Labour and Co-operative PPC (Norwich North),
John Cook's reply
"I am happy for you to treat my comments as being broadly supportive of your campaign and am supportive of its aims".
Do you agree in principle with the aforementioned policy?*
*no commitment to act upon the policy
Answer - "I support fairer and progressive tax, and am generally supportive of higher personal allowances, funded by higher taxes on high earners. I can see that your proposal would be one way of achieving this. I believe there could be some inequality issues around those earning close to £18,000 (slightly over or under), leaving someone earning £18001 worse off than someone earning £17999 for example".
In a generic sense, do you believe that the rich should pay more tax and the poor should pay less tax?
Answer – "Yes".
Do you pledge to campaign for income tax reform at the next parliament?**
**not necessarily as specified with the above policy
Answer - "Yes – In line to my answer to Question 1"
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As it currently stands, a person that earns £18,000 a year will get taxed £2,305 (excl NI contributions and incl tax free personal allowance). This will remain the same under FTC policy, we are not changing this. Compared to the current system, they will not pay anything extra. However, those that earn less than £18,000 will be far better off as a result of our changes, in terms of paying less tax. This will be part-subsidised by ensuring that the 50% additional rate is applicable for anyone that earns over £100,000 a year.
ReplyDeleteBut you are right to point out that a minor anomaly arises with a 3.92% tax gap being evident between £17,999 and £18,000. The difference is evident up to £18,880. For those that earn up to this amount will miss out on the tax break, but they are not being made to pay more tax. We argue that millions of people on lower incomes will benefit as a result of the changes that we propose. The £18,000 marker may appear arbitrary and slightly problematic, but if we did revise it up, to let's say £25,000 or even £30,000, it would mean that the threshold of the top rate of tax would have to come down as well to fill in the tax deficit. Or we would have to consider other options such as indirect taxation to complement our tax breaks for lower income earners. Even a uniform increase of the tax-free personal allowance could be a suitable alternative (as proposed by certain parties), but the fact is that you will have to find more billions from elsewhere to subsidise such a change.
Do note, we place a greater emphasis on promoting the debate of enhancing wealth redistribution and progressive taxation, than our specific policies.
We hope that has been clarified.
Fairer Tax Campaign Team
Possible solution to the £17,999 to £18880 gap:
ReplyDeleteOffering a tax rebate (part or whole) to anyone that falls into the aforementioned band.