After two years during which it seemed as if the Chancellor had a magic money tree that could find the cash for furlough schemes, soft loans, and tax rebates, or just about anything else the Prime Minister demanded, with a wave of a hand, this is shaping up as the year when the bills finally start to fall due.
We already know the tax rises that are in the pipeline. In April, the new health and social care levy will come into force, imposing what is in effect an extra 1.25pc National Insurance charge on both employees and employers.
At the end of March, the discounted 12.5pc rate of VAT for the hospitality industry will come to an end, putting the rate back up to 20pc, although it would be hard to think of a worse time to make hotel stays and restaurant meals even more expensive.
And perhaps most seriously of all, in April next year the rate of corporation tax, for firms making more than £250,000 a year, will rise steeply, going up from 19pc now to 25pc. On top of all that, at least another million people will be dragged into the higher rate tax bracket over the coming year.
Add it all up, and it amounts to one of the steepest rounds of tax rise a Conservative chancellor, or indeed any chancellor, has ever imposed.
But hold on. That is crazy. In truth, it is the worst possible time to raise taxes. The recovery was already fragile enough, even before the omicron variant swept into the country, and it is already clear that staff absences are going to hit output significantly this month and next as well.
We won’t get back to our 2019 level of GDP until the summer at the earliest, far later than we hoped. We are still coping with the aftershocks of leaving the EU, with both imports and exports down, and while that will be better in the medium-term, there is still a short-term hit to cope with.
And perhaps most of all, with a wave of inflation sweeping across the world, prices are already rising at an alarming rate. Energy prices have soared, and that is going to hit households at precisely the same moment as the rise in taxes.
So are food and labour costs. We can already expect a substantial hit to demand. The result? The economy may struggle to grow at all over the course of 2022, and the tax rises, on top of the cost of living crisis, will be one of the main culprits.
The chancellor may think it was smart to pre-announce tax rises. He got the bad news out of the way, and took the first steps towards rebalancing the public finances, without any immediate political damage. But he is kidding himself.
A planned tax rise does just as much harm as one that has actually been implemented. No one should imagine for a second that people can’t figure out what is about to happen and have started adjusting their plans to cope.
Employers will already be scaling back on the number of staff they need, and postponing any expansion plans, because they know that everyone on the payroll is going to cost them more very soon, while everyone in a job will be tightening their belt because they know their pay packet will be smaller by the spring.