Politics: What would you do with an extra £ 600?

Neither the Conservatives nor Labour would have increased the basic Income Tax threshold.  It is the Liberal Democrats, in Government, who are responsible for the biggest tax cut for the low paid that this country has seen.

Labour’s alternative is to reverse the Lib Dem tax cut, a cut of £ 600, and use the money to fund a VAT cut for the rich.  To make up the £ 600 lost when Labour cut the tax threshold you have to spend £ 24,000 on VATable goods in order to recover that cut in tax for the poorest in society before you even start to  make gains.

That means spending £ 24,000 after you have paid your rent (not vatable), paid for your fuel and petrol (not included as VAT is already only 5%), paid for your food, your books and newspapers, your children’s clothing.  Only a higher rate tax payer could possibly spend that much money.

Next year the basic Income Tax threshold increases to £ 700, which means that when Labour cut the tax threshold you have to spend £ 28,000 on VATable goods in order to recover that cut in tax for the poorest in society before you even start to  make gains.

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