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Income Tax
From Pants On Fire
[edit] The 10p Rate
The Labour party manefesto of 1997 stated
- "Our long-term objective is a lower starting rate of income tax of ten pence in the pound."[1]
This was introduced in the budget in 1999.[2] However, in Gordon Brown's last budget before becoming Prime Minister he removed the 10p rate of Income Tax. [3]
This is a complete U-Turn and breaks what the 1997 party manefesto describes as a "long-term objective".
[edit] The £2.7 Billion Giveaway
During April 2008 many Labour backbenchers rebelled over the 10p tax rate. Led by Frank Fields this rebellion culminated in a one off £2.7billion pound tax relief for low earners and a reduction of the higher rate tax band so higher earners would not receive any net impact. This follows statements made by John Hutton in April that ruled out a re-think on the decision to scrap the 10p tax rate. [4]
[edit] Tax Inflation
The government takes over 41% more income tax now than it did 7 years ago.[5] The combined inflation rate using the CPI measure over those 7 years (Apr 2000 to Apr 2007)[6] is 20%. Effectively the government's income tax receipts are running at twice the level of inflation.
