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.


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

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

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