Thursday 18 March 2010

Questions from Wisbech Grammar students (3): tax and the low paid

Isn't it unfair that under your proposals, people on incomes below £10,000 a year wouldn't have to pay income tax?, I was asked at Wisbech Grammar School earlier this week.

Of course, there's already a threshhold at the moment by which the first few thousand pounds of earned income is tax-free. Liberal Democrat proposals would raise that threshhold significantly, to £10,000. In North East Cambridgeshire, that would mean that 6,000 earners would pay no income tax at all - and frankly, on wages at that level, that seems perfectly reasonable to me. After all, people on low incomes already pay tax in all sorts of other ways, not least through VAT, and taxes on goods such as alcohol and tobacco.

And of course the £10,000 threshhold would mean a £700 a year tax cut for millions of other earners, on lower and middle incomes above £10,000 a year.

With the Conservatives only apparently interested in tax cuts for millionaires, it's good to see the Liberal Democrats prioritising tax cuts for millions of working people instead.

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