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Revealed: How Farage's £80bn tax cuts would benefit the richest most
Revealed: How Farage's £80bn tax cuts would benefit the richest most

The Independent

time16 hours ago

  • Business
  • The Independent

Revealed: How Farage's £80bn tax cuts would benefit the richest most

Nigel Farage 's claim Reform UK is the 'party of workers' has been called into question as figures show his plans to slash taxes would benefit the richest most. The Reform leader on Tuesday outlined up to £80bn of welfare and tax handouts - without saying how he would fund them - in a bid to entice Labour voters, declaring 'Reform really are now the party of working people'. But economists have warned that the billions of pounds worth of unfunded pledges would cause economic chaos and say Mr Farage's plans would benefit top earners far more than those on the lowest incomes. The centrepiece of Mr Farage's tax plans was a pledge to lift the tax-free income allowance from £12,500 to £20,000, costing between £50bn and £80bn per year. Stuart Adam, a senior economist at the influential Institute for Fiscal Studies (IFS), said 'the biggest beneficiaries are the top 10 per cent'. 'It mainly benefits the better off,' he told The Independent. He said: 'We are talking about the upper middle [class] being the biggest beneficiaries as a percentage of income, and the best off being the biggest beneficiaries in cash terms.' Mr Adam said around a third of adults already earn too little to pay income tax, while the changes would also penalise those on universal credit, as any uplift in their take-home pay would be clawed back in lower welfare payments. He said a better way of targeting specifically 'working people' with the tax cut would be to target employee national insurance, which is only paid by those in work. Calculations for The Independent by the research institute Policy Engine reveal that Mr Farage's plans to hike the tax-free income allowance would boost the incomes of the bottom tenth of earners by 1.3 per cent. By contrast, the calculations show that the top 10 per cent of earners would see their incomes boosted by 4.2 per cent under Reform's plans. Max Mosley, senior economist at the New Economics Foundation, told The Independent that Reform's attempts to appear progressive on issues such as winter fuel payments and the removal of the two-child benefit cap are 'a distraction'. He said: 'It comes as part of a wider set of reforms which include regressive tax changes and cuts to public services working people rely on. When we put all their policies together it is the wealthiest households that benefit the most, and poorest who will see the smallest difference in their standard of living. 'Being a 'party of workers' does not mean giving pennies to the poorest and pounds to the richest.' Reform UK said its plans would 'undoubtedly help working people and benefit the lowest earners'. A spokesman said: 'Our plans to scrap the two-child benefit cap will lift 350,000 children out of poverty, while raising the tax-free salary allowance to £20,000 will save every worker almost £1,500 a year, putting an extra £30 per week back in people's pockets. 'This is in stark contrast to this government, who hiked national insurance for working people and stripped winter fuel payments from over 10 million pensioners.' But it came after an extraordinary speech on Thursday, which showed the severity of the threat Sir Keir believes Labour faces from Reform, in which he directly attacked Mr Farage's tax plans. The prime minister said: 'The question you have to ask about Nigel Farage is, can you trust him? 'Can you trust him with your future? Could you trust him with your jobs? Could you trust him with your mortgages? Your pensions? Your bills? 'He gave the answer on Tuesday - a resounding no. He set out economic plans that contain billions upon billions of completely unfunded spending, precisely the sort of irresponsible splurge that sent your mortgage costs, your bills, and the cost of living through the roof. 'It's Liz Truss all over again.' Sir Keir said Labour was elected to clean up the mess left by Ms Truss, and that 'we are once again fighting the same fantasy, this time from Farage'. And Labour MPs lashed out at Mr Farage over the plans. Dover and Deal MP Mike Tapp, one of Mr Farage's most prominent critics in the Commons, said: 'Nigel Farage is a rich bloke who is trying to trick the public into thinking he is a working class hero. 'His policies speak the truth, in it for himself and his rich mates. Reform have voted against all of Labour's policies standing up for working people…don't be fooled.' Bury North MP James Frith added: 'Farage's plans would prioritise those at the top and be a hammer-blow for family finances through a return to the chaos of Liz Truss. Only the Labour Government can be trusted to drive growth in every part of our country to give working people the security they deserve and our country the renewal it needs."

US ‘Bigger Bubble' Shift May Ignite Stocks, Says BofA's Hartnett
US ‘Bigger Bubble' Shift May Ignite Stocks, Says BofA's Hartnett

Bloomberg

time19 hours ago

  • Business
  • Bloomberg

US ‘Bigger Bubble' Shift May Ignite Stocks, Says BofA's Hartnett

The latest turn by the Trump administration to favor tax cuts and lower tariffs has the potential to kick off another speculative frenzy in markets, according to Bank of America Corp. strategists. The flip in US economic strategy to 'we're going to need a bigger bubble' as the solution to the debt problem could incentivize traders to ditch bonds and pile back into artificial intelligence and crypto trades, wrote the team led Michael Hartnett.

