LONDON (Reuters) – Tax cuts planned by Boris Johnson, the leading candidate to become Britain’s next prime minister, could cost as much as 20 billion pounds ($25 billion) a year, according to calculations from the Institute for Fiscal Studies think tank.
Johnson, who is vying for the votes of Conservative Party members in a run-off against foreign minister Jeremy Hunt, has proposed raising the threshold at which higher-rate income tax is payable to 80,000 pounds a year from 50,000 pounds.
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Cutting tax on these earnings to 20% from 40% would cost the public finances around 9 billion pounds a year, and benefit the highest-earning 10% of Britons, the IFS said on Tuesday.
To put that figure into context, Britain’s official budget forecasters expect a 29 billion-pound budget deficit this year, assuming there is an orderly Brexit, and to raise total revenues of 811 billion pounds.
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Johnson has also suggested raising the point at which workers are liable for the 12% National Insurance (NI) payroll tax, which currently applies to...
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