Budgets are inherently dull. Outside the Beltway do many Americans pay attention when the President sends his annual budget request to Congress?
But here in Britain, no mater how dull the details, there are weeks of speculation about what the annual budget will contain in terms of taxes and measures to encourage this or that part of the economy. On the day itself, the 24 hour news stations go wall to wall with the story, statistics fly like a seminar in business school.
The main reason for this is the British political system. It has been called an elective dictatorship and nothing shows the kernel of truth in that assessment then watching the Chancellor of the Exchequer in the House of Commons lay out his plans. None of that American fuss and bother about passing it through both houses of congress after lengthy discussion.
There is something thrilling about watching the Chancellor say he is raising tax on cigarettes as of 6 p.m. and knowing that this will be done.
So it was today when the current Chancellor George Osborne stood up and began talking about "How Britain would earn its way in the world." About an hour later he had finished and these are the key points:
Business taxes are coming down, to make the country more congenial to international investors. Cigarette taxes are going up 37 pence a pack at 6 p.m. today.
Osborne shifted personal taxes around. The 50 percent top income tax rate, which hits people earning more than £150,000 ($237,462) was reduced to 45 percent but at the same time he whacked major sales taxes on expensive house sales and closed the creative loopholes that allowed the wealthy to avoid taxes by having corporations purchase their homes.
At the other end of the spectrum people won't have to start paying income taxes until they have earned £9,205 ($14,572) if that doesn't sound like a lot it gives you a sense of how much lower salaries are in Britain in comparison to the U.S.
How all these tax cuts square with Osborne's commitment to maintaining his program of austerity designed to eliminate Britain's structural deficit by fiscal year 2016/17 is not clear.
Of course, this isn't the politburo making an announcement, so there is room for discussion, even if there is not much the opposition Labour Party can do about the government's budget plans. Labour Party leader Ed Miliband, tried his best. He asked Osborne and his boss, Prime Minister David Cameron, and the rest of the cabinet how many would benefit from reducing the top rate of income tax. Cameron and Osborne are extremely wealthy and it is likely they will benefit.
The deeper point Miliband tried to make is this: austerity measures will continue - and unemployment is expected to rise throughout this year as GDP growth is projected to be less than a percentage point. Tax receipts are down already because of the decline in the number of people working. Can a couple of 100,000 people getting five percent off their tax bill make up in consumption what the unemployed are not contributing at the moment?