Tax cuts for the wealthy come with lim­its

The Washington Times Daily - - World - THE WORLD

LONDON | Bri­tain’s fi­nance min­is­ter has cut the rate of tax the coun­try’s wealth­i­est cit­i­zens will pay, but he in­sisted the rich will pay more through a raft of mea­sures to pre­vent tax avoid­ance and a puni­tive new charge on ex­pen­sive prop­erty sales.

In his an­nual bud­get state­ment Wed­nes­day, Ge­orge Os­borne said he was cut­ting the top rate by 10 per­cent by April next year, ar­gu­ing that the orig­i­nal higher rate did not yield as much as ex­pected — partly be­cause the rich were able to avoid tax.

Mr. Os­borne sought to de­flect any crit­i­cism that any largesse was con­fined to the wealthy by an­nounc­ing a big hike in the level that Bri­tons start pay­ing tax to $14,500. The cost of that mea­sure will cost the Trea­sury about $5.3 bil­lion in 2013-14.

“Within the United States, there are go­ing to be a lot of voices, in Congress and in the public, say­ing, ‘How can we pro­vide food aid when the North Kore­ans re­nege on their prom­ises?’ “he said.

He de­clined to com­ment on whether his coun­try would try to shoot down the mis­sile if it breaches South Korean airspace in its tra­jec­tory over the Yel­low Sea.

The North and South have co­ex­isted in a tech­ni­cal state of war since both sides signed a 1953 truce that ended overt hos­til­i­ties in the Korean War. In re­cent years, the North has killed 50 South Korean troops and civil­ians in mil­i­tary ac­tions widely con­demned by the in­ter­na­tional com­mu­nity.

Mr. Lee, whose ad­min­is­tra­tion has taken a hard line on the North’s regime, expressed hope that other re­gional play­ers — namely China, which is North Korea’s No. 1 trad­ing part­ner and po­lit­i­cal ally, and Viet­nam — will prod re­form in Py­ongyang. Both coun­tries have im­ple­mented cap­i­tal­is­tic re­forms that have in­vig­o­rated their economies.

The South Korean leader also placed hope in mo­men­tum for re­form in­side North Korea.

“We at­tach a lot of hope that change can hap­pen within the North Korea peo­ple,” said Mr. Lee, 70. “This will in­evitably in­flu­ence the North Korean lead­er­ship.”

While North Korea is one of the world’s most iso­lated, re­pres­sive regimes, the col­lapse of its cen­tral state dis­tri­bu­tion sys­tem in the late 1990s gave birth to a prim­i­tive mar­ket econ­omy and a nascent mer­chant class.

What’s more, the North’s in­creas­ing cross-bor­der trade with China has en­abled an in­crease in im­ports of il­le­gal South Korean TV dra­mas, films and pop songs, crack­ing Py­ongyang’s once-for­mi­da­ble in­for­ma­tion wall.

Asked whether he would be will­ing to fol­low the ex­am­ple of his two pre­de­ces­sors — Pres­i­dents Kim Dae-jung and Roh Moo-hyun — in hold­ing high-pro­file sum­mits with the North’s new leader, Mr. Lee was cagey.

‘A fuller picture’

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