Save the 10p starting rate!

[Peter]

http://www.frankfield.co.uk/type2show.asp?ref=484&ID=23

He basically wants all of the lower income households who have lost out to receive a cheque. Frank Field is totally correct to argue that the tax year has already begun - we cannot reverse course at this stage - pay cheques have already gone out according to the new standard.

I cannot recall the last time a budget was put in danger in living memory. The last time I am aware of was the 1910 budget crisis.

[Silent Hunter]

The Tories and the right-wing media (not saying you, afleitch) have been a bit dishonest on this- no change then. While the core voters may not read those papers, the floaters certainly do.

It looks rather bad. While the idea of simplification of the tax system is a good one, this could have been much better.

Darling has said he can't rewrite the Budget for this year- the financial year has already started, but he'll look at the issue in future Budgets.

Field's cheque proposal is a good one, but it's a question of finding the money.

A reversal of the 2p rate cut next year is going to be pounced on by the Tories- raising taxes in a downturn etc., but I think we could restore 15p or 10p via some tax alterations somewhere (maybe inheritance tax...)

[afleitch]

The Tories and the right-wing media (not saying you, afleitch) have been a bit dishonest on this- no change then. While the core voters may not read those papers, the floaters certainly do.

The dishonesty has radiated from Number 10; dishonesty to the voter and to their own backbench. However as the Lib Dems have noted, it took the Labour backbench a year to grumble about this (with a few honourable exemptions) However I am aware that Tory opposition to the measure is mostly to 'sock it' to the government. At the same time we have internally looked at measures desigjned to lighten the tax burden on the working poor including 'untaxing' the poor by allowing thos earning under 10-15k to pay no tax or NI contrcibutions whatsoever paid by curtailing WTC and probably putting a penny on the top rate of tax. I think we have to put together a package to voters on this.

[Silent Hunter]

What is the no-tax threshold anyway ATM?

Curtailing WTC- I'd have to see the figures, but I'm not sure if that's going to hurt families. I also don't know how many people work in the WTC area- suspect unions will kick up a fuss.

I favour something that needs a good acronym- altering WTC so its a direct tax reduction via PAYE- the NI number would take care of that.

Is this the magic 1p on the top rate of tax that will pay for everything from abolishing tuition fees to more police, like the Lib Dems proposed.

[Filuwaúrdjan]

What is Frank Field's proposal?

Some form of compensation, though I'm not sure of the details.

I do wish that those up top would realise the extent to which this stupid mess is demoralising Labour voters and angering party activists. Being more afraid of nasty headlines screaming "U-TURN!!!!11" (in newspapers that your voters either don't read or largely ignore the politics coverage of) than of irritating your own members is bizarre, but distressingly typical, behavior.

I talked about in the doortops last May and how changes to WTC wouldn't cover the effects abolition. Had some impact in some areas. However then Labour activists were accusing me of 'dishonesty.' I have little sympathy for those who struggle on the streets today because they sat on their arses for a year

I think you're missing my point here; I'm not for a minute suggesting that anyone deserves sympathy or even discussing why a fuss wasn't kicked up earlier (it's fairly obvious why anyway; an assumption was made that it was all a mistake and would be corrected either in the autumn or in the next budget. That this didn't happen is why the row is as bad as it is now, though).

[afleitch]

It's 'breaking news' but over on ConHome it appears the Tories may propose a £700 million rescue package for those affected by the aboltion of the 10p start rate. Along with proposals to introduce an element of free residential care for the elderly this is the sort of policy we need and I've been wanting for a long time.

[Peter]

Present (08/09) and previous (07/08) tax boundaries, assuming single person.

Present
£0 - £5,435  -  0%
£5,435 - £41,435  -  20%
£41,435 and above -  40%

Previous
£0 - £5,225  - 0%
£5,225 - £7,455  -  10%
£7,455 - £39,825  - 22%
£39,825 and above  - 40%

[Silent Hunter]

It's 'breaking news' but over on ConHome it appears the Tories may propose a £700 million rescue package for those affected by the aboltion of the 10p start rate. Along with proposals to introduce an element of free residential care for the elderly this is the sort of policy we need and I've been wanting for a long time.

Proposals for paying for this?

That said, not a bad idea, if they can find the money without service cuts.

Peter- £5,225 - £7,435? That's it? That's a rather small zone, isn't it?

[Filuwaúrdjan]

Proposals for paying for this?

If the answer to that is "cutting or scrapping tax credits" then insert bitter laughter here.

[Silent Hunter]

Proposals for paying for this?

If the answer to that is "cutting or scrapping tax credits" then insert bitter laughter here.

What is the Tory obsession with tax credits?

[Peter]

Peter- £5,225 - £7,435? That's it? That's a rather small zone, isn't it?

