So Darling has delivered his budget and we are all now trying to open our bleary eyes and come to terms with some of the smaller print. As I am currently abroad, I haven’t had a chance to read all the press releases or discuss the finer points with colleagues.

What I do know is that the new Income Tax proposals have shocked many both in terms of the new 50% rate and the loss of personal allowances.

What I don’t understand is why the focus always seems to be on hitting the individual.

The government really had no choice in seeking to raise additional revenues. The economic mire that we find ourselves in has resulted in a massive fall in tax revenues and increased public spending and the bank bailouts have led to a massive level of debt.

However, perhaps there was an alternative strategy that could have been followed.

The current corporation tax system has a top tax rate of 30% which kicks in when profits exceed £1.5 million with a sliding scale between £300,000 and £1.5 million. The rate below £300,000 is currently 21%.

Many companies in the UK make far more profit than the £1.5 million level and some are making almost obscene amounts of profit. In some cases, profit levels of our top companies run to the many £billions yet they still only pay tax at the same rate as a company making £1.5 million.

This makes absolutely no sense at all to me.

BP is a fine example. There last reported pre-tax profits for the year to 31^st December 2008 were about £23.5 billion. That is an extraordinary amount swelled of course by high oil prices that you and I had to bear at the petrol pump. A higher rate of corporation tax of say 40% would raise over £2billion revenue and that is just for one  company. The same calculation for the whole of the FTSE 100 companies would easily have yielded more than the £7 billion that the new income tax hikes are likely to generate.

Now don’t get me wrong, I have some sympathy with higher taxes for the richer in society, but the level at which these new taxes and the reduction in personal allowances is going to have an effect is simply too low.

Corporate Britain at the higher end gets away with murder and the man in the street pays for it every which way.

A new corporate tax scheme with higher rates for higher profits together with higher income tax rates for people earning say over £300,000 would have been fairer and spread the burden more reasonably.

HG