Less well-off local residents hit by Labour tax grab (Westminster and City of London Liberal Democrats)

Westminster and City of London Liberal Democrats <info@westminsterlibdems.org.uk>

Less well-off local residents hit by Labour tax grab

April 10, 2008 5:50 PM

Labour is pushing up income tax... but just on the lower paid

Local Liberal Democrats are attacking Government plans to bring in tax changes that will inevitably increase income tax bills for many of Westminster's residents.

On 6th April, Labour doubled the starting rate of income tax from 10p to 20p in the pound. Previously, a 10p rate was paid on the first £2,230 of taxable income. As a result, instead of taking £223 in income tax on this portion of people's wages, Gordon Brown is now taking £446.

Though the standard rate of income tax has been cut from 22p to 20p in the pound, a single person with no children would have to be earning over £18,500 to be better off under the tax changes.

Local Liberal Democrat spokesperson Stuart Bonar asked, "What sort of Labour Government is it that puts taxes up on those on the lowest incomes?

"Although much of Westminster is very affluent, many parts are also home to people on very low incomes. Many of them are are now receiving sharply increased tax bills at the same time as their household bills are rising."

"Gordon Brown announced his tax grab a year ago, but in the intervening 12 months Labour has done nothing to reduce the impact of the tax demands they knew were coming. It seems Labour has totally lost touch with the reality of the lives that ordinary people are living. Labour is no longer on the side of ordinary people."

Those worst hit by the tax changes include:

a single person with no children earning less than £18,500 will pay more in income tax
people taking early retirement with a taxable income of less than £8,000 will pay more in income tax

Liberal Democrat plans to cut the tax burden for those on low income include scrapping council tax and replacing it with a local tax based on ability to pay, and cutting the standard rate of national income tax by 4p in the pound, paid for by closing tax loopholes used by the wealthy and by increasing green taxes, such as the duties paid by the most polluting vehicles and those who travel in the most polluting aircraft.

LibDems would focus tax cuts on the lower paid, not make them foot the bill for tax cuts for the better off.