On the same day that millions of working families have their tax credits cut, millionaires will receive a giveaway worth on average £100,000. George Osborn has tried to claim that there is no point taxing wealthy people because they will find ways to avoid paying. But that’s an argument for more enforcement not shifting the burden on to the rest of us. In any event, Ministers have publicly confirmed here that billions would indeed be raised by keeping the top rate of tax at 50p, even taking account of “possible behavioural responses”. It is therefore a question of choices not necessity: do you go after hard-working families, struggling to make ends meet or do you ask those with the broadest shoulders to bear the greatest burden?
And that’s not what is happening at the moment. As Alex Andreou has pointed out here, taking account of all the different forms of tax, the richest decile pay just under a third of their income in tax, compared to the average which is just over a third. Increasing taxes on the wealthiest in our society isn’t the politics of envy, it is just being fair.
Ed Miliband and Ed Balls have announced what they would do differently in next month’s budget:
- cancel the tax cut for millionaires and the raid on tax credits for working families;
- bring back a lower 10p starting rate of tax to give 25 million people on middle and low incomes a tax cut, paid for by a mansion tax on houses over £2 million;
- and take action to kick-start this flatling economy by bringing forward infrastructure investment, building thousands of affordable homes and boosting lending to small businesses.
Ed Balls says
This weekend we found out that the Government has even failed on its own test – keeping Britain’s AAA credit rating. But struggling families and businesses don’t need a credit rating agency to tell them this Government’s economic plan isn’t working.
The longer our economy stagnates, the more long-term damage will be done, the harder it will be to get the deficit down and the worse off people will be.
And with our economy flatlining it cannot be right to give millionaires a tax cut while making working families pay more.
To join Labour’s campaign against the tax cut for millionaires and for a One Nation tax policy, click here.