Margaret Thatcher must be rolling over in her grave.
British prime minister Boris Johnson has just abandoned two of his flagship pledges from his 2019 election campaign and dramatically raised taxes.
In order to cover the unexpected costs of the pandemic to the National Health Service, the earnings tax levied to pay for the NHS will rise to 13.5 percent, up from 12 percent. A further 2 percent tax will apply to all earnings above 50,000 pounds ($69,000) a year. Working people with a pension will also pay the tax for the first time ever.
The tax, which the Conservative Party used to describe as a tax on jobs, will also be levied on employers. Taxes on dividends will also rise by 1.25 percentage points on dividends. All this is a triggering warning that Britain’s economic recovery could be aborted.
Johnson explained his tax and spending binge by saying that, “I accept that this breaks a manifesto commitment, which is not something I do lightly. But a global pandemic was in no one’s manifesto.”
Several members of Johnson’s cabinet also warned of the political fallout. Jacob Rees-Mogg, the leader of the House of Commons reminded the Express Newspaper that in his successful 1988 campaign for president, George H. W. Bush had promised “Read my lips: no new taxes.” But in 1992, his percentage of the vote fell from 54 percent to 37 percent despite presiding over the end of the Cold War and the successful Iraq War. “Voters remembered those words after President Bush had forgotten them,” Rees-Mogg glumly recalled.