Azara Blog: George Osborne, the cynical political hack

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Date published: 2012/03/11

The BBC says:

Changes to child benefit are "hugely popular" with most voters, a Treasury source has told the BBC.

The government will remove the benefit from households in which someone earns more than £42,475 in January 2013.

The source said only 15% of taxpayers would be hit, and polling suggested 77% of voters backed the move.

What a surprise, the N% are happy for the (100-N)% to lose a subsidy (or equivalently, in effect, to pay more taxes). This is hardly a sane measure of how government policy should be determined. It is unfortunate that the Treasury stoops to such cynical commentary, and it is unfortunate that George Osborne spends all his time tailoring Treasury decision making for short term political headlines, rather than for long term sensible economic planning. The UK is in a serious financial situation, and needs a grown up in charge of the Treasury.

The real problem with the child benefit policy is that it introduces a ridiculous > 100% marginal tax rate at a magic threshold (currently set to be the higher rate tax threshold, although that might change). Everybody knows this is ridiculous, except perhaps George Osborne.

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