Wednesday, 7 May 2008

Dave and the 10p rate

I fail to understand why the Tories are having such a hard time explaining what they would do with the 10p rate.

how about this?

Questioner - would you reinstate the 10p band.
DC - Right now we are not in government and so we cannot do anything. If Gordon Brown was to find his bottle and call an election right now, then we would look at ways of compensating those who have had a tax increase. Look firstly we would not have increased the tax burden on the lowest paid it is immoral.

The problem is not that the 10p rate was removed, but that the tax burden has been increased on the lowest paid. Gordon Brown has spent all the money he raised by removing the 10p band and so there is no money available to reinstate the 10p band and anyway removing the 10p band is a good way to simplify the tax regime as long as you compensate the tax losers and don't try to con the public that there are no tax losers.

So if we were elected now as a governing party we would immediately look at the last budget and introduce measures that would compensate those hit by this tax con budget, maybe by raising the level at which tax is started to be paid or introducing new rates or reliefs.

After our first budget we would ensure that all those who have lost out by the removal of the 10p band would be compensated.

The real question is when will Gordon Brown call an election, so we can get on with helping the lowest paid.

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