British Prime Minister Boris Johnson can improve insurance premiums to finance the social protection system. After coronacrisis, the country needs money to restore health care and pensioners’ help. Conservatives declare that the increase in tax will strike on the welfare of British youth and low-income citizens, writes Bloomberg.
According to media reports, residents will make pay at least one percent more of the previous amount of insurance premiums, which should bring the budget about 10 billion pounds ($ 14 billion). If the government goes to this step, it will violate the promise not to raise taxes prescribed in the election manifest of the ruling conservative party in 2019.
The question of the sources of financing of social support in the country has been discussed for several decades, since the life expectancy increases, and the proportion of people with complex diseases in need of constant treatment increases. However, not all officials are ready to take decisive measures and often transmit this responsibility to their successors. Johnson also stated that he “will not shy away from difficult solutions” necessary to finance “damaged” health systems and social assistance. “We experienced an unprecedented shock for the economy. (…) We had to come to accept this and take some really complex decisions,” said the Deputy Health Deputy Minister Nadim Zahavi, supporting the idea of increasing contributions.
Some conservatives expressed concerns that the disregard of the party manifesto on taxes can push the voters. They recalled that insurance premiums are not charged from pensioners, as well as the relevant fund, do not receive funds collected from the increase in capital of rich citizens (from profits from the sale of shares, bonds, precious metals and property). It means that the reform of the system of social protection will first of all will pay young people and low-income residents.
The influential representative of Conservatives Jake Burry advised the authorities to revise the decision and think about increasing the income or corporate tax charged from companies instead of increasing insurance premiums. The amount planned to receive the authorities at the expense of new measures can be obtained by increasing by 1.5 percent of “basic” and “elevated” income tax rates (the progressive taxation scale has a progressive taxation scale, that is, the interest rate of income tax depends on the amount of income) .
In addition, the decision of the government will require additional payments from employers, and entrepreneurs expect that this obligation can retain companies from hiring new employees. At the same time, the lack of personnel at the end of August exceeded the normal level 14 times.