Britain’s Chancellor George Osborne has been criticised for claiming the middle classes like paying the 40p income tax rate. The claim came at a meeting of senior Tory MPs from the 1992 Committee Executive earlier this month.
Mr Osborne was trying to justify why he was planning to raise the income tax threshold on Wednesday’s budget rather than take middle earners out of the 40p bracket. He is said to have claimed that joining the 40p bracket is good as it makes people feel successful.
One MP who was present said: “There was a stunned silence. I never thought I’d hear a Tory Chancellor say paying more tax is good for the middle classes. It was a Marie Antoinette moment.”
Another added: “The 40p rate may not affect the millionaire son of a baronet like Mr Osborne but it is killing hard-working people who earn around £40,000. It was an insult and shows how out of touch this Government has become.”
The key battle over the budget has been whether to raise the income tax threshold to £10,500, giving everyone a £100 a year tax cut, or raise the threshold on the 40p bracket, giving middle earners £200 a year.
Tory grandees like Lord Lamont and Lord Lawson favour the middle class whereas Osborne wants to steal Nick Clegg’s thunder by exceeding the Liberal Democrats pre-election pledge of raising the income tax threshold to £10,000.
On today’s Andrew Marr Show the Chancellor was adamant that raising the income tax threshold was good for everyone, including the middle class.