Lib Dems Propose Tax Cuts for Low and Middle Income Families
April 20, 2009 9:25 PM
The Liberal Democrats will fight the next General Election on a pledge to support low and middle income households through the recession by a £700 cut in income tax. The Party plans to raise the income tax threshold to £10,000.
The tax changes will be paid for by removing tax loopholes exploited by big businesses and the wealthy.
Simon Wright, Liberal Democrat Parliamentary Spokesman for Norwich South, welcomed the proposals:
"Many households in Norwich are really feeling the financial strain at the moment. The Government must act to make the tax system fairer and ease the burden on those who are struggling.
"For too long, big companies have been able to stash away profits in tax havens, leaving ordinary people to pick up the tax bills. It's essential that action is taken to address the imbalance that has seen the very wealthy pay less of their income in tax than people on more modest earnings. It's not right that those who can afford to employ clever accountants should escape taxation, as it means the rest of us have to pick up the bills.
"By putting pounds back in the pockets of ordinary people, these proposals would help stimulate the economy by making it easier for millions of people to spend their money."
Notes to Editors
Raising the personal allowance to £10,000 for all people will mean that those on the standard personal allowance will see an increase in their allowance of £3,525 in 2009/10; this will give an effective tax cut of £705 to anyone earning over £10,000 .
Raising the personal allowance will take approximately four million people out income tax altogether: <<a href="http://www.hmrc.gov.uk/stats/income_tax/menu.htm">http://www.hmrc.gov.uk/stats/income_tax/menu.htm>
Measures which will be used to pay for this proposed increase in the personal allowance include:
- Restricting tax relief on pension contributions to the basic rate
- Taxing Capital Gains at marginal income tax rates, allowing for indexation and retirement relief
- Tackling Stamp Duty Land Tax avoidance and Corporation Tax avoidance
- Subjecting benefits in kind to National Insurance Contributions as well as income tax and applying National Insurance to multiple jobs
- Switching aviation taxes from per person to per plane and increasing taxation on non lifeline domestic flights.
Full details of the costing of this tax package will be released in advance of the General Election based on latest HMRC estimates.
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