The 7 pieces of the House megabill that could succumb to Senate rules
The 7 pieces of the House megabill that could succumb to Senate rules

Yahoo

time20 hours ago

  • Business
  • Yahoo

The 7 pieces of the House megabill that could succumb to Senate rules

Pet policy measures stuffed into President Donald Trump's 'big, beautiful bill' by House Republicans are now at risk of getting jettisoned by the Senate. From Planned Parenthood to gun silencers to expedited energy permits, Speaker Mike Johnson and committee chairs tucked various provisions into the recently passed megabill to secure votes — and deliver some elusive GOP wins. But several are considered likely to run afoul of strict Senate rules governing reconciliation — the budget process Republicans are using to skirt a Democratic filibuster. Under what's known as the Byrd rule, 'extraneous' measures that have only a negligible impact on the budget, or none at all, have to go. Senate Republicans are expected to closely follow the guidance of parliamentarian Elizabeth MacDonough as they embark on the 'Byrd bath' in the coming weeks, with noncompliant provisions sometimes referred to as, yes, 'Byrd droppings.' Here are some of the biggest areas to watch for a big Byrd mess: The most consequential item subject to Byrd review is the GOP's proposal to use a controversial accounting tactic to essentially zero out the cost of extending Trump's 2017 tax cuts. Republicans temporarily sidestepped getting a formal blessing of the 'current policy baseline' method from MacDonough as part of the budget resolution debate earlier this year, but Senate GOP staff have met with her several times this year on how to try to craft the megabill, two people with knowledge of the discussions said. Other tax provisions are also at risk, though Senate Finance Chair Mike Crapo (R-Idaho) has worked with House Ways and Means Chair Jason Smith (R-Mo.) to fine-tune some of the House text in anticipation of Byrd challenges. The House megabill includes a 10-year ban on states enforcing regulations on artificial intelligence. While there has been no official budgetary score for the provision, Senate Commerce Chair Ted Cruz (R-Texas) has acknowledged the provision will be challenged for a Byrd violation. During a marathon House Energy and Commerce Committee markup earlier this month, panel staff called the provision a "policy change,' which could be detrimental to Republicans' case that it can be included under Senate rules. GOP aides argue it's necessary to carry out a $500 million upgrade of technology at the Commerce Department but Sen. Kevin Cramer (R-N.D.) said it didn't seem to pass the budget-impact smell test. 'That sounds awfully policy-centric in my mind,' he said. Senate Democrats are planning to challenge House language that would place limits on the federal courts' ability to enforce contempt citations. House Republicans have argued the language is aimed at frivolous lawsuits, but Democrats and some legal scholars view it as an attempt to rein in the courts' ability to hold the Trump administration accountable. Some House Republicans have also vowed to try to get the Senate to remove the language, with Rep. Mike Flood (R-Neb.) telling constituents at a town hall this week that he wasn't aware the provision was in the bill. House Republicans made a major change to the way gun silencers are regulated as part of an eleventh-hour effort to win over Rep. Andrew Clyde (R-Ga.). They had already agreed to eliminate a $200 transfer tax on gun silencers in an initial draft of the bill. The final version, however, went much further — also ending the $200 tax on the manufacture of gun silencers and removing them from the regulatory purview of the National Firearms Act, which involves mandatory registration and other strictures. While Republicans are confident the tax eliminations will survive in the Senate, there was internal debate over whether the deregulatory provision would ultimately fall under Byrd, according to one person granted anonymity to disclose private deliberations. Senate Agriculture Chair John Boozman (R-Ark.) has privately warned that the House's agriculture package — which includes $60 billion in programs typically included in the farm bill — could face Byrd-related complications. Boozman supports including 'risk management' policies for farmers — like bolstering crop insurance, which make up the most expensive parts of the farm bill. But he and other Senate Republicans are skeptical that some other programs — dealing with biosecurity, trade promotion, research and more — will comply with Byrd. The decision has big implications for ag policy: If those pieces are stripped out, it could become difficult, if not impossible, for lawmakers to pass a 'skinny' farm bill later this year. MacDonough ruled in 2017 that language aimed at defunding Planned Parenthood did not comply with Byrd amid Republicans' bid to repeal the Affordable Care Act. Now, the GOP is making a similar effort, with the House including language broadly barring Planned Parenthood from receiving federal funding. The parliamentarian isn't the only threat here: Several centrist Republicans in both the House and Senate oppose targeting the organization, which provides other health care services in addition to abortion. House Republicans moved to streamline permitting for fossil fuel projects in their version of the megabill, but — as they have long acknowledged — Senate budget rules are likely to come into play. In 2022, for instance, Democrats omitted energy permitting provisions sought by then-Democratic Sen. Joe Manchin from the reconciliation package that became the Inflation Reduction Act, in part due to Byrd concerns. But Republicans say the narrower measures they included that raise money by charging fees to developers to expedite their permits could skirt Byrd scrutiny. They've already dropped several pipeline permitting provisions and softened language to advance the controversial Ambler Road project in Alaska.

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