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Monday, November 18, 2013

Liberal Democrats deserve the credit for changing the tone of the tax debate

Today's Independent editorial highlights the way that the tax debate in Britain has shifted as a result of the Liberal Democrats being in government.

They point out that when the coalition took office three years ago, Britons started paying income tax at a level of only £6,474. Next March, the benchmark will have risen to £10,000 and Nick Clegg is now calling for us to go a stage further by nudging it up to £10,500:

Raising the tax bar is a thoroughly good idea. It validates work, offering some reward to people on modest incomes who might otherwise be tempted to forget holding down a job, and just live off benefits.

At the same time, it is good politics for the Liberal Democrats, who need to go into the next election with a flagship policy, and will be aiming to present themselves as the party that took millions of people out of the tax system. If he gets his way on this point, Nick Clegg will be hoping that the 500,000 or so more people taken out of taxation as a result of this reform will remember their benefactor. The timing of the change couldn’t be better for him, either. If it makes it into the next Budget, it will take effect just before the election.

The paper say that the Liberal Democrats should not let the Conservatives take any credit for this transformation:

The Liberal Democrats have fought a tough corner on taxes on the poor and deserve the credit for gains that have been made. The Tories have been more enthusiastic about championing tax cuts for the rich, which is why Mr Osborne pressed on with cutting the top rate of tax from 50 to 45 per cent. Back in 2010, Mr Cameron described Liberal Democrat calls to cut tax rates at the bottom end as a nice but unaffordable idea. He has since changed his mind, but let’s not forget who persuaded him to do so.
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