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Page last updated at 07:49 GMT, Thursday, 22 March 2012

Pensioners 'not hit as hard rest of us'


As the dust settles on the chancellor's Budget announcement yesterday who are the winners and losers?

Paul Johnson, director of the Institute for Fiscal Studies, told the Today programme's Evan Davis that in terms of pension tax, "pensioners have not been hit as hard as the rest of us".

He said that over the last several years, "pensioners have been hit less hard than those of working age and those of working age with children".

On reducing the 50p top rate of tax, he said that when looking at Her Majesty's Revenue and Customs figures there are some "pretty astonishing" numbers in that incomes above £150,000 fell by 25% in the year that the 50p rate was introduced "so it has had effect".

But Mr Johnson said there was "a lot of uncertainty" around the original estimate and whether cutting rate will have the same effect as increasing it.

"The experiment with the 50p rate hasn't looked liked it has worked very well", he said adding that "it would be better not to be starting from here".

On housing, Mr Johnson said there are probably other ways of getting money from the rich such as capital gains tax but admitted there were anomalies on housing tax such as council tax.

Over all, he said that "it is pretty clear he [George Osborne] knows what he wants to do with corporation tax which is being lowered and increasing the personal allowance and these are coherent strategies".

But he said that there was also a "hodge podge" of other measures such as stamp duty which is "not best way of increasing taxes"

He finished by saying that "the jury is out" on whether this is a tax reforming Budget or whether the chancellor is "bowing to political wind as things occur".

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