Tax Your Brain
We challenged you to predict what the Chancellor was going to do. The winner was Chris Brown - she will be receiving her collection of prizes shortly.
BBC Economics Correspondent Evan Davis set the following questions and allocated points according to how close he felt the answers came to reality.
1) Overall Budget Strategy:
Taking all taxes except the Windfall Tax into account, and remembering that some taxes may go down while others may go up, will the Chancellor raise the overall tax burden in the current financial year?
No - and neither will he pre-announce rises for next year
No - but he will pre-announce rises for next year
Yes - by about £2bn, regardless of any pre-announcements 1 pt
Yes - by between £3-£5bn, regardless of any pre-announcements 5 pts
Yes - by more than £5bn, regardless of any pre-announcements 1 pt
No - he will cut taxes, whether or not he makes any pre-announcements
2) The Public Finances:
What will the Chancellor predict for the Public Sector Borrowing Requirement in the financial year 2001/2? (Kenneth Clarke's prediction was a surplus - ie debt repayment - of £18bn.)
A surplus of £18bn
A surplus of more than £18bn 3 pts
A surplus of between £10-£17bn 2 pts
A surplus of between £1-9bn 1 pt
A deficit
Neutral - neither a surplus or a deficit
Gordon Brown will recast the figures so no direct comparison can be made 5 pts
3) Growth:
What figure will the Chancellor predict for 1998? (Kenneth Clarke's figure was 3.0%)
2.0% or less
2.25%-2.5% 5 pts
2.75%-3.0%
3.25%-3.5%
3.75%-4.0%
4.25% or above
4) Income Tax:
Will the Chancellor introduce a lower starting rate?
No 5 pts
Yes - cutting the 20% rate to 15-19%
Yes - cutting the 20% rate to 14% or below
Yes - introducing a rate of 15% or above in addition to the 20% rate
Yes - introducing a rate of below 15% in addition to the 20% rate
5) MIRAS:
Will Gordon Brown cut the value of mortgage interest tax relief?
No
Yes - restricting its value to 10% 5 pts
Yes - restricting its value to 5%
Yes - restricting its value to some other rate
Yes - abolishing it completely
Yes - but reforming it in some way so while it will still exist, it will be in a different form
6) Income Tax:
Will the Chancellor raise the burden of income tax by cutting the value of other allowances in some way?
No 5 pts
Yes - by restricting the value of personal allowances to no more than its value to a basic rate taxpayer
Yes - by cutting the married couples' allowance or restricting its value
Yes - by restricting the tax deductability of pension contributions to the basic rate
Yes - by doing at least two of the above three options
7) Windfall Tax:
To the nearest billion, how much will the Chancellor say he aims to raise over the lifetime of this parliament?
Less than £3bn
£3bn
£4bn
£5bn 5 pts
£6bn
£7bn or above
8) Windfall Tax:
On what basis will companies have to pay the levy?
On excess profits made in a fixed period of years after they were privatised 3 pts
On excess profits made from when they were privatised up to some fixed date
On excess profits made between two fixed dates
On excess shareholder returns made in a fixed period of years after they were privatised 3 pts
On excess shareholder returns made from when they were privatised up to some fixed date
On excess shareholder returns made between two fixed dates
Not on the basis of excess profits or shareholder returns 5 pts
9) Company Tax:
Will the Chancellor cut the rate of Advanced Corporation tax, therefore cutting the rebate payable to pension funds?
No
Yes - by about 5 points to about 15%
Yes - by about 10 points to about 10%
Yes - by about 15 points to about 5%
He will abolish it 5 pts
He will announce a review of the tax treatment of dividends, or corporate tax in general
10) Budget Strategy:
Taking the following possible strategies, which combinations will best characterise the Budget?
A Basic manifesto pledges (windfall tax and welfare to work package)
B Tax raising package
C Give and take tax package
D A big hit on the corporate sector
E Social security reform (going beyond the welfare to work package)
F Major announcements of future reforms or significant inquiries
Basic manifesto pledges (A only)
The prudent Budget (A and B only) 2 pts
The give and take Budget (A and C only)
The anti-business Budget (A, plus B or C, and D) 5 pts
The radical Budget (A, either B or C, plus E) 3 pts
The social security reform Budget (A, neither B or C, plus E 1 pt
The agenda-setting Budget (A and F, plus any combination of the others 2 pts
The surprise Budget (none of the above, or some of the above but overshadowed by a headline-grabbing measure or measures
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