David Cameron is “delighted” that MPs backed the Conservatives’ plans for swingeing tax credit cuts last week. George Osborne told MPs on the cross-party Treasury select committee he was “comfortable” about the “judgment call” he had made.

For the families who will receive letters in the coming weeks revealing precisely how much they will lose in April – £1,000 a year for more than 3 million households, according to the Institute for Fiscal Studies – that language will seem uncaring, casual even.

But the chancellor’s choice of words, in particular, is revealing of something else. Cutting tax credits is not a necessity: it’s a “judgment call” – a deliberate act of policy.

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As Osborne framed it, the cuts result from a binary choice between allowing taxpayer support for working families to balloon unsustainably, and shifting to – his current catchphrase – a low-welfare, high-wage economy.

But the roots of that choice go back a long way. In the wake of the financial crisis, Osborne deliberately opted to make deficit reduction the framing narrative for economic policy. It helped to pin the causes of the crisis on a less-than-prudent Labour party, summon old myths about the spendthrift left, and allow him to paint himself as a cautious homeowner “fixing the roof while the sun is shining”.

The government’s fiscal charter puts that deficit-cutting obsession in black and white. John McDonnell, the shadow chancellor, may have taken his time getting there, but in opposing it, he made exactly the right argument. No mainstream economist believes that aiming to run an outright surplus on the public finances, year after year, is necessary or even wise.

There’s a second choice involved here, too, though: putting the weight heavily on spending cuts rather than tax rises to balance the books – about 80%-20% over the past five years.

Tax credit cuts may be the policy that sees Osborne’s carefully constructed political edifice crumble

Osborne’s policy since 2010 has consistently leant more heavily on shrinking what he saw as a bloated state than increasing taxes. And canny positioning by Ed Balls during the election campaign goaded the chancellor into publicly ruling out a series of possible tax rises – including a VAT increase – reducing the Treasury’s post-election room for manoeuvre considerably.

Osborne did announce tax rises in his July budget, which will raise a net £9bn by 2018-19, hitting buy-to-let investors and the drivers of gas-guzzling cars, among other victims unlikely to provoke many public tears. But spending cuts continue to dominate.

And the government has made a third choice – picking its targets. The state pension has been protected since 2010 by the “triple lock”, originally a Liberal Democrat policy, which Paul Johnson, director of the Institute for Fiscal Studies, said last week would eventually prove unsustainable.

A report from the Government Actuary’s Department, which was briefly published and then removed from the web earlier this month – but not before being spotted by eagle-eyed journalists – suggested that maintaining the triple lock is costing £6bn a year compared to just increasing state pensions in line with earnings. That would be more than enough to reverse the tax credit changes.

Other groups have been the beneficiaries of the chancellor’s generosity too. Corporation tax, already the joint lowest among G20 countries, alongside Russia, Turkey and Saudi Arabia, is set to be cut again. It was 28% in 2010; it will be 18% by 2020. The latest two-percentage-point cut, announced in July, will cost £2.5bn a year by 2020. The government would argue a lower rate attracts investment and helps create jobs; but it’s hard to see the rationale for continuing a race to the bottom you’ve already won.

Higher earners have been winners too, with the threshold for higher rate tax set to rise, and wealthy homeowners allowed to pass on a larger property to their children free of inheritance tax.

Yet while doling out goodies to these less-than-needy groups, July’s budget coolly and deliberately targeted millions of low-paid, hard-pressed families. Osborne’s continued refusal to publish a full distributional analysis of the policies (Treasury select committee chairman Andrew Tyrie has given him until 31 October to do so) suggests he is not as “comfortable” as he claims.

When challenged about the tax credit cuts, Osborne trumpets his new “national living wage”, the extension of free childcare and the planned increase in the personal tax allowance.

Yet most of the boost from these measures will not be felt by tax credit recipients. Many already have most of their childcare costs paid for, and the personal tax allowance is already high enough to exclude many lower earners.

But most importantly, as work by the Resolution Foundation has painstakingly pointed out, the structure of the cuts – which both reduce the earnings level at which tax credits are lost and increase the rate at which they are withdrawn – means many tax credit recipients will see almost all the benefit of higher wages wiped out.

So a single-earner household earning £15,000, for example (tax credits are awarded according to household income), will face a £1,500 cut in tax credits; but if they seek to increase their working hours to offset that loss, for each extra £1 they earn, an extraordinary 80p will be lost in taxes and reduced benefit payments. Flip that around and it’s an 80p marginal tax rate on any extra earnings. Now there’s a fraught and complex debate in economics about taxation and work incentives; but few of us would rush to take on extra hours if we could only take home £1 in every £5 we earned.

And that’s why even rightwing thinktanks the Adam Smith Institute and the Institute for Economic Affairs, hardly the skivers’ friends, criticised the policy last week: it will undermine work incentives. Sam Bowman of the ASI said: “The government has long claimed to want to make work pay for everyone, but cutting tax credits would disincentivise work and hurt those at the bottom of society.”

Tax credits cuts may yet be the policy that sees Osborne’s carefully constructed political edifice start to crumble. He chose austerity over investment, cutting back the state over taxing the rich, rewarding the comfortable over protecting the needy. And as Heidi Allen’s powerful maiden speech showed last week, those “judgment calls” may finally have caught up with him, by leading to policies even his own backbenchers are struggling to defend.