(Oops, typo. £7455, though I doubt that changes the thrust of your point)
Indeed. People behave as though the abolition of the 10% band is going to leave low income persons in dire straits, but actually if you earn £7455, then the amount of tax you paid was £223, and is now £404. The most anybody could have lost as a result of the change in tax band is £181 (though this effect doubles for 2 person families)

[afleitch]

I think you're missing my point here; I'm not for a minute suggesting that anyone deserves sympathy or even discussing why a fuss wasn't kicked up earlier (it's fairly obvious why anyway; an assumption was made that it was all a mistake and would be corrected either in the autumn or in the next budget. That this didn't happen is why the row is as bad as it is now, though).

That's been the problem with many in the parliamentary Labour party and party activists - 'assumptions' that the government will act in a certain way, or assumptions that any genuine disagreement on Labour policy was rooted in mistruth because Labour couldn't possibly raise tax on the poor but not middle earners, or cut down on drug rehabs programmes, the assumption that simply having the New Deal would mean there was negliable youth unemployment rather than tailoring it year after a year or a whole variety of issues like these (and - being a little cheeky here- the assumption that Brown would be any good) that I pressed on the doorstop.

Part of my reaction to this (and was the motivation behind me leaving the Labour party a few years ago) was that this is a Labour government proposing these things. In order to get a 'labour' government that would abolish council tax, prescription charges, graduate endowment tax and begin a programme of council house building here at least the electorate had to vote for the SNP. Elsewhere in order to elect a government that gets people working again and cuts the tax burden on the poor then, with my biased tin hat on, they are going to have to vote Tory.

[Filuwaúrdjan]

Proposals for paying for this?

If the answer to that is "cutting or scrapping tax credits" then insert bitter laughter here.

What is the Tory obsession with tax credits?

It's ideological (much as Labour support for them is) but of course no one can admit that sort of thing these days

[afleitch]

Proposals for paying for this?

If the answer to that is "cutting or scrapping tax credits" then insert bitter laughter here.

What is the Tory obsession with tax credits?

What is the Labour obesssion with tax credits as an acceptable 'compensation' for higher rates of tax? How can they justify tax credits going to a couple on 30k a year but not to a young single person on 12k? Again it's all based on the 'assumption' that tax credits will 'cover all' no mater what you do to the tax system.

EDIT: Ultimately it is ideological as it ties people to the state making them reliant on the government as opposed to simply 'un taxing' them in the first place.

[Bono]

The Tories and the right-wing media (not saying you, afleitch) have been a bit dishonest on this- no change then. While the core voters may not read those papers, the floaters certainly do.

The dishonesty has radiated from Number 10; dishonesty to the voter and to their own backbench. However as the Lib Dems have noted, it took the Labour backbench a year to grumble about this (with a few honourable exemptions) However I am aware that Tory opposition to the measure is mostly to 'sock it' to the government. At the same time we have internally looked at measures desigjned to lighten the tax burden on the working poor including 'untaxing' the poor by allowing thos earning under 10-15k to pay no tax or NI contrcibutions whatsoever paid by curtailing WTC and probably putting a penny on the top rate of tax. I think we have to put together a package to voters on this.

Did I read that well? Are the tories seriously suggesting raising the top tax rate? Well, that does it. Cameron is a complete sellout who will do or say anything to get elected. I don't know how the party could have allowed a social-democrat like this guy the leadership, but he has successfully destroyed everything that made the Conservative Party distinct from the others. All that's left is cosmetics.

[Peter]

Proposals for paying for this?

If the answer to that is "cutting or scrapping tax credits" then insert bitter laughter here.

What is the Tory obsession with tax credits?

You mean other than the fact that they are grossly inefficient as a means of delivery for redistribution of wealth caused by the inequities of the tax system?

If we want to redress the inequities of the tax system the best method would be to actually change the system as opposed to adding a bolt-on.

[afleitch]

The Tories and the right-wing media (not saying you, afleitch) have been a bit dishonest on this- no change then. While the core voters may not read those papers, the floaters certainly do.

The dishonesty has radiated from Number 10; dishonesty to the voter and to their own backbench. However as the Lib Dems have noted, it took the Labour backbench a year to grumble about this (with a few honourable exemptions) However I am aware that Tory opposition to the measure is mostly to 'sock it' to the government. At the same time we have internally looked at measures desigjned to lighten the tax burden on the working poor including 'untaxing' the poor by allowing thos earning under 10-15k to pay no tax or NI contrcibutions whatsoever paid by curtailing WTC and probably putting a penny on the top rate of tax. I think we have to put together a package to voters on this.

Did I read that well? Are the tories seriously suggesting raising the top tax rate? Well, that does it. Cameron is a complete sellout who will do or say anything to get elected. I don't know how the party could have allowed a social-democrat like this guy the leadership, but he has successfully destroyed everything that made the Conservative Party distinct from the others. All that's left is cosmetics.

