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Danny Alexander fires shot in fairer taxes battle

18 September 2012

Danny Alexander is clearly super-keen to remind everyone of what the Lib Dem slogan is for their party conference, which begins on Saturday. ‘We need fairer taxes in these tough times,’ he told the Evening Standard today as he revealed that he will use his speech at the ‘fairer tax in tough times’ conference to call for the income tax threshold to rise to £10,000.

The rise that George Osborne announced in this year’s Budget was largely claimed by the Lib Dems as their own policy, and was a diamond in the rough of a deeply unpopular budget. That the Chief Secretary to the Treasury is tabling a motion to his conference about raising the level again from £9,205 to £10,000 shows the party wants to get in there first and continue to claim credit for this policy which, as Tim Montgomerie pointed out back in April, Conservatives are equally happy about. After all, the policy was first proposed by a Tory peer: Lord Saatchi wrote a pamphlet in 2001 for the Centre for Policy Studies called ‘Poor People! Stop Paying Tax!’.

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This isn’t part of the junior coalition partner’s differentiation strategy, it’s part of their push to claim back some of the good things from government, as well as taking the flak for tuition fees, the NHS and other unpopular policies. Expect a push back from Tory MPs such as Robert Halfon and Charlie Elphicke who have also made the case for tax cuts for low earners.

UPDATE, 7.30pm: Halfon gets in touch to point out that ‘this has been a priority for many Conservatives for some years now’. He adds:

‘For tax cuts to work, we have to show that they are a moral creed, designed to help the poor. ‘Lower taxes for lower earners’ should be a Tory battle cry.’

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  • Forlornehope

    One of the fairest systems is a flat rate of tax with a high tax threshold. That way as a person’s income increases they pay a steadily increasing proportion of it without the perverse incentives of different tax rates. It will never fly, of course, because politicians and journalists in this country are, with rare exceptions, far too innumerate to understand how it works.

  • Smitherjones

    It should also be remembered that the Libdems core policy has also been UKIP polivcy since 2006 and in fact UKIP would raiser the threshold to £11.5K. Plus UKIP want a flat income tax rate of 31%. All that makes the Libdems ‘prize’ policy seem rather miserly doesn’t it?

  • Jebediah

    Strange use of the word fairer. 1% of the population pay 28% of the taxes… will they be paying less?

  • Iain Hill

    Fairer taxes means having the guts to raise taxes on the well-off (ie me). Neither Labour nor the LibDems seem willing to do so.

    • Vaeliaro

      I agree. Nobody in politics has the guts to push through radical things that they believe in anymore. We need more politicians like Thatcher. She wasn’t afraid to ram through what she believed in, even if it might mean that she would be punished. I’m not advocating her policies, just her attitude to politics.

      All 3 major parties are so timid in their positioning that what differentiates them is just posturing. Real proof of what they believe in comes from observing their behaviour, and once in power, they all behave the same.

  • Villi Jidiat

    I have a question for those of the left: were we in the position not to require anyone to pay income tax, should the wealthy be tapped for cash punitively?

  • Heartless etc.,

    I’m never clear – as with the H2B – just what the Lib ‘Dems’ stand for. But that’s probably my inability to make sense of bullshit.

  • Heartless etc.,

    I’m never clear – as with the H2B – just what the Lib ‘Dems’ stand for. But that’s probably my inability to make sense of bullshit.

    • Charlie the Chump

      Clear really. They are for Good and against Bad. Nice and frothy. Little definition.

    • Vaeliaro

      Their basic philosophy is Social Liberalism, similar I would say to the Democrats in the US. Freedom from state control, civil/human rights and equality of opportunity for all citizens. Social Liberals generally differ from Classical Liberals in that they believe the state has a role to play in delivering healthcare, education, welfare, etc. Effectively left wing on social issues and human rights but right wing on more economic matters as I understand it.

  • DavidDp

    Totally wrong. The tax base should be wide and shallow, not thin and deep. All should pay taxes so that they understand they have a stake in government spending. Further, the wider the base, the less need to have heavy taxes ona small group of people; all pay a small amount, rather than the middle class paying a lot.

    • HJ777

      I disagree. The amount raised by income tax on the lowest paid is a relatively low proportion of the income tax take and carries a large admin overhead cost. We then pay a further admin. cost to pay them in-work benefits.

      We should be removing them from income tax to incentivise employment, not taxing them before they conceivably earn enough to live on.

      In any case, they do pay taxes – VAT, Council Tax, NI, etc.

      • treborc1

        Of course we need better wages for the poorest and no tax would of course help, one of the most expensive benefits to run is the means tested benefits, it can cost a fortune to sort out

  • Radford_NG

    19 Sept.c4.20am BST……£10,000:this is less then £200 per week in the language of the poor;which is the language that should be used.Make the threshold £300 per week at least [with the abolition of Nat. Ins.–a poll-tax on employment].This will go a long way to abolish the negative pay/benefits nexus.All the extra money in the pay packet will go straight into the local economy each week supporting jobs and,further down the line,production;all of which creates more tax revenue . (At the same time abolish death-duties/inheritance tax.) And thus gasump the Lib/Dems.

  • MikeBrighton

    When you hear “We need fairer taxes in these tough times” grab hold of you wallet as they are looking for your money

  • ButcombeMan

    Fraud by Danny and the LibDems.
    No true Conservative disagrees with this.

    But hey, let us give them some rope. the LibDems have lots of pain to go through, Clegg always looks as though he has a bad dose of the runs and may have to rush off at any minute

    A very sad and ridiculous man.

    Danny is one of the saner ones.

    • andagain

      There are people on this comment thread who disagree with this. Are they Labour voters? LibDems?

  • BigAl

    How about raising the 40% tax threshold if you want to be fair. Many more people now pay 40% income tax plus NI than when this tax was introduced . Why? This will soon become the new ‘basic rate’ for most people. A high tax economy will not survive long before those who pay revolt against those who do not.

    • an ex-tory voter

      We can only hope!! Sadly, as all 3 main parties are pursuing more or less the same policies it seems that the only way the entire tax scam will be stopped is when the taxpayers do actually revolt.

    • Vaeliaro

      The basic rate is not the highest rate that the majority pay. It is the rate that every income taxpayer starts on. And nobody pays 40% income tax, they pay 40% on the money earned over £42K (or whatever the threshold is). Even if the majority were to fall into the 40% bracket, the majority of their income would still be taxed at the 20% rate. Perhaps it’s just sloppy language use, but it astonishes me how many people say ‘I pay 40% tax… it’s so unfair’. Even when I explained this to a friend, he still insisted that he did indeed pay 40% on ALL his earnings and that I was wrong!

  • Paul

    Fairer taxes? From the silly party that thinks you should pay tax for having the temerity of living in a nice house that’s gone up in value over the years, and should pay extra tax for being successful? Thanks a lot Danny

    • Jamie

      Who pays tax for living in a nice house that’s gone up in value?

      • Paul

        I refer to their mansion tax proposal – I did say “thinks”

    • andagain

      People who rent are hit by rises in house prices – they drive rents up. Why should they be the only people to suffer? Building a house is an investment – buying one is a speculation.

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