Luthori

[Ligbruderkrieg]

Chancellor announces plans to increase taxation on Luthorians; Tories slams Gov't on "anti-business" policies.

18th October, 5660

Chancellor of the Exchequer Dr. Rosenbach introduced tonight plans to increase taxation upon some of Luthori’s tax brackets and upon corporations. This decision isn’t surprising, considering that both the National Labour Party and the Greens campaigned on the taxation issue for years at this point, pointing out inequality issues to the Conservatives’ “irresponsible” taxation policies, stating that the right’s policy of tax cuts merely deepened the divide between rich Luthorians and poor Luthorians. The Chancellor of the Exchequer’s policy proposals is to increase and add numerous new taxes primarily targeted towards the middle class and upper class, while also announcing a cut in certain taxes provided by both the middle class and the lower class. The Treasury Department outlined that the Government would increase both the income tax rate for Luthorians earning more than £125.000 per year and those earning between £55.230 and £125.000 per year, by 12 and 5% respectfully, passing from 34% to 46% and 26% to 31%. 

It also announced that the Government would now levy an annual property tax and a federal land transfer tax upon the people, citing once again, the Conservatives’ inability to “do what’s right”, according to credible sources at the Treasury. The new annual property tax will add up to both Orange and Erneshire’s local property taxes, which are currently at 1.66% and 1.89% respectively. Prime Minister Miles stated her willingness to “discuss” with other provincial premiers about the implementation of that said property tax and as well as the implementation of similar taxes by the three other Grand Duchies that currently do not levy such taxation. The Chancellor of the Exchequer stated that this new tax was merely there to “replace” existing taxes and strengthen national finances. Although, of course, the Treasury failed to disclose which taxes were exactly being replaced by both of these taxes and refused to comment upon further tax breaks due to the implementation of these taxes.

The new national property tax will be set at 2.03% of the property’s entire value, as the Federal Gov’t is currently negotiating with local governments to look into the possibility of removing or reducing local property taxes due to the adding of a national property tax. Apart from both the income and national property taxes, the Government also decided to increase by 3.5% taxation upon products deemed to be “luxurious”, with the said tax brought from the current 6.7% to 10.2% of the price of unnecessary products. This tax mostly targets the luxury sector, which will be undoubtedly hit the sector in a harder way than others, as a rise in luxury tax will likely mean an increase in the price of luxury products, hindering the development of that sector, which will, according to some experts, negatively impact Luthori’s economic growth in the next years.

Apart from potentially hindering Luthorian economic growth and the luxury sector’s growth for the next few years, the Luthorian Government also proposed to increase taxation upon Luthori’s successful business class, increasing corporate tax by 2.5%, passing from 25% for companies with high revenue to 27.5%, while it is a small bump in taxation that isn’t going to negatively impact companies in the short term, the government already announced that it wished to see corporate tax increased to 35 to 40% in the next few years, the Chancellor stated that it was “merely normal” for corporations to “pay more to society”, while also dismissing reports about potential negative economic repercussions and Luthori’s image for worldwide corporations in the short term, stating that “companies that choose Luthori to make business should know that this nation aims at restoring a balance between its citizens, so, they will be expected to pay more and act in the national interest”.

The Chancellor’s tax proposals also see the decrease of the VAT tax from 25% to 20% over the course of three years, also being implemented is a new child bonus of £875 to help struggling households welcoming their second or third child. The Chancellor hoped that this number could be risen to £1.000 per child, even though numerous economists worry about the overall cost of the operation, with some stating that the implementation of such bonus may cost the state well over £845 millions per year, adding to overall worry about the Cabinet’s handling of state finances and fears that the Government is merely “handing out presents” for electoral purpose, without any regard for the economic reality that could set in in the aftermath of such policies.

For the Government, this tax proposal is merely the first step in its economic policy, as in a few months, Chancellor Rosenbach will introduce the Cabinet’s plan for medium-term investments and government spending and a plan for increasing the minimum wage to £13.25 per hour, as promised during the campaign trail, although with some already warning that numerous cuts in departments that aren’t deemed “necessary” by the current administration are in order, such as the Defence Office and the Home Office, while both Defence Secretary Grant and Home Secretary Mereyhan have both sharply rebuffed these claims, with the latter stating that “nothing was decided yet”, it is still likely that national security take a heavy hit in this ordeal, with this radical left government prioritizing its interests over the nation’s being far more than willing to sacrifice these key departments.

Meanwhile, the Conservative opposition, still coming back from its heavy defeat in the most recent elections, has already found a way to criticise the current administration, by labeling their policies as being “anti-business” and stating that the tax plan will merely “bring the country further into the abyss that the Labour Party is currently working towards”, the Conservative Party leader, Thomas Hawkins, met with the Moderates and HDA leaders respectively and announced that the Tories would “do everything in their power to prevent the passage of such a “devastating tax plan” and work towards the passage of a “real” plan aimed at helping struggling Luthorians and business alike.

Of course, this tax plan is likely to get approved in both the Chamber and the Senate, and while in theory, the Senate could block these plans, it would merely delay the inevitable, as the Chamber of Representatives, which is held by the Labour-Green coalition can easily override the Senators’ opposition and send the bill straight to the monarch for his assent.