Labour propose abolishing the higher rate of income tax!

When Labour said they opposed a reduction in the top rate of income tax from 50% to 45% people naturally assumed that they wanted to retain the 50% rate, however as the saying goes one should never assume.

When it came to their actual budget amendment, Labour proposed to abolish the higher rate of income tax all together, leaving a top rate of 40% (as it had been until the dieing days of their failed adminsitration.

The Finance Bill clauses put forward by the Government were as follows:

‘Clause 1 – Income tax Charge for 2012-13 and rates for 2012-13 and subsequent tax years (1) Income tax is charged for the tax year 2012-13, and for that tax year.

  • (a) the basic rate is 20%,
  • (b) the higher rate is 40%, and
  • (c) the additional rate is 50%.

(2) For the tax year 2013-14.

  • (a) the basic rate is 20%,
  • (b) the higher rate is 40%, and
  • (c) the additional rate is 45%.’

The Labour amendment was to delete 2(c) which, if passed, would have left us with no additional rate.

It’s a no-brainer that Labour do not understand the basics of budgeting we need only look at the mess they left this country in to see that, but it is now becoming crystal clear that their entire fiscal policy is to tax the poor to feed the rich.

  • Labour abolished the 10% basic tax rate;
  • Labour opposed the increase in the tax threshold to £ 10,000;
  • Labour cut capital gains tax to 20%;and
  • Labour proposed further increasing fuel tax by 6%.

The simple truth is that Labour want to tax the poor to fund tax breaks for higher earners. In two years this government has closed tax loopholes for the rich worth billions of pounds that Labour had left open.

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