Britain abandoned plans to lower its top income tax rate on Monday, just 10 days after a debt-driven budget caused market turbulence and drew harsh criticism during a cost-of-living crisis.
On the second day of the ruling Conservative Party’s annual conference, Finance Minister Kwasi Kwarteng tweeted that the elimination of the highest 45 percent income tax rate had become a “distraction.”
The statement was also British Prime Minister Liz Truss‘s first major policy reversal since taking office less than a month ago.
“It is clear that the abolition of the 45p tax rate has become a distraction from our overriding mission to tackle the challenges facing our country. As a result, I’m announcing we are not proceeding with the abolition of the … rate.” “We get it, and we have listened.”
Kwarteng suggested eliminating the 45 percent tax on Britons earning more than $167,400 yearly
Additionally, the announcement came after Grant Shapps and Michael Gove, two former cabinet ministers, voiced their opposition to the unfunded tax cuts that Kwarteng included in his divisive mini-budget on September 23. Kwarteng suggested eliminating the 45 percent tax on Britons earning more than $167,400 yearly.
Concerns over a borrowing binge spiked bond yields after the so-called mini-budget, and the pound dropped to a record low versus the dollar. The budget includes a costly freeze on energy expenses for homes and businesses in an effort to lessen the effects of Russia’s invasion of Ukraine, a major producer of gas.