Outside the marginals

a commentary on the politics that followed the UK 2010 & 2015 elections

Liberals: Taking the very poor out of tax

Is it a good idea that those on less than £10,000 a year should pay no tax and therefore have no interest in restraining public spending?

Better surely to have a low starter rate of tax on all pay and convert personal allowances to a universal tax credit to ensure that those with very low earnings pay little or no net tax.

By showing a deduction for tax, those in work are aware that they are making a contribution to public services and that this deduction is liable to increase if they want more public services.

By paying the personal allowance (currently £6, 750) as a universal tax credit (£6,750 @ 20% = £1,295), you restrict the ability of the allowance to give higher rate relief to the rich and also introduce the idea of a minimum “Income” (£1,275 p.a. ~ £25/wk) which is not means tested.  The value of the higher rate relief saved could be used to increase the level of the universal tax credit.

Advertisements

Single Post Navigation

One thought on “Liberals: Taking the very poor out of tax

  1. Pingback: The Aftermath II (of ?) « Outside the marginals

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: