Friday, May 14, 2010
Lib Dem tax cuts to be prominent
This morning's Daily Telegraph reports that the government's emergency budget later in the summer will put the first plank of the coalition agreement in place by implementing the Liberal Democrat policy of raising the tax threshold for the low paid.
They say that the tax-free personal allowance will be raised by at least £700 to more than £7,000, a move that will benefit an estimated 25 million lower-paid workers and pensioners. The income tax cut is to be introduced from next April. The personal allowance could rise by even more if extra money is collected from an increase in capital gains tax.
They add though that the Treasury is expected to alter the tax thresholds to ensure that higher-rate taxpayers — those earning more than about £40,000 — will not benefit from the increased allowance. They say that taking the income tax cut and National Insurance rise together, someone earning £10,000 will be £254 better off while someone earning £20,000 will save £154 in tax. But someone earning £50,000 will pay £286 more in tax from next year and someone on £100,000 will pay an extra £786.
An interesting redistribution of tax that clearly shows all the hallmarks of Liberal Democrat influence on the Tories.
They say that the tax-free personal allowance will be raised by at least £700 to more than £7,000, a move that will benefit an estimated 25 million lower-paid workers and pensioners. The income tax cut is to be introduced from next April. The personal allowance could rise by even more if extra money is collected from an increase in capital gains tax.
They add though that the Treasury is expected to alter the tax thresholds to ensure that higher-rate taxpayers — those earning more than about £40,000 — will not benefit from the increased allowance. They say that taking the income tax cut and National Insurance rise together, someone earning £10,000 will be £254 better off while someone earning £20,000 will save £154 in tax. But someone earning £50,000 will pay £286 more in tax from next year and someone on £100,000 will pay an extra £786.
An interesting redistribution of tax that clearly shows all the hallmarks of Liberal Democrat influence on the Tories.
Comments:
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Glad to see you are taking full responsibility for the tax issues of this government. Will remind you of that in years to come
# posted by 
: 2:46 PM
: 2:46 PM
Peter, what you've not mentioned is the increase in VAT will more than wipe out any tax cuts for the low paid.
# posted by : 3:44 PM
: 3:44 PM
What increase in VAT. I cannot see any commitment to raise VAT. All I can see is Labour activists making it up as they go along even though it was Labour who created this mess and who washed their hands of it by refusing to talk seriously about an alternative government. I am astonished that Labour see fit to even speak about the economy never mind seek to lecture others on it.
Not increasing VAT means bigger cuts in public spending. That is why 24 out of the 28 economists who advise the Treasury believe that VAT will rise.The UK has one of the lowest rates of VAT in the EU and an increase to 20% which is closer to the EU norm would bring in £12 billion a year. One other point Peter it is clear that Labour did not walk away from any deal. The numbers just were not there and creating a coalition which relied on the Nationalists would have been the worst possible result for the recovery of the UK economy given their fantasy demand that Wales and Scotland should be protected. We are where we are. You are in a coalition with the Tories and as today's Economist points out it will be a Liberal Democrat as Chief Treasury Secretary who will have responsiblity for forcing through the cuts. It is something that left of centre of Liberal Democrats such as yourself have to live with and I don't envy your task.
# posted by : 9:32 AM
: 9:32 AM
.... while other left of centre politicians stroll off into comfortable opposition having ruined the economy! Still, jeff is right in that he won't envythe task - his lot bottled dealing with the mess they made!
Same old Labour, as in the 80s as now - make a mess, bale out and leave the country to the Tories. Thank goodness this time the LDs have made a deal with the Tories - while Labour go and fiddle again!
Labour's opportunism is truly breath-taking. Hopefully they'll be see for what they are.
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Same old Labour, as in the 80s as now - make a mess, bale out and leave the country to the Tories. Thank goodness this time the LDs have made a deal with the Tories - while Labour go and fiddle again!
Labour's opportunism is truly breath-taking. Hopefully they'll be see for what they are.
# posted by : 9:51 PM
: 9:51 PM<< Home
