancellor’s case in short order. “Osborne Picks The Pockets Of Pensioners” thundered the banner headline on today’s Daily Mail print edition. And, demmit, this allowance was introduced in 1925 by Winshton himshelf! Have these young whippersnappers no shame?

Moreover, it was clear to the Mail that this was taking from the elderly to give to the richest 1%. Osborne failed no better at the Express, where the equally forthright headline was “5M Pensioners Robbed In The Budget”, with the Churchill reference repeated. The Express was doing no more than addressing much of its target demographic: older and often cost conscious voters.

Here, too, it was stressed that this was to fund a giveaway for the “super rich”. The theme continued – no surprise here – at the Labour supporting Mirror, with Osborne and Young Dave characterised as two muggers. Both were described as “cruel”. And the phrase “granny tax” that is now being widely used, fair or otherwise, was trowelled on. But the Tories’ worst news came from a usually more friendly source.

Rupe’s downmarket troops at the Super Soaraway Currant Bun were not happy. “He’s taking us for fuels” screamed the headline, reminding readers that Osborne had declined to intervene on fuel duty – and that a planned 3p a litre rise would go ahead later in the year. “Budget 2012: Chancellor clobbers ordinary Brits” came the observation. Once again there was talk of a “granny tax”.

The move to slap VAT on hot take-away foods from places like Greggs hasn’t gone down well, either. After all, that’s going to hit White Van Man – a key Sun demographic. Many at the foot of the ladder may have been taken out of tax altogether, and some of the changes may be logical – there was already VAT on take-aways from burger restaurants, for instance – but perception is all.

And right now, that perception is that ordinary hardworking folks have been had.

[UPDATE 1815 hours: there is little sympathy for Osborne anywhere on the political spectrum. On his Tel blog, former Tory minister Norman Tebbit tells that the Chancellor has "hurt a vulnerable group of the elderly", and that "it is unfair and lousy politics".

Also at the Telegraph, but of more middling persuasion, Dan Hodges calls it "George Osborne's kamikaze moment", telling of Labour MPs who cannot quite believe that the Chancellor has brought them such a gift.

But the most telling analysis comes from Pa Broon's former media enforcer Damian McBride, who has given a fascinating insight of how Brown's budgets would be painstakingly put together, with every item talked through and any downsides identified. McBride concludes that someone was not doing their homework this time, which he finds perplexing, given that he believed the kind of process he remembers appeared to have been followed with Osborne's first two Budgets.

As to the rationale of the 50p to 45p top rate cut, this is filleted by Chris Dillow at Stumbling and Mumbling, in a post appropriately titled 45P: POWER BEATS EVIDENCE. Worth a read]