Bono, shut up for a second.

It's a backbench proposal only.

No offence, but you can get worked up over things that are seen out of context

[Silent Hunter]

Proposals for paying for this?

If the answer to that is "cutting or scrapping tax credits" then insert bitter laughter here.

What is the Tory obsession with tax credits?

What is the Labour obesssion with tax credits as an acceptable 'compensation' for higher rates of tax? How can they justify tax credits going to a couple on 30k a year but not to a young single person on 12k? Again it's all based on the 'assumption' that tax credits will 'cover all' no mater what you do to the tax system.

EDIT: Ultimately it is ideological as it ties people to the state making them reliant on the government as opposed to simply 'un taxing' them in the first place.

I didn't say I liked the system 100% (that 30k a year couple thing), but a couple with kids is somewhat more deserving than a single person on 12k a year. Emphasis on the somewhat. Not saying they shouldn't be helped, but there is such a thing as priority.

[Filuwaúrdjan]

That's been the problem with many in the parliamentary Labour party and party activists - etc etc etc etc etc

The supporters of a political party with a decent chance of forming a government will always make assumptions about what the party-when-it-is-in-government will do, what it does and why it does them. And there isn't really anything wrong with that; it's perfectly normal behavior and Tories are as likely to do it as the rest of us.

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What on earth is 'labour' about abolishing council tax and the graduate endowment tax? Both measures are obviously populist (within a European sense of the word) but I don't see anything especially 'labour' about them.

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Because clearly my enemies have no legitimacy.

[Silent Hunter]

How many of the tax rebels are, so to speak, "the usual people"?

[afleitch]

Because clearly my enemies have no legitimacy.

That's not what I'm saying. I have no overall dislike of the Labour party or Labour tradition; my family and commuity is steeped in it and I cannot possibly sweepingly renounce the great things successive Labour governments have done. My biggest embarrasment last year is that running as a Tory would have upset my nana and my late papa and all the miners that came before. Her saying 'go fo it' was the best endorsment I could ever have gotten. I would have been a fool to think there were no other alternatives and to stay with a party that was no longer itself, or to believe that no other party could represent the same people.

Labour is in the same position the Conservatives were in the 90's - drunk with its own inevitability, drunk with office and with career aspirations even amongst the most robust of the backbench. If Labour has any decency left it will vote against the abolition of the 10p rate and yes, against it's own self interest for the interests of workers.

[Silent Hunter]

Labour is in the same position the Conservatives were in the 90's - drunk with its own inevitability, drunk with office and with career aspirations even amongst the most robust of the backbench. If Labour has any decency left it will vote against the abolition of the 10p rate and yes, against it's own self interest for the interests of workers.

You mean ensure that it loses the next election?

[afleitch]

Another Tory alternative expressed is more 'neutral' 9according to those who proposed it)

You offer people choice in taxation between two options.

1. A higher personal allowance of £9,000 per year and then paying tax at 33% on everything above that.

2. Claim a 'Citizen's Income" of current income support/Pensions credit levels depending on age (£57 or £114 a week) and pay 33% tax on ALL your income. Also double child benefit to £34 a week for all under 18s.

Ther theory being; 'if you earn less than £9,000 you are a net benefit claimant, if you earn more than £9,000 you are a net taxpayer. There is no particular jump in net income at £9,000 and nobody's total marginal withdrawal rate is more than 33% (whether you see this as losing benefits or paying income tax is neither here nor there).

Most taxpayers would be around 20 a week better off. It also makes for a simpler tax system. and of course the entire welfare state, tax credits and so on are replaced by the above, with the exception of disability benefits, SSP, housing benefit etc so that you don't loose benefits by taking on a job.

[Bono]

Another Tory alternative expressed is more 'neutral' 9according to those who proposed it)

You offer people choice in taxation between two options.

1. A higher personal allowance of £9,000 per year and then paying tax at 33% on everything above that.

2. Claim a 'Citizen's Income" of current income support/Pensions credit levels depending on age (£57 or £114 a week) and pay 33% tax on ALL your income. Also double child benefit to £34 a week for all under 18s.

Ther theory being; 'if you earn less than £9,000 you are a net benefit claimant, if you earn more than £9,000 you are a net taxpayer. There is no particular jump in net income at £9,000 and nobody's total marginal withdrawal rate is more than 33% (whether you see this as losing benefits or paying income tax is neither here nor there).

Most taxpayers would be around 20 a week better off. It also makes for a simpler tax system. and of course the entire welfare state, tax credits and so on are replaced by the above, with the exception of disability benefits, SSP, housing benefit etc so that you don't loose benefits by taking on a job.

Now we're talking. I hope whoever proposed this gets a cabinet position.

[The Man From G.O.P.]

Darling's statements "I can't re-write the budget" are hugely embarrassing.