The dark side of Joe Biden’s spending blitz is becoming all too clear
America’s $1.9 trillion stimulus bill is going to overheat the economy – and its knock-on effects will be felt across the world
9 March 2021 • 1:02pm
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You can have too much of a good thing. And you can have it at the wrong time.
Joe Biden has succeeded in ramming most of his $1.9 trillion relief package through the Senate, running roughshod over Republican objections as he went along by misusing “reconciliation”. That arcane procedure was agreed in 1974 to control the budget deficit. He has just used to force through a deficit of 15pc of GDP.
Sam Brodbeck: Freezing allowances will leave you with less in your pocket
Make no mistake: we will all pay more tax as a result of this Budget. Mr Sunak may not have broken the manifesto commitment not to raise income tax, National Insurance or VAT, but freezing various allowances means you will (eventually) have less in your pocket. Wages and asset prices naturally rise, hence the logic of raising the amount we can earn or realise in capital profits before the tax man takes his cut.
Planned increases to the personal allowance and the higher-rate, 40 per cent, threshold have been delayed until April 2022, and then will be frozen. More and more people will fall into higher rate tax bands. Pension savers, so almost all of us, will also be penalised for saving and, most bizarrely, for healthy investment returns. The “lifetime allowance” on pensions pot will stay stuck at £1.07 million